v3.25.2
FAIR VALUE MEASUREMENTS (Tables)
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
SCHEDULE OF ASSETS AND LIABILITIES ARE MEASURED AT FAIR VALUE

The following tables summarize the Company’s assets and liabilities that are measured at fair value in the unaudited condensed consolidated financial statements:

 

   Level 1   Level 2   Level 3   Total 
   Fair Value Measurements as at December 31, 2024 
   Level 1   Level 2   Level 3   Total 
Other noncurrent assets:                    
Investment in equity securities (a)  $1,496,422   $-   $-   $1,496,422 
Total financial assets  $1,496,422   $-   $-   $1,496,422 

 

   Level 1   Level 2   Level 3   Total 
   Fair Value Measurements as at June 30, 2025 
   Level 1   Level 2   Level 3   Total 
Other noncurrent assets:                    
Investment in equity securities (a)  $594,799   $-   $-   $594,799 
Total financial assets  $594,799   $-   $-   $594,799 

 

   Level 1   Level 2   Level 3   Total 
   Fair Value Measurements as at December 31, 2024 
   Level 1   Level 2   Level 3   Total 
Liabilities                
Sponsor earnout shares (b)  $-   $-   $532,700   $532,700 
Total financial liabilities  $-   $-   $532,700   $532,700 

 

   Level 1   Level 2   Level 3   Total 
   Fair Value Measurements as at June 30, 2025 
   Level 1   Level 2   Level 3   Total 
Liabilities                    
Sponsor earnout shares (b)  $-   $-   $4,700   $4,700 
Total financial liabilities  $-   $-   $4,700   $4,700 

 

(a) These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, Investments-Equity Securities, based on quoted prices in active markets.

 

(b)

For Level 3 earnout liability, the Company assesses the fair value of expected earnout liability at each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected earnout consideration. This fair value measurement is considered a Level 3 measurement because the Company estimates projections during the earnout period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of earnout. Change in the fair value of earnout liability is reflected in our unaudited condensed consolidated statements of operations.

 

The make-whole obligation liability related to the Purchase Agreement is measured at fair value categorized within Level 1 of the fair value hierarchy. See Note 4.
SCHEDULE OF RECONCILIATION OF ACTIVITY AND CHANGES IN FAIR VALUE

The following table provides a reconciliation of activity and changes in fair value for the Company’s SAFE notes, convertible notes and sponsor earnout liability:

 

   SAFE notes at fair value    Convertible notes at fair value    Sponsor earnout liability at fair value 
Balance as at December 31, 2023  $5,212,200   $-   $- 
Issuance of notes   200,000    -    - 
Change in fair value   107,900    -    - 
Balance as at March 31, 2024  $5,520,100   $-   $- 
Issuance of notes   -    2,100,000    - 
Change in fair value   847,100    471,400    - 
Balance as at June 30, 2024  $6,367,200   $2,571,400   $- 
Issuance of common stock upon conversion   (6,367,200)   (2,571,400)   - 
Sponsor earnout liability recognized on closing of Business Combination   -    -    4,608,900 
Change in fair value   -    -    (1,636,100)
Balance as at September 30, 2024  $-   $-   $2,972,800 
Change in fair value   -    -    (2,440,100)
Balance as at December 31, 2024  $-   $-   $532,700 
Change in fair value   -    -    (528,000)
Balance as at March 31, 2025  $-   $-   $4,700 
Change in fair value   -    -    - 
Balance as at June 30, 2025  $-   $-   $4700