Claritev CorpCTEV
Claritev Corp Fair Value Disclosure
Fair Value Measurements
ASC 820, Fair Value Measurements states that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The following three-tier fair value hierarchy has been used in determining the inputs used in measuring fair value:
•Level 1 — Unadjusted quoted prices in active markets. These are generally obtained from real-time quotes for transactions in active exchange markets involving identical assets or liabilities on the reporting date.
•Level 2 — Quoted prices for similar assets and liabilities in active markets. These are typically quoted prices for identical or similar instruments in markets that are not active, and model-derived valuation in which all significant inputs are observable in active markets.
•Level 3 — Unobservable inputs in which there is little or no market data, that are significant to fair value of the assets or liabilities, which require the entity to develop its own assumptions.
Financial instruments
The carrying value of cash and cash equivalents, trade accounts receivables, net, prepaid expenses, prepaid taxes, unbilled Independent Dispute Resolutions fee, net, other current assets, net, accounts payable, accrued interest, accrued compensation, and other accrued expenses, approximate their fair value due to their relative short maturities.
The financial instrument that could potentially subject the Company to concentration of credit risk consists primarily trade accounts receivable.
Cash and cash equivalents as of December 31, 2025 and 2024 did not include money market funds.
The Company's carrying amount and fair value of long-term debt consisted of the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
| Term Loan B (includes current portion) | $ | — | $ | — | $ | 1,281,938 | $ | 986,938 | |||||||||||||||
5.50% Notes | 5,814 | 4,595 | 1,050,000 | 891,450 | |||||||||||||||||||
5.75% Notes | 5,310 | 3,318 | 979,827 | 645,706 | |||||||||||||||||||
| Senior Convertible PIK Note | 420 | 285 | 1,253,890 | 844,055 | |||||||||||||||||||
| First-Out First Lien Term Loan | 322,611 | 323,837 | — | — | |||||||||||||||||||
| Second-Out First Lien Term Loan | 1,135,357 | 1,070,755 | — | — | |||||||||||||||||||
| Second-Out First Lien A Notes | 627,998 | 666,180 | — | — | |||||||||||||||||||
| Second-Out First Lien B Notes | 763,075 | 673,795 | — | — | |||||||||||||||||||
| Third-Out First Lien A Notes | 765,520 | 661,180 | — | — | |||||||||||||||||||
| Third-Out First Lien B Notes | 986,126 | 811,187 | — | — | |||||||||||||||||||
| Finance lease obligations | 183 | 183 | 82 | 82 | |||||||||||||||||||
| Total Long-term debt | 4,612,414 | 4,215,315 | 4,565,737 | 3,368,231 | |||||||||||||||||||
| Less: debt discounts, net | (18,717) | (18,717) | (21,485) | (21,485) | |||||||||||||||||||
| Total Long-term debt, net of discount | $ | 4,593,697 | $ | 4,196,598 | $ | 4,544,252 | $ | 3,346,746 | |||||||||||||||
We estimate the fair value of long-term debt using level 2 inputs as they are not registered securities nor listed on any securities exchange but may be traded by qualified institutional buyers.
Recurring fair value measurements
The Company records interest rate swaps on the consolidated balance sheets at fair value, which represents the estimated amounts it would receive or pay upon termination of the derivative prior to the scheduled expiration date. The fair value is derived from model-driven information based on observable Level 2 inputs, such as SOFR forward rates.
The Company records cRSUs under Accrued Compensation on the consolidated balance sheets at fair value, which represents the estimated amount it would pay upon vesting of the cRSUs prior to the vesting date. The fair value is derived from the Black-Scholes model based on observable Level 2 inputs. The fair value of cRSUs granted was $19.9 million as of December 31, 2025, of which $8.3 million was recognized for the year ended December 31, 2025. See Note 12. Stock-Based Compensation for additional information.
Non-recurring fair value measurements
Our non-marketable equity securities using the measurement alternative are adjusted to fair value on a non-recurring basis. Adjustments are made when observable transactions for identical or similar investments of the same issuer occur, or due to impairment. These securities are classified as Level 2 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date.
During the year ended December 31, 2025, we sold these alternative investments which resulted in a loss of $2.7 million recorded to Loss on sale of equity investments in the consolidated statements of operations and comprehensive loss. The carrying amount of these alternative investments, recorded under Other assets, net on the consolidated balance sheets, was zero and $15.0 million as of December 31, 2025 and December 31, 2024, respectively.
We also measure certain non-financial assets at fair value on a nonrecurring basis, primarily goodwill and long-lived tangible and intangible assets, in connection with periodic evaluations for potential impairment. We estimate the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements. There were impairment charges for these assets of $1,488.9 million for the year ended December 31, 2024.
For additional information related to goodwill, intangible assets, long-lived assets and impairments, see Note 2. Summary of Significant Accounting Policies and Note 7. Goodwill and Other Intangible Assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Mar 16, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.