Fair Value Measurements
The Company accounts for certain assets and liabilities at fair value and classifies these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3).
Assets and liabilities subject to fair value measurements are as follows:
 As of December 31, 2025
 Level 1Level 2Level 3Total
Assets
Cash and cash equivalents – Money market$3,168,199 $— $— $3,168,199 
Liabilities
Warrant liabilities – Public Warrants$546,250 $— $— $546,250 
Warrant liabilities – Private Warrants (1)
— — 684,000 684,000 
Earnout liabilities (2)
— — 540,000 540,000 
Total liabilities$546,250 $ $1,224,000 $1,770,250 
 As of December 31, 2024
 Level 1Level 2Level 3Total
Assets
Cash and cash equivalents – Money market$22,602,438 $— $— $22,602,438 
Liabilities
Warrant liabilities – Public Warrants$4,600,000 $— $— $4,600,000 
Warrant liabilities – Private Warrants (1)
— — 5,586,000 5,586,000 
Earnout liabilities (2)
— — 620,000 620,000 
Total liabilities$4,600,000 $ $6,206,000 $10,806,000 
(1)Private Warrants were estimated using a Black-Scholes option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Class A Common Stock and current interest rates.
(2)The fair value of the earn-out liabilities was estimated using the Monte Carlo simulation utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Class A Common Stock and current interest rates.
The following tables summarize the balances of and changes in Level 3 Private Warrants and earn-out liabilities measured at fair value on a recurring basis for the years ended December 31, 2025 and 2024:
Private Placement WarrantsEarn-out Liabilities
Balance at January 1, 2024$5,415,000 $660,000 
Change in fair value during the period171,000 (40,000)
Balance at December 31, 20245,586,000 620,000 
Increase related to asset acquisition— 550,000 
Change in fair value during the period(4,902,000)(630,000)
Balance at December 31, 2025$684,000 $540,000 

Historical Timeline

Fiscal YearFiled
2025Mar 17, 2026Showing above
2024Mar 13, 2025
2023Mar 14, 2024

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.