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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 14 – FAIR VALUE MEASUREMENTS

 

The Company applies ASC 820, Fair Value Measurement, which establishes a three-level hierarchy based on the observability of valuation inputs: Level 1 — quoted prices in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1 quoted prices; Level 3 — unobservable inputs.

 

Recurring Fair Value Measurements

 

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy:

  

Description  Level  June 30, 2026   December 31, 2025 
Marketable securities  1  $12,861   $9,706 
Embedded derivative liabilities – Yorkville Debentures  3  $-   $1,700 
Investment measured at NAV as a practical expedient  N/A  $

1,828

   $- 

 

Marketable securities are valued using unadjusted quoted prices in active markets (Level 1). Empress Royalty Corp. was valued using quoted prices on the TSX Venture Exchange, its principal market, translated to U.S. dollars at the spot exchange rate. Exchange-traded funds holding short-term U.S. Treasury and investment-grade corporate debt instruments were valued using quoted prices in active markets. See Note 8 — Marketable Securities. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the three or six months ended June 30, 2026.

 

Embedded Derivative Liability — Settled Convertible Debentures

 

The embedded conversion options in the Company’s secured convertible debentures were bifurcated as derivative liabilities under ASC 815 and measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The debentures and the related derivative were fully settled on February 6, 2026. See Note 22 — Convertible Debentures and Related Derivative Instruments.

   2/6/2026   12/31/2025 
Unobservable / key assumption  Remeasurement   Remeasurement 
Common stock price  $3.28   $3.03 
Indicated conversion price  $4.00   $4.00 
Floor price  $4.00   $4.00 
Prepayment probability   100%   70%
Prepayment premium   10%   10%
Registration probability   0%   0%

 

Fair value was most sensitive to the Company’s stock price, expected volatility, and prepayment timing/probability assumptions; increases in stock price or volatility would generally increase fair value, while a higher prepayment probability would generally decrease it. Given the path-dependent valuation, quantitative sensitivity analysis is not presented.

 

 

The following table presents the rollforward of the embedded derivative liability for the six months ended June 30, 2026:

 SCHEDULE OF FAIR VALUE MEASUREMENTS EMBEDDED DERIVATIVE LIABILITY 

   Amount 
Balance as of December 31, 2025  $1,700 
Change in fair value   (497)
Settlements   (1,203)
Balance as of June 30, 2026  $- 

 

The $497 gain is included in change in fair value of embedded derivative in the unaudited condensed consolidated statements of operations for the six months ended June 30, 2026. Upon settlement of the Convertible Debentures on February 6, 2026, the Company derecognized the $1,203 remaining embedded derivative liability, resulting in a $443 gain on derecognition that is included as a component of the $3,057 net realized loss on extinguishment of the Convertible Debentures disclosed in Note 22 — Convertible Debentures and Related Derivative Instruments (i.e., the $3,057 loss is presented net of this $443 gain). No Level 3 activity occurred during the three months ended June 30, 2026, as the Convertible Debentures and the related embedded derivative were fully settled during the three months ended March 31, 2026.