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INVESTMENT IN OTHER ENTITY-RELATED PARTY | 12 Months Ended
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Dec. 31, 2025
Equity Method Investments and Joint Ventures [Abstract] |
INVESTMENT IN OTHER ENTITY-RELATED PARTY | NOTE 13. INVESTMENT IN OTHER ENTITY-RELATED PARTY The Company accounts for its investments in other entities under the equity method of accounting if the Company has the ability to exercise significant influence, but not control, over the entity. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. On December 31, 2025, the Company entered into a Stock Purchase and Satisfaction of Debt Agreement with its former parent HCMC. Pursuant to this agreement, the Company settled an intercompany receivable due from HCMC with a carrying value of approximately $4.0 million by accepting 43,889,786,222 shares of HCMC common stock in full satisfaction of the receivable. Initial Measurement Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Accordingly, the Company measured the investment at the carrying amount of the receivable surrendered. This treatment is consistent with the principle that when fair value cannot be determined within reasonable limits in a related party context, defaulting to the recorded amount of the asset relinquished is appropriate. The substance of this transaction is a conversion of intercompany funding to equity, not an income-generating event; therefore, no gain was recognized. Equity Method Assessment Although the Company’s ownership interest in HCMC is approximately 8.4%, which is below the 20% presumptive threshold for significant influence, ASC 323-10-15-6 requires consideration of qualitative indicators. A member of the Company’s senior management serves as Chairman of the Board of HCMC. Given that HCMC’s board consists of only three members, this represents disproportionate board representation relative to the Company’s ownership percentage and demonstrates that the Company has the ability to exercise significant influence over HCMC’s operating and financial policies. While the board representation is temporary in nature, as the Company and HCMC have committed to separate their boards and management teams in early 2026, under U.S. GAAP the equity method is applied regardless of whether the ability to exercise significant influence is intended to be temporary. Accordingly, the investment is accounted for using the equity method from the date of acquisition, December 31, 2025. The Company will apply the equity method prospectively beginning in the fiscal year ending December 31, 2026, recognizing its proportionate share of HCMC’s earnings or losses in future periods. For the year ended December 31, 2025, no equity method earnings or losses were recognized because the investment was acquired on the last day of the fiscal year. HCMC’s pre-acquisition losses are not attributable to the Company, as the ownership period did not commence until the acquisition date. Impairment Assessment The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To assess recoverability as of December 31, 2025, the Company obtained a third-party valuation of the HCMC shares received. The fair value of the shares was estimated using a multi-method approach in accordance with ASC 820. The valuation utilized unobservable inputs (Level 3), including a probability-weighted litigation asset model, and was cross-referenced against an observable arm’s-length transaction and the OTC Markets closing price at December 31, 2025. Based on this valuation, the estimated fair value of the investment exceeded its carrying amount. Accordingly, no impairment was recognized as of December 31, 2025. Related Party Considerations HCMC is a related party as the Company’s former parent prior to the Spin-Off completed on September 13, 2024, and due to the common board representation and management overlap described above. The terms of the settlement were negotiated and approved by the Company’s Board of Directors. Variable Interest Entities (Unconsolidated) The Company has evaluated its investment in its former parent HCMC under ASC 810 Consolidation and determined that HCMC meets the definition of a VIE. HCMC is considered a VIE due to its negative equity position, which indicates that the equity at risk is insufficient to permit the entity to finance its activities without additional subordinated financial support. The Company holds a variable interest in HCMC through its ownership of approximately 8% of HCMC’s outstanding common stock. The Company does not consolidate HCMC because it is not the primary beneficiary. The Company does not have the power to direct the activities that most significantly impact HCMC’s economic performance; this power resides with HCMC’s Board of Directors, whose independent members hold the majority vote. We will absorb portions of HCMC’s expected losses and/or gains commensurate with our 8% equity interest in HCMC. The Company’s maximum exposure to loss as a result of its involvement with this unconsolidated VIE is limited to its equity investment. As of December 31, 2025, the carrying value of this investment was $4.0 million, recorded under investments on the Company’s consolidated balance sheet. The Company does not have any future funding commitments, guarantees, or other arrangements that could require it to provide additional financial support to HCMC.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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