Company: PCAP
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001213900-25-074297
Chunk: 29

Company: ProCap Acquisition Corp
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 29
---
 to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

    Level 1:
    Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

    Level 2:
    Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

    Level 3:
    Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about
the Company’s assets, liabilities, and equity, that are measured at fair value as of June 30, 2025, and indicates the fair value
hierarchy of the valuation inputs the Company utilized to determine such fair value:

    Level 
    June 30,  2025
  
    Assets: 

    Cash held in Trust Account 
    1 
    $251,114,608 
  
    Liabilities: 

    Over-allotment option liability 
    3 
    $7,023 
  
    Equity: 

    Fair value of Public Warrants for ordinary shares subject to possible redemption allocation 
    3 
    $1,816,667 

The over-allotment option was accounted for as
a liability in accordance with ASC 815-40 and was presented within liabilities on the balance sheet. The over-allotment option liability
is measured at fair value at inception and on a recurring basis, with changes in fair value presented within changes in fair value of
over-allotment option liability in the statement of operations.

15

PROCAP ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025

(Unaudited) 

The Company used a Black-Scholes model to value
the over-allotment option. The over-allotment option liability was classified within Level 3 of the fair value hierarchy at the measurement
dates due to the use of unobservable inputs inherent in pricing models are assumptions related to expected share-price volatility, expected
life and risk-free