Company: BCHT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001477932-25-005905
Chunk: 22

Company: Birchtech Corp.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.    ☐Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

 9Table of Content

 The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The profit share liability is the only item measured at fair value on a recurring basis by the Company at June 30, 2025 and December 31, 2024. The profit share liability is considered to be Level 3 measurements.  Financial instruments include cash, accounts receivable, accounts payable, and short-term debt. The carrying amounts of these financial instruments approximated fair value at June 30, 2025 and December 31, 2024 due to their short-term maturities.  At June 30, 2025, the fair value of the profit share liability is calculated using a discounted cash flow model based on estimated future cash payments. The fair value of the profit share liability at December 31, 2024 was also calculated using a discounted cash flow model based on estimated future cash payments. At June 30, 2025 and December 31, 2024, the fair value of the profit share liability was determined on a Level 3 measurement. These values are determined using pricing models for which the assumptions utilized management’s estimates. Significant unobservable inputs include a discount rate of approximately 14.55% and the projection of future cash flows. The following tables present the Company’s liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.        Fair Value Measurement as of       June 30, 2025   Total  Level 1  Level 2  Level 3 Liabilities:                         Profit share liability – related party (