Company: SIMA
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001213900-25-109984
Chunk: 57

Company: SIM Acquisition Corp. I
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 57
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 are accounted for under equity treatment.

8

Concentration of Credit Risk

Financial instruments that
potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times,
may exceed the Federal Deposit Insurance Corporation maximum of $250,000. Any loss incurred or a lack of access to such funds could have
a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Financial Instruments

The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurement,” approximates
the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature.

Fair Value Measurements

Fair value is defined as the
price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants
at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●Level 1,
defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●Level 2,
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●Level 3,
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.
In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.

Use of Estimates

The preparation of the condensed
financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of expenses and
deferred offering costs during the reporting period.

Making estimates requires
management to exercise significant judgment. It is at least reasonably possible that the estimate