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Fair Value of Financial Assets and Liabilities
 9 Months Ended
Sep. 30, 2025
Fair Value of Financial Assets and Liabilities [Abstract]  
Fair Value of Financial Assets and Liabilities

Note 7. Fair Value of Financial Assets and Liabilities

 

Financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

 

The Company uses three levels of inputs that may be used to measure fair value:

 

Level 1 - quoted prices in active markets for identical assets or liabilities

 

Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

 

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.

 

Warrants

 

Included in the September 30, 2025 warrants in level 2 financial assets that were acquired in connection with fees related to the Company’s underwriting services is approximately $1.2 million of warrants for purchasing shares in publicly traded that are subject to lock-up periods that will end in November 2025 and another $4.0 million of warrants for purchasing shares in publicly traded companies with lock-up periods that will end by March 1, 2026. The fair value of these warrants was measured considering the lock-up periods and applying a discount for lack of marketability (DLOM). The DLOM calculation incorporated observable inputs including each company’s historical volatility, applicable treasury rates, and the remaining duration of the lock-up period.

 

Notes Receivable at fair value

 

As of September 30, 2025, the fair value of the notes receivable was measured taking into consideration cost basis, market participant inputs, market conditions, liquidity, operating results and other qualitative and quantitative factors. 

 

The following table presents the Company’s assets and liabilities that are measured at fair value as of September 30, 2025, and December 31, 2024 ($ in thousands):

 

   Fair value measured as of September 30, 2025 
       Quoted   Significant     
   Total at
September 30,		   prices in
active
markets		   other
observable
inputs		   Significant
unobservable
inputs		 
   2025   (Level 1)   (Level 2)   (Level 3) 
Assets                
Marketable securities:                
Equities  $163,362   $163,362        $
-
 
Warrants   7,476    
-
   $7,476      
Total marketable securities  $170,838   $163,362   $7,476   $
-
 

 

   Fair value measured as of December 31, 2024 
       Quoted   Significant     
       prices in   other   Significant 
   Total at
December 31,		   active
markets		   observable
inputs		   unobservable
inputs		 
   2024   (Level 1)   (Level 2)   (Level 3) 
Assets                
Marketable securities:                    
Equities  $4,156   $4,156   $
-
   $
-
 
Warrants   1,617         1,617      
Total marketable securities  $5,773   $4,156   $1,617   $
-
 
Notes receivable at fair value, current portion  $
-
   $
-
   $
-
   $
-
 
Notes receivable at fair value, non-current portion  $902   $
-
   $
-
   $902 

Level 3 Measurement

 

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis ($ in thousands):

 

Notes receivable at fair value, non-current portion at December 31, 2024  $902 
Unrealized gain (loss) on notes receivable   221 
Change in interest receivable   20 
Collection of principal and interest outstanding   (1,143)
Notes receivable at fair value, non-current portion at September 30, 2025  $
--
 
      
Notes receivable at fair value, current portion at December 31, 2023  $3,177 
Collection of principal outstanding   750)
Realized and unrealized gain and loss on note receivable, net   (2,086)
Change in interest receivable   (56)
Notes receivable at fair value, current portion at September 30, 2024  $285 
      
Notes receivable at fair value, non-current portion at December 31, 2023  $1,129 
Unrealized loss on notes receivable   (1)
Notes receivable at fair value, non-current portion at September 30, 2024  $1,128