v3.25.4
FAIR VALUE ACCOUNTING
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE ACCOUNTING

17. FAIR VALUE ACCOUNTING

 

The fair value of one of the Company’s equity investments accounted for under the ASC 321 measurement alternative was determined using valuation techniques consistent with ASC 820, including future cash flow projections and other relevant assumptions. Fair value is defined as 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, includes:

 

●Level 1 – Observable inputs for identical assets or liabilities such as quoted prices in active markets;
   
●Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; and
   
●Level 3 – Unobservable inputs in which little or no market data exists, which are therefore developed by the Company using estimates and assumptions that reflect those that a market participant would use.

 

The following tables present the Company’s fair value hierarchy for its equity investment accounted for under the ASC 321 measurement alternative measured at fair value on a non-recurring basis:

 

   As of December 31, 2025 
   Level 1   Level 2   Level 3   Total 
Assets:                    
Equity investment (ASC 321 impairment)  $-   $-   $-   $- 

 

   As of December 31, 2024 
   Level 1   Level 2   Level 3   Total 
Assets:                    
Equity investment (ASC 321 impairment)  $-   $-   $-   $- 

 

The fair value of the Company’s equity investment (ASC 321 impairment) was determined using valuation techniques consistent with ASC 820, including consideration of future cash flow projections and other relevant assumptions. Due to the use of significant unobservable inputs, the fair value measurement was classified as a Level 3 measurement.

 

The change in fair value of the Company’s non-recurring Level 3 measurements is as follows:

 

  

December 31,

2025

  

December 31,

2024

  

December 31,

2023

 
   Year-to-date period ended 
  

December 31,

2025

  

December 31,

2024

  

December 31,

2023

 
Beginning Balance  $-   $       -   $       - 
Transfers into Level 3   5,088    -    - 
Impairment recognized during the period   (5,088)   -    - 
Transfers out of Level 3   -    -    - 
Ending Balance  $-   $-   $- 

 

The Company’s other financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, leases, contingent consideration assumed in the Action transaction, and loans and borrowings. The fair value of the Company’s other financial instruments approximates the carrying amounts represented in the accompanying Consolidated Balance Sheets, primarily due to their short-term nature. The fair value of the Company’s long-term borrowings also approximates the carrying amounts as these loans are carrying interest at the market rate.