v3.26.1
Fair value Measurements
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements
3. FAIR VALUE MEASUREMENTS

 

The carrying amounts reflected in the consolidated balance sheets for prepaid expenses, accounts payable and accrued expenses and other liabilities are shown at their historical values which approximate their fair values.

 

The following tables presents the financial instruments carried at fair value on a recurring basis:

 

    As at December 31, 2025  
    Level 1     Level 2     Level 3     Total  
                         
Assets                        
Cash equivalents   $ 4,027,862     $ -     $ -     $ 4,027,862  
                                 
Liabilities                                
Derivative liability instrument   $ -     $ -     $ 3,028,401     $ 3,028,401  

 

    As at December 31, 2024  
    Level 1     Level 2     Level 3     Total  
                         
Assets                        
Cash equivalents   $ 498,286     $ -     $ -     $ 498,286  
                                 
Liabilities                                
Derivative liability instrument   $ -     $ -     $ -     $ -  

 

As of December 31, 2024, derivative liability instrument includes contingent warrant liability and the contingent put option liability as a single unit of account under the Share Purchase Agreement (Note 7). We measured derivative liability instrument to be immaterial as of December 31, 2024. The warrant liability and forward contract liability were contingent upon a public listing of our common stock on a stock exchange event, and is classified within Level 3 of the value hierarchy because the liability was based upon a valuation model that used inputs and assumptions including potential outcomes, interest rates, probabilities, and timing. We completed Direct Listing of our common stock on NASDAQ and bifurcated the liability instrument into its separate warrant liability and put contract liability components. The fair value of the Warrant liability to be issued upon completion of the public listing was $5.6 million, and this fair value decreased to $2.8 million at December 31, 2025. The fair value of the put contract liability was $0.2 million at December 31, 2025.

 

The following table summarizes the activity related to Level 3 financial liabilities for the year ended December 31, 2025:

 

    Derivative Liability Instrument  
Fair value at December 31, 2024   $ -  
Addition to derivative liability for warrants under Share Purchase Agreement     5,603,372  
Increase in fair value of put contract derivative under Share Purchase Agreement     202,871  
Decrease in fair value of warrant derivative liability     (2,777,842 )
Fair value at December 31, 2025   $ 3,028,401  

 

Upon public listing and as of December 31, 2025, the warrant liability value for the warrant issued to investor under the Share Purchase Agreement (Note 7) was determined using a Monte Carlo simulation. Inputs used in the Monte Carlo simulation are as below:

 

    As at
October 8,
2025		     As at
December 31,
2025		  
Risk-free interest rate     3.63 %     3.54 %
Dividend yield     -       -  
Term (years)     3.00       2.77  
Annual Volatility     87.1 %     94.4 %
Closing stock price   $ 7.00       3.94  

 

Put contract derivative liability as of public listing date was not material. As of December 31, 2025, the put contract derivative liability was remeasured using a Black-Scholes option valuation model, followed by a series of contractual adjustments. Inputs used in Black-Scholes model for valuation as of December 31, 2025 were as follows:

 

   

As at

December 31,
2025

  
Risk-free interest rate     3.61 %
Dividend yield     -  
Term (years)     2.77  
Annual Volatility     87.70 %
Closing stock price     3.94