Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements

v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
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 March 31, 2026 and December 31, 2025.

 

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 three months ended March 31, 2026. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

Description   Level   March 31,
2026		     December 31,
2025		  
Assets:                
Investments   1   $ 5,115     $ 4,872  
                     
Liabilities:                    
Earn-out liabilities   3   $ 560     $ 560  

 

Investments

 

The Company’s investments consisted of the following as of March 31, 2026:

 

    Cost     Unrealized
Gain (Loss)		     Fair
Value		  
Money market fund   $ 1,803     $
      —
     $ 1,803  
Corporate bonds     1,768       22       1,790  
Mutual funds     1,521       1       1,522  
    $ 5,092     $ 23     $ 5,115  

The Company’s investments consisted of the following as of December 31, 2025:

 

    Cost     Unrealized
Gain (Loss)		     Fair
Value		  
Money market fund   $ 1,788     $
      —
     $ 1,788  
Corporate bonds     1,768       25       1,793  
Mutual funds     1,291      
—
       1,291  
    $ 4,847     $ 25     $ 4,872  

 

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 March 31, 2026, 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 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 March 31, 2026:

 

Unobservable Inputs   March 31,
2026		  
Projected annual gross profit   $ 392 - $4,398  
Earnout percentage     40.0% - 45.0 %
Expected volatility     25.0 %
Risk-free rate     3.6% - 4.3 %
Discount rate     5.0% - 5.2 %
Required Metric Risk Premium     5.3% - 7.7 %
Time period to settlement     0.6 - 1.6 years  

 

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

 

Balance as of December 31, 2025   $ 560  
Payments earned and paid    
—
  
Balance as of March 31, 2026   $ 560  
         
Current portion of contingent earn-out liabilities   $ 105  
Long-term contingent earn-out liabilities   $ 455