v3.26.1
FAIR VALUE OF FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

As of June 30, 2026, the Company’s marketable securities consist of liquid funds and ETPs, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets. The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle. Financial instruments are classified as current if they are expected to be liquidated within the next twelve months. The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data. Level 3 investments are valued using the measurement alternative under ASC 321.

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2026, and December 31, 2025, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

 

(in thousands)

 

As of June 30, 2026

 

Particular  Adjusted
Cost
($)		   Gain
($)		   Loss
($)		   Fair Value
($)		   Cash &
Cash
Equivalents
($)		   Current
Investments
($)		 
Level 1                        
Cash   329    -    -    329    329    - 
Marketable Securities   50    -    27    23    -    23 
Level 2                              
Certificates of Deposit   2    -    -    2    2    - 
Level 3   -    -    -    -    -    - 
TOTAL   381    -    27    354    331    23 

 

As of December 31, 2025

 

Particular  Adjusted
Cost
($)		   Gain
($)		   Loss
($)		   Fair Value
($)		   Cash &
Cash
Equivalents
($)		  

Current
Investments
($) 

 
Level 1                        
Cash   893    -    -    893    893    - 
Marketable Securities   50    -    12    38    -    38 
Level 2                              
Certificates of Deposit   7    -    -    7    7    - 
Level 3   -    -    -    -    -    - 
TOTAL   950    -    12    938    900    38 

The following table presents the Company’s liabilities measured at fair value on a recurring basis as of June 30, 2026:

 

   (in thousands) 
Particular 

Level 1

($) 

   Level 2
($)		   Level 3
($)		   Total
($)		 
June 30, 2026                
Derivative Liability   -    -    72    72 
                     
December 31, 2025                    
Derivative Liability   -    -    -    - 

 

The derivative liability relates to the embedded conversion features of the VFG and FirstFire Notes. For more information, please refer to Note 11, “Loans and Other Liabilities”. The Company classifies the derivative liability within Level 3 as its valuation relies on significant unobservable inputs.

 

The fair value was estimated using a probability-weighted expected payoff model incorporating the following inputs: probability of default (10%), expected timing of default, the contractual conversion discount (75% of the lowest 10-day trading price), beneficial ownership cap (4.99%), exchange cap (19.99%), and a risk-adjusted discount rate of 12%. The following table presents a roll forward of the Level 3 derivative liability for the six months ended June 30, 2026 (in thousands):

 

   Amount
($)		 
Balance at December 31, 2025   — 
Initial recognition upon issuance of Notes during six months:     
VFG-1   27 
VFG-2   20 
FirstFire   36 
Change in fair value recognized in other income   (11)
Balance at June 30, 2026   72 

 

Changes in the fair value of the derivative liability, if any, are recognized in other income (expense) in the condensed consolidated statements of operations. As of June 30, 2026, derivative liabilities related to the VFG Notes and FirstFire Note were approximately $46 thousand and $26 thousand, respectively, totaling $72 thousand. Initial and subsequent recognition during the six months ended June 30, 2026, totaling $83 thousand, and a net decrease in fair value of $11 thousand was recognized as a gain in other (expense)/income , net.