Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements

v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Measurements [Abstract]  
FAIR VALUE MEASUREMENTS
B. FAIR VALUE MEASUREMENTS:

 

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2025 and December 31, 2024.

 

Fair Value on a Recurring Basis

 

The Company follows the guidance in ASC 820, Fair Value Measurement, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The estimated fair value of the Company’s investments and money market accounts represent Level 1 measurements. The estimated fair value of the earn-out liabilities represents Level 3 measurements. There were no transfers between levels within the fair value measurement hierarchy during the quarter ended June 30, 2025. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

Description   Level     June 30,
2025		     December 31,
2024		  
Assets:                  
Investments   1     $ 4,997     $ 8,856  
                       
Liabilities:                      
Earn-out liabilities   3     $ 560     $ 711  

 

Investments

 

The Company’s investments consisted of the following as of June 30, 2025:

 

    Cost     Unrealized Gain
(Loss)		     Fair Value  
Money market fund   $ 1,363     $
—
     $ 1,363  
Corporate bonds     2,562       7       2,569  
Mutual funds     267      
—
       267  
US Treasury bills     798      
—
       798  
    $ 4,990     $ 7     $ 4,997  

 

The Company’s investments consisted of the following as of December 31, 2024:

 

    Cost     Unrealized Gain
(Loss)		     Fair Value  
Money market fund   $ 4,843     $
—
     $ 4,843  
Corporate bonds     2,958       (6 )     2,952  
Mutual funds     267      
—
       267  
US Treasury bills     798       (4 )     794  
    $ 8,866     $ (10 )   $ 8,856  

 

Earn-Out Liabilities

 

In connection with certain of the Company’s asset acquisitions, certain earn-out liabilities were established which reflect the estimated amounts payable upon the achievement of sales from acquired intangible assets over a period of time following the acquisition. As of June 30, 2025, the Company has earn-out liabilities associated with its purchase of Trend Brand Solutions, T.R. Miller Co., and Premier NYC.

Assumptions used in determining the fair market value of the earn-out liabilities include the acquired asset’s projected gross profit, discount rates, remaining time intervals and residual earn-out percentages. The following table summarizes the key unobservable inputs into the models used to estimate the fair value of the earn-out liabilities at June 30, 2025:

 

Unobservable Inputs   June 30,
2025		  
Projected annual gross profit   $ 907 - $4,398  
Earnout percentage     40.0% - 45.0 %
Expected volatility     25.0 %
Risk-free rate     3.6% - 4.2 %
Discount rate     5.0% - 5.2 %
Required Metric Risk Premium     5.3% - 7.7 %
Time period to settlement     0.4 - 2.4 years  

 

A reconciliation of the earn-out liabilities is included below:

 

Balance as of December 31, 2024   $ 711  
Payments earned and paid     (151 )
Balance as of June 30, 2025   $ 560  
         
Current portion of contingent earn-out liabilities   $ 105  
Long-term contingent earn-out liabilities   $ 455