The Company’s financial instruments include assets carried at fair value, as well as debt carried at face value, net of unamortized debt issuance costs, and are disclosed at fair value in this note. All fair values disclosed in this note are determined on a recurring basis other than the debt which is a non-recurring fair value measure. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company applies the market approach, which uses prices and other relevant data based on market transactions involving identical or comparable assets and liabilities. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices from sources independent of the reporting entity (“observable inputs”) and the lowest priority to prices determined by the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). The fair value hierarchy is as follows:

Level 1—Valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2—Valuations that are based on observable inputs (other than Level 1 prices) such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3—Unobservable inputs that are supported by little or no market activity. The unobservable inputs represent the Company’s best assumption of how market participants would price the assets or liabilities.

Net Asset Value (NAV)—The fair values of investment company limited partnership investments and mutual funds are based on the capital account balances reported by the investment funds subject to their management review and adjustment. These capital account balances reflect the fair value of the investment funds.

The following tables present the Company’s assets and liabilities measured at fair value, classified by the valuation hierarchy as of December 31, 2025 and 2024 (dollars in thousands):


	December 31, 2025
	Fair Value Measurements Using
	Total		Level 1		Level 2		Level 3
Assets:
Debt Securities:
U.S. Government	$	4,605	$	—	$	4,605	$	—
State and local government		17,216		—		17,216		—
Corporate debt		23,764		—		23,764		—
Asset-backed securities		20,973		—		20,973		—
Mortgage-backed securities		18,568		—		18,568		—
Commercial mortgage-backed securities		1,006		—		1,006		—
Collateralized mortgage obligations		2,173		—		2,173		—
Total debt securities		88,305		—		88,305		—
Equity Securities		313		93		220		—
Short-term investments		24,725		22,204		2,521		—
Total marketable investments measured at fair value	$	113,343	$	22,297	$	91,046	$	—

Investments measured at NAV:
Investment in limited partnership		964
Total investments measured at fair value	$	114,307

Contingent considerations from CIS sale		4,290		—		—		4,290
Total assets measured at fair value	$	118,597

Liabilities:
Funds-withheld obligation	$	21,284	$	—	$	21,284	$	—
Total Liabilities	$	21,284	$	—	$	21,284	$	—

Level 1 investments consist of equity securities traded in an active exchange market. The Company uses unadjusted quoted prices for identical instruments to measure fair value. Level 1 also includes money market funds and other interest-bearing deposits at banks, which are reported as short-term investments. The fair value measurements that were based on Level 1 inputs comprise 20% and 17% of the fair value of the total marketable investments measured at fair value as of December 31, 2025 and December 31, 2024, respectively.

Level 2 investments include debt securities and equity securities, which consist of U.S. government agency securities, state and local municipal bonds, corporate debt securities, mortgage-backed and asset-backed securities. The fair value of securities included in the Level 2 category were based on the market values obtained from a third party pricing service that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other observable market information. The third party pricing service monitors market indicators, as well as industry and economic events. The fair value measurements that were based on Level 2 inputs comprise 80% and 83% of the fair value of the total marketable investments measured at fair value as of December 31, 2025 and December 31, 2024, respectively.

The Company obtains pricing for each security from independent pricing services, investment managers or consultants to assist in determining fair value for its Level 2 investments. To validate that these quoted prices are reasonable estimates of fair value, the Company performs various quantitative and qualitative procedures, such as (i) evaluation of the underlying methodologies, (ii) analysis of recent sales activity, (iii) analytical review of our fair values against current market prices and (iv) comparison of the pricing services’ fair value to other pricing services’ fair value for the same investment. No markets for the investments were determined to be inactive at period-ends. Based on these procedures, the Company did not adjust the prices or quotes provided from independent pricing services, investment managers or consultants.

As of December 31, 2025, the Company had an asset for contingent consideration related to the CIS Sale. The fair value measurement of the contingent consideration asset was determined using Level 3 inputs. The Company determined the fair value of the third contingent payment to be $4.3 million, as of December 31, 2025. The fair value was calculated based on the average of 20,000 simulations of a Monte Carlo analysis performed using Geometric Brownian Motion. Key assumptions in the analysis included the following as of December 31, 2025:

As of December 31, 2024, the Company had an asset for contingent consideration related to the CIS Sale. The fair value measurement of the contingent consideration asset was determined using Level 3 inputs. At the time of the fair value analysis, the second and third $10.0 million contingent payments were not expected to be earned until the end of 2025 or later, if at all. The Company determined the combined fair value of the second and third contingent payments to be $8.1 million, as of December 31, 2024. The fair value was calculated based on the average of 20,000 simulations of a Monte Carlo analysis performed using Geometric Brownian Motion. Key assumptions in the analysis included the following as of December 31, 2024:

The Company's policy on recognizing transfers between hierarchies is applied at the end of each reporting period. The tables below shows a rollforward of Level 3 assets and liabilities held at fair value during the twelve months ended December 31, 2025 and December 31, 2024, respectively (dollars in thousands):


	Balance as of January 1, 2025		Additions into Level 3		Subtractions out of Level 3 *			Change in Fair Value		Balance as of December 31, 2025
Contingent considerations		8,070	$	—	$	(9,785	)	$	6,005	$	4,290
Total recurring Level 3 assets		8,070	$	—	$	(9,785	)	$	6,005	$	4,290

* The $9.8 million of subtractions out of the Level 3 contingent considerations were due to the Company receiving payment from the second contingent consideration in the second quarter of 2025.


	Balance as of January 1, 2024		Additions into Level 3		Subtractions out of Level 3 **			Change in Fair Value		Balance as of December 31, 2024
Contingent considerations		—	$	12,924	$	(4,894	)	$	40	$	8,070
Total recurring Level 3 assets		—	$	12,924	$	(4,894	)	$	40	$	8,070

** The $4.9 million of subtractions out of the Level 3 contingent considerations were due to the Company receiving payment from the first contingent consideration in the fourth quarter of 2024.

Fair Value of Financial Instruments Not Measured at Fair Value on the Condensed Consolidated Balance Sheets

The fair value of our long-term debt is based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The carrying value and estimated fair value of our long-term debt as of December 31, 2025 was approximately $12.2 million and $9.2 million, respectively. The carrying value and estimated fair value of our long-term debt as of December 31, 2024 were both approximately $11.9 million.

As of December 31, 2025, the fair value measurement of the mandatorily redeemable Series B Preferred Stock was determined using a trinomial lattice. This model was selected in consideration of the Company's optional redemption rights. The carrying value and estimated fair value of the mandatorily redeemable Series B Preferred Stock as of December 31, 2025 was approximately $6.4 million and $6.3 million, respectively.

As of December 31, 2025, determined that the carrying value and estimated fair value of the mandatorily redeemable Series C Preferred Stock were both $8.0 million as of December 31, 2025, since the issuance date was only nine days before the reporting date.