v3.26.1
FAIR VALUE OF FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

As of March 31, 2026, the Company’s marketable securities consist of liquid funds and ETPs, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets. The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle. Financial instruments are classified as current if they are expected to be liquidated within the next twelve months. The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data. Level 3 investments are valued using the measurement alternative under ASC 321.

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2026, and December 31, 2025, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

 

(in thousands)

As of March 31, 2026

 

Particular  Adjusted
Cost
($)		   Gain
($)		   Loss
($)		   Fair Value
($)		   Cash &
Cash
Equivalents
($)		   Current
Investments
($)		 
Level 1                        
Cash   200    -    -    200    200    - 
Marketable Debt Funds   -    -    -    -    -    - 
Marketable Securities   50    -    22    28    -    28 
Level 2                              
Certificates of Deposit   7    -    -    7    7    - 
Level 3   -    -    -    -    -    - 
TOTAL   257    -    22    235    207    28 

 

As of December 31, 2025

 

Particular  Adjusted
Cost
($)		   Gain
($)		   Loss
($)		   Fair Value
($)		   Cash &
Cash
Equivalents
($)		  

Current

Investments
($)

 
Level 1                        
Cash   893    -    -    893    893    - 
Marketable Debt Funds   -    -    -    -    -    - 
Marketable Securities   50    -    12    38    -    38 
Level 2                              
Certificates of Deposit   7    -    -    7    7    - 
Level 3   -    -    -    -    -    - 
TOTAL   950    -    12    938    900    38 

The following table presents the Company’s liabilities measured at fair value on a recurring basis as of March 31, 2026:

 

   (in thousands) 
Particular 

Level 1

($)

   Level 2
($)		   Level 3
($)		   Total
($)		 
March 31, 2026                
Derivative Liability      -       -    27    27 
                     
December 31, 2025                    
Derivative Liability   -    -    -    - 

 

The derivative liability relates to the embedded conversion feature of the VFG Note. For more information, please refer to Note 11, “Loans and Other Liabilities”. The Company classifies the derivative liability within Level 3 as its valuation relies on significant unobservable inputs.

 

The fair value was estimated using a probability-weighted expected payoff model incorporating the following inputs: probability of default (10%), expected timing of default, the contractual conversion discount (75% of the lowest 10-day trading price), beneficial ownership cap (4.99%), exchange cap (19.99%), and a risk-adjusted discount rate of 12%. The following table presents a roll forward of the Level 3 derivative liability for the three months ended March 31, 2026 (in thousands):

 

   Amount ($) 
Balance at December 31, 2025   — 
Initial recognition upon issuance of the VFG note   27 
Change in fair value recognized in other expense   — 
Balance at March 31, 2026   27 

 

Changes in the fair value of the derivative liability, if any, are recognized in other income (expense) in the condensed consolidated statements of operations. During the three months ended March 31, 2026, no gain or loss was recognized as the instrument was issued near quarter-end and there was no material change in fair value between inception and the reporting date.