Company: AGGI
Filing Date: 2025-10-31
Form Type: 10-12G
Source: 0001683168-25-007875
Chunk: 40

Company: Allied Energy, Inc.
Filing Date: 2025-10-31
Form: 10-12G
Chunk 40
---

through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3
- Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement
date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation
of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets
or liabilities.

As defined
by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received
to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants
at the measurement date.

Our financial
instruments consist primarily of cash and cash equivalents, accounts receivable, other receivables, related-party balances, accounts
payable, accrued expenses, and related-party payables. The carrying amounts of these instruments approximate fair value because of their
short maturities.

As of December
31, 2024 and 2023, our cash equivalents consisted of money market funds, which are classified within Level 1 of the fair value hierarchy.
The fair value of these money market funds approximated amortized cost, and we did not record any unrealized gains or losses.

We reassess
the classification of our instruments within the fair value hierarchy on a recurring basis, considering changes in market conditions
and the availability of observable inputs.

Stock-based Compensation

The Company
accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. The Company records stock-based
compensation expense for all stock-based awards granted to employees, directors, and non-employees based on the fair value of the award
at the grant date.

The fair
value of stock options is estimated on the grant date using a binomial option-pricing model. The binomial model requires the use of various
assumptions, including the expected term of the awards, expected volatility of the Company’s common stock, risk-free interest rate,
and expected dividend yield. The expected term is determined based on the contractual term and vesting conditions of the award. Expected
volatility is based on historical volatility of comparable publicly traded companies and, where available, the Company’s own stock.
The risk-free rate is based on