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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Mar. 31, 2026
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: •Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. •Level 2 inputs: Other than quoted prices in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. •Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Recurring Fair Value Measurements—The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are presented in the tables below. The Company evaluates its estimates and judgments on an ongoing basis. The Company bases its estimates on historical experience and or other relevant assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ materially from management’s estimates.
| Fair Value Hierarchy
As of March 31, 2026 | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Life settlement policies, at fair value | $ | — |  |  | $ | — |  |  | $ | 392,770,863 |  |  | $ | 392,770,863 |
Total assets held at fair value | $ | — |  |  | $ | — |  |  | $ | 392,770,863 |  |  | $ | 392,770,863 |
Liabilities: |  |  |  |  |  |  |
Long-term debt, at fair value | $ | — |  |  | $ | — |  |  | $ | 38,156,705 |  |  | $ | 38,156,705 |
Total liabilities held at fair value: | $ | — |  |  | $ | — |  |  | $ | 38,156,705 |  |  | $ | 38,156,705 |
| Fair Value Hierarchy
As of December 31, 2025 | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Life settlement policies, at fair value | $ | — |  |  | $ | — |  |  | $ | 468,857,929 |  |  | $ | 468,857,929 |
Total assets held at fair value | $ | — |  |  | $ | — |  |  | $ | 468,857,929 |  |  | $ | 468,857,929 |
Liabilities: |  |  |  |  |  |  |
Current portion of long-term debt, at fair value | $ | — |  |  | $ | — |  |  | $ | 114,424,000 |  |  | $ | 114,424,000 |
Total liabilities held at fair value: | $ | — |  |  | $ | — |  |  | $ | 114,424,000 |  |  | $ | 114,424,000 |
Life Settlement Policies— The Company accounts for owned life settlement policies using the fair value method or investment method (cost, plus premiums paid). The valuation method is chosen upon contract acquisition and is irrevocable. The Company purchases policies from individuals or institutions, bundles those policies into tranches and sells to institutions, insurance carriers or funds that are attracting new investors. These initial purchases happen in the secondary market and the tertiary market. The secondary market is different from the principal or most advantageous market for purchasing policies and has less competition due to state-by-state licensing requirements. The Company leverages its broad policy base and extensive network, to offer individual policies that provide enhanced standalone value. This is achieved by precisely matching each policy’s risk profile to the specific needs of fund managers, institutions, insurance carriers, or funds as well as bundling secondary market originated policies with those originated in the tertiary market. This tailored approach attracts new investors by making it easier to identify and acquire policies that align with their investment objectives. This approach enhances realized gains because it increases market liquidity, broadens the investor base, and enables more efficient price discovery, which in turn supports higher policy values. Our historical realized gains on policies sold and matured, are materially consistent regardless of where policies are originated. For policies carried at fair value, the valuation is based on Level 3 inputs that reflect our assumptions about what factors market participants would use in pricing the asset. Fair value is determined using a discounted cash flow (“DCF”) with Monte Carlo simulation to determine the fair value of each policy. The Company’s model uses a discount rate based on observed transaction pricing which is assessed against historical realized gains. The valuation process uses significant assumptions, including survival probabilities and mortality assumptions informed by third-party life expectancy reports and a base mortality table (SOA 2015 VBT) adjusted via a mortality rating to match the risk-adjusted life expectancy, and market-calibrated discount rates. The Monte Carlo simulation is applied to each policy to generate one million mortality scenario simulations which provides a comprehensive distribution of potential outcomes and calculates expected cash flows. In certain circumstances, if there is a verbal commitment to purchase a specific policy as of the balance sheet date, we use that transaction price as the fair value as we believe it is a more precise estimate of exit price than that determined using historical data. Further information about the inputs to the valuation are listed below: •Risk-Based Discount Rate: Each policy's discount rate is determined based on its proprietary risk score (1-5 scale), with discount rates directly calibrated to observed transaction prices for policies in the same risk score category. Specifically, for each risk score category, the Company calculates the annualized internal rate of return ("IRR") implied by the relationship between modeled future cash flows (based on life expectancies) and the actual sales price observed in a dataset comprising over 1,000 executed policy transactions. These implied IRRs are aggregated on a weighted-average basis by risk score category to establish the discount rates applied in the Company's DCF/Monte Carlo valuation model. The dataset is updated periodically and adjusted for current market conditions based on observed institutional demand and contemporaneous trade activity. This transaction-based approach ensures that discount rates reflect actual transaction pricing rather than theoretical market rates. •Risk Score: Each policy is assigned a proprietary risk score from 1 to 5, with 5 being higher risk, based on multiple factors including insured age, life expectancy, life expectancy extension ratio, survival probability at breakeven, maturity probability, and risk-adjusted return on capital metrics. •Life expectancy: Survival curves are generated using the Society of Actuaries 2015 VBT mortality tables adjusted by mortality ratings to achieve risk-adjusted life expectancies. For policies with multiple insureds, joint survival probabilities are calculated using statistical modeling techniques. Related party considerations: To assess if related party sales are transacted at market terms, each policy is assessed against independent market checks, including indications from unaffiliated third parties, comparisons to third-party executed sales for policies with comparable characteristics (e.g.; Risk Score and Life Expectancy), and verifying that the terms and customary approval processes are consistent with those offered to non-related parties. The Company performs quarterly lookback analysis to validate current valuations against actual market transactions. The quarterly lookback reviews policies sold and matured during the current quarter and compares sale prices to fair value measures as of the prior quarter. Discount rates are derived from observed transaction pricing and modeled cash flows, historical realized gains are used, if at all, as a reasonableness check rather than an adjustment factor. Risk Metrics and Portfolio Analysis Expected Tail Loss (“ETL99”): The Company calculates Expected Tail Loss at the 99th percentile, representing the weighted average of net present values in the worst 1% of simulated scenarios. This metric is used in conjunction with average net present value (“NPV”) to derive Risk-Adjusted Return on Capital (“RAROC”) ratios for individual policies and portfolio-level risk assessment. Portfolio Diversification: When evaluating policies as part of a portfolio, the Company performs correlated analysis across all holdings, recognizing that combining policies with varying risk profiles can mitigate tail risk exposure while maintaining expected returns. Data Sources: Valuations are fundamentally based on historical realized gains analysis from over one thousand policy transactions, representing actual transaction-based IRRs by risk category. Current market conditions are incorporated through ongoing discussions with investors such as institutional asset managers, credit unions, regional banks, and reinsurers, and proprietary risk modeling developed from the Company's transaction history. The following table provides quantitative information about significant unobservable inputs for Level 3 fair value measurements as of March 31, 2026:
Fair Value |  | Valuation Technique |  | Significant Unobservable Inputs |  | Weighted Average |  | Range
Life insurance polices: |  |  |  |  |  |
$ | 392,770,863 |  |  | Discounted cash flow with Monte Carlo simulation |  | Discount rate |  | 10 | % |  | 10% —11%
|  |  |  | Life expectancy (months) |  | 39 months |  | 1 month —265 months
|  |  |  | Risk score |  | 2.25 |  | 1 —5
Secured borrowing, at fair value: |  |  |  |  |  |
$ | 38,156,705 |  |  | Discounted cash flow |  | Discount rate |  | 8.4 | % |  | 8.0% — 8.5%
The following table provides quantitative information about significant unobservable inputs for Level 3 fair value measurements as of December 31, 2025:
Fair Value |  | Valuation Technique |  | Significant Unobservable Inputs |  | Weighted Average |  | Range
Life insurance polices: |  |  |  |  |  |
$ | 468,857,929 |  |  | Discounted cash flow with Monte Carlo simulation |  | Discount rate |  | 13 | % |  | 13% —15%
|  |  |  | Life expectancy (months) |  | 45 months |  | 1 month —267 months
|  |  |  | Risk score |  | 2.16 |  | 1 —5
The reduction in the weighted average discount rate from 13% as December 31, 2025 to 10% as of March 31, 2026 reflects observed market trade spreads. For life settlement policies carried using the investment method, the Company measures these at the cost of the policy plus premiums paid. The policies accounted for using the investment method totaled $931,353 at March 31, 2026 and $918,305 at December 31, 2025, respectively. Discount Rate Sensitivity—10% was determined to be the weighted average discount rate used to estimate the fair value of policies held by the Company and its investment funds. If the discount rate increased or decreased by one percentage point and the other assumptions used to estimate fair value remained the same, the change in estimated fair value as of March 31, 2026, would be as follows:
| Fair Value |  | Change in Fair Value |  | Implied Realized Gain
+1% | $ | 385,694,793 |  |  | (7,076,070) |  |  | 22 | %
No change | 392,770,863 |  |  |  |  | 24 | %
-1% | $ | 409,128,486 |  |  | 16,357,623 |  |  | 29 | %
Historical Realized Gains Sensitivity—While the weighted average discount rate can fluctuate based on the overall mix of policies included in the company's portfolio at any given time, the discount rates are determined using historical realized gains by risk category, which have a more consistent weighted average. As a result, we have supplementally added an additional sensitivity analysis for realized gains. The fair value of life settlement policies is sensitive to changes in key unobservable inputs used to estimate the fair value of policies held by the Company and its investment funds. The historical realized gains represents the total actual sales price of policies less their total cost basis divided by their total cost basis. The sensitivity analysis is intended to illustrate the potential increase or decrease if policies sold for an average of 1% above or below their determined sale price. The fair market value of the Company’s policies would increase when historical realized gains on life insurance policies sold increases. If the historical realized gains increased or decreased by one percentage point and the other assumptions used to estimate fair value remained the same, the change in estimated fair value as of March 31, 2026, would be as follows:
| Fair Value |  | Change in Fair Value
+1% | $ | 395,142,114 |  |  | $ | 2,371,251 |
No change | 392,770,863 |  |  | — |
-1% | $ | 388,819,840 |  |  | $ | (3,951,023) |
Credit Exposure to Insurance Companies—The following table provides information about the life insurance issuer concentrations that exceed 10% of total face value or 10% of total fair value of the Company’s life insurance policies as of March 31, 2026:
Carrier | Percentage of Face Value |  | Percentage of Fair Value |  | Carrier Rating 1
Transamerica | 14.8% |  | 16.1% |  | A
Lincoln National Life Insurance Company | 12.1% |  | 13.5% |  | A
1 Carrier ratings are based on AM Best ratings. The following table provides a rollforward of the fair value of life insurance policies for the three months ended March 31, 2026 and March 31, 2025:
| Three Months Ended March 31,
| 2026 |  | 2025
Balance, beginning of period | $ | 468,857,929 |  |  | $ | 370,398,447 |
Policies purchased 1 | 156,739,049 |  |  | 105,633,081 |
Matured/sold policies 2 | (197,620,829) |  |  | (56,836,082) |
Unrealized gain on held policies and reversal of prior quarter unrealized gain on policies sold and matured | (35,205,286) |  |  | 27,012,517 |
Balance, end of period | $ | 392,770,863 |  |  | $ | 446,207,963 |
1 Policies purchased represents life insurance policies purchased during the period. 2 Matured/sold policies represents life insurance policies held at the beginning of the period and those purchased during the period that also matured or were sold within the period. The following table provides a reconciliation of revenue from life insurance policies held using the fair value method for the three months ended March 31, 2026 and March 31, 2025:
| Three Months Ended March 31,
Gains or losses recognized in life solutions revenue in the consolidated statements of operations and comprehensive income: | 2026 |  | 2025
Realized gain on matured/sold policies | $ | 92,894,712 |  |  | $ | 15,130,764 |
Premiums paid | (9,676,748) |  |  | (8,308,074) |
Unrealized gain on held policies and reversal of prior quarter unrealized gain on policies sold and matured | (35,205,286) |  |  | 27,012,517 |
Revenue from life insurance policies held using the fair value method | $ | 48,012,678 |  |  | $ | 33,835,207 |
Long-Term Debt—See Note 14, Long-Term Debt for additional information on the secured borrowing. The Company has elected the fair value option in accounting for the long-term debt. Fair value is determined using Level 3 inputs. Available-for-Sale Investment—The convertible promissory notes are classified as an available-for-sale securities. Available-for-sale investments are subsequently measured at fair value. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income until realized. The Company determines fair value of its available-for-sale investments using unobservable inputs by considering the initial investment value, next round financing, and the likelihood of conversion or settlement based on the contractual terms in the agreement. As of March 31, 2026 and December 31, 2025, the Company evaluated the fair value of its Convertible Promissory Notes and determined that the fair value approximates the carrying value of $3,147,609 and $3,108,750, respectively. Refer to Note 9, Other Investments and Other Assets for additional information. Non-Recurring Fair Value Measurements Other Investments— These investments are recorded at cost under the ASC 321 measurement alternative and are adjusted for impairment and observable price changes. Impairment is assessed qualitatively. As of March 31, 2026, and December 31, 2025, the Company determined that the carrying value of $20,653,585 and $18,253,585, respectively. Refer to Note 9, Other Investments and Other Assets for additional information. Financial Instruments Where Carrying Value Approximates Fair Value—The carrying value of cash and cash equivalents, accounts receivables, accounts receivable, related party, income tax receivables, accrued expenses, and other current liabilities approximates fair value due to the short-term nature of their maturities.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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