RICHTECH ROBOTICS INC. Fair Value Disclosure
Note 9: Fair Value of Financial Instruments
ASC 820, Fair Value Measurements (“ASC 820”) states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value. Our assets and liabilities that were measured at fair value on a recurring basis were as follows:
| September 30, 2025 | September 30, 2024 | |||||||||||||||||||||||||||||||
| Fair Value | Level I | Level II | Level III | Fair Value | Level I | Level II | Level III | |||||||||||||||||||||||||
| U.S. government securities | $ | 17,000 | $ | $ | 17,000 | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Certificates of deposit | 41,308 | 41,308 | 15,940 | 15,940 | ||||||||||||||||||||||||||||
| Money market funds | 5,518 | 5,518 | ||||||||||||||||||||||||||||||
| Total | $ | 63,826 | $ | 5,518 | $ | 58,308 | $ | $ | 15,940 | $ | $ | 15,940 | $ | |||||||||||||||||||
Our U.S. government securities and certificates of deposit are classified within Level II of the fair value hierarchy and the market approach was used to determine fair value of these investments.
Our cash, cash equivalents and investments classified by security type as of September 30, 2025 and 2024 consisted of the following:
| September 30, 2025 | ||||||||||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | |||||||||||||||||||
| Cash | $ | 188,111 | $ | $ | $ | 188,111 | $ | 188,111 | $ | |||||||||||||||
| U.S. government securities | 16,607 | 393 | 17,000 | 17,000 | ||||||||||||||||||||
| Certificates of deposit and time deposits | 41,308 | 41,308 | 41,308 | |||||||||||||||||||||
| Money market funds | 5,518 | 5,518 | 5,518 | |||||||||||||||||||||
| Total cash, cash equivalents and short-term investments | $ | 251,544 | $ | 393 | $ | $ | 251,937 | $ | 193,629 | $ | 58,308 | |||||||||||||
| September 30, 2024 | ||||||||||||||||||||||||
| Adjusted Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Cash and Cash Equivalents | Short-Term Investments | |||||||||||||||||||
| Cash | $ | 14,566 | $ | $ | $ | 14,566 | $ | 14,566 | $ | |||||||||||||||
| Certificates of deposit and time deposits | 15,940 | 15,940 | 15,940 | |||||||||||||||||||||
| Total cash, cash equivalents and short-term investments | $ | 30,506 | $ | $ | $ | 30,506 | $ | 14,566 | $ | 15,940 | ||||||||||||||
As of September 30, 2025, all of our short-term investments had contractual maturity dates within one year.
Disclosure of Fair Values
Our financial instruments that are not re-measured at fair value include accounts receivable, notes receivable, other receivables, accounts payable, accrued expenses, short-term loan and long-term payables. The carrying values of these financial instruments materially approximate their fair values.
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.