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Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Measurements

Fair Value Measurements

8.Fair Value Measurements

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The following table presents fair value hierarchy of the Company’s financial assets measured at fair value on a recurring basis:

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​	​	​	​	​	​	​	​	​	​	​	​
​	Fair Value Hierarchy
​	Level 1		​	Level 2		​	Level 3		​	Total
As of September 30, 2024	​	​	​	​	​	​	​	​	​	​	​
U.S. Government money market fund accounts	$	3,596	​	$	—	​	$	—	​	$	3,596
(Included in cash and cash equivalents)	​	​	​	​	​	​	​	​	​	​	​
Bitcoin investments	​	64,482	​	​	—	​	​	—	​	​	64,482
(Included in intangible digital assets)	​	​	​	​	​	​	​	​	​	​	​
Investment in debt securities	​	—	​	​	—	​	​	5,000	​	​	5,000
(Included in short-term notes held for investment)	​	​	​	​	​	​	​	​	​	​	​
Total Assets	$	68,078	​	$	—	​	$	5,000	​	$	73,078

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​	​	​	​	​	​	​	​	​	​	​	​
​	Level 1		​	Level 2		​	Level 3		​	Total
As of December 31, 2023	​	​	​	​	​	​	​	​	​	​	​
U.S. Government money market fund accounts	$	41,373	​	$	—	​	$	—	​	$	41,373
(Included in cash and cash equivalents)	​	​	​	​	​	​	​	​	​	​	​
U.S. Treasury bill	​	—	​	​	10,494	​	​	—	​	​	10,494
(Included in cash and cash equivalents)	​	​	​	​	​	​	​	​	​	​	​
Investment in debt securities	​	—	​	​	—	​	​	4,372	​	​	4,372
(Included in notes held for investment)	​	​	​	​	​	​	​	​	​	​	​
Total Assets	$	41,373	​	$	10,494	​	$	4,372	​	$	56,239

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Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under FASB ASC 820, Fair Value Measurement, are described as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices included in Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and

Level 3 — Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own models.

The financial instruments of the Company consist primarily of cash, U.S. government money market fund accounts, trade receivables, trade payables, bitcoins, U.S. treasury bill investments and debt securities. Because carrying values of cash, trade receivables, and payables are equal to or approximate their fair value, the Company excluded them from the leveling requirements. U.S. government money market fund accounts are classified as Level 1 due to their short-term nature, their market interest rates and also based on the fact that they are publicly traded. Bitcoins purchased for investments, which are included in Intangible digital assets are classified as Level 1 as the unadjusted quoted prices in active markets are used for the fair valuation. The Company also invested in non-convertible promissory notes and equity securities in a privately held company, which were recorded on cost basis. See Notes 7 and 9 to the Unaudited Condensed Financial Statements for more information.

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The Company's privately held debt security is recorded at fair value on a recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework.

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As of September 30, 2024, the Company valued the debt security at face value of $5,000 as the issuer of the debt security notified their intention to repay the debt before the maturity date of December 6, 2024. The fair value of the Company’s privately held debt security was estimated at $4,372 as of December 31, 2023.

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- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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