Fair Value

6 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value

Note 18: Fair Value

The Company complies with the provisions of ASC 820, Fair Value Measurements, for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.

As of December 31, 2024, and June 2024, the Company has classified the Private Placement Warrants and the Representative Warrants as Level 3 fair value measurements. Management evaluates a variety of inputs and then estimates fair value based on those inputs. As discussed below, the Company utilized the Black Scholes Model in valuing the Private Placement Warrants and Representative Warrants.

The estimated fair value of cash, trade receivables, accounts payable, accrued expenses and other current liabilities are based on Level 1 inputs as the fair values approximate carrying amounts as of December 31, 2024, and June 30, 2024, based on the short-term nature and maturity of these instruments.

The estimated fair values of subordinated shareholder debt and the credit facility are based on Level 2 inputs, which consist of interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities. As of December 31, 2024, and June 30, 2024, the estimated fair value of the Company’s short and long-term debt approximates its carrying value due to market interest rates charged on such debt or their short-term maturities.

The Company recomputes the fair value of the Private and the Representative Warrants at the issuance date and the end of each quarterly reporting period. Such value computation includes subjective input assumptions that are consistently applied each period. If the Company were to alter its assumptions or the numbers input based on such assumptions, the resulting fair value could be materially different.

The Company utilized the following assumptions to estimate the fair value of the Private Warrants and Representative Warrants as of December 31, 2024 and June 30, 2024.

	December 31, 2024			June 30,  2024
Stock Price	$	9.06		$	3.00
Exercise price per share	$	11.5		$	11.50
Risk-free interest rate		4.23	%		4.41	%
Expected term (years)		3.0			3.6
Expected volatility		17.1	%		36.0	%
Expected dividend yield		-			—

The significant assumptions using the Lattice model approach for valuation of the Warrants were determined in the following manner:

(i)	Risk-free interest rate: the risk-free interest rate is based on the U.S. Treasury rate with a term matching the time to expiration.
(ii)	Expected term: the expected term is estimated to be equivalent to the remaining contractual term.
(iii)	Expected volatility: expected stock volatility is based on daily observations of the Company’s historical stock value and implied by the market price of the public warrants, adjusted by guideline public company volatility.
(iv)	Expected dividend yield: expected dividend yield is based on the Company’s anticipated dividend payments. As the Company has never issued dividends, the expected dividend yield is 0% and this assumption will be continued in future calculations unless the Company changes its dividend policy.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy as (in thousands):

	As of December 31, 2024
	Total		Level 1		Level 2		Level 3
Private Placement and Representative Warrants	$	2,379	$	-	$	-	$	2,379
	As of June 30, 2024
	Total		Level 1		Level 2		Level 3
Private Placement and Representative Warrants	$	247	$	—	$	—	$	247

The table below presents the change in number and fair value of the Private and Representative Warrants since June 30, 2024: (in thousands, except the number of shares)

	Private Warrants					Representative Warrants					Total
	Shares			Value		Shares			Value		Shares			Value
June 30, 2024		4,120,000		$	244		50,090		$	3		4,170,090		$	247
Exercised		-			-		-			-		-			-
Classification change from Private to Public		(762,333	)				(6,750	)				(769,083	)		-
Change in value		-		$	2,100		-		$	32		-		$	2132
December 31, 2024		3,357,667		$	2,344		43,340		$	35		3,401,007		$	2,379