NOTE 3: FAIR VALUE MEASUREMENTS
The Company measures certain financial assets and
liabilities at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement. ASC 820 establishes a three-level
hierarchy for fair value measurements based on the transparency of inputs used in valuation techniques. The hierarchy prioritizes observable
inputs and minimized the use of unobservable inputs.
| · | Level 1: Quoted prices in active markets for
identical assets or liabilities |
| · | Level 2: Observable inputs other than quoted
prices included in Level 1 |
| · | Level 3: Significant unobservable inputs |
The following table presents the Company’s
fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:
| Schedule of recurring basis to determine the fair value of the liability | |
| | | |
| | | |
| | | |
| | |
| | |
Fair value measured as of March 31,
2026 | |
| | |
Fair value on | | |
Quoted prices in active markets | | |
Significant other observable inputs | | |
Significant unobservable inputs | |
| | |
March 31, 2026 | | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
| Assets | |
| | |
| | |
| | |
| |
| Money market funds | |
$ | 18,750,408 | | |
$ | 18,750,408 | | |
$ | – | | |
$ | – | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Warrant liability | |
$ | 45 | | |
$ | – | | |
$ | – | | |
$ | 45 | |
There were no transfers between Level 1, 2, and 3
during the three months ended March 31, 2026.
The following table presents changes in Level 3 liabilities
measures at fair value for the three months ended March 31, 2026. Both observable and unobservable inputs were used to determine the
fair value positions that the Company has classified within the Level 3 category.
| Schedule of liabilities measures at fair value | |
| |
| | |
Warrant Liability | |
| Balance - January 1, 2026 | |
$ | 63 | |
| Change in fair value | |
| (18 | ) |
| Balance - March 31, 2026 | |
$ | 45 | |
The fair value of the warrants to purchase shares
of common stock was estimated using the following assumptions:
| Schedule of assumptions | |
| | |
| | |
| |
| | |
As of
Issuance
Warrant Liability | | |
As of
March 31, 2026
Warrant Liability (1) | | |
As of
December 31, 2025
Warrant Liability (2) | |
| Strike Price | |
$ | 10.02 | | |
$ | – | | |
$ | – | |
| Contractual term (years) | |
| 5.0 | | |
| – | | |
| – | |
| Volatility (annual) | |
| 80.0% | | |
| – | | |
| – | |
| Risk-free rate | |
| 3.5% | | |
| – | | |
| – | |
| Floor Financing price | |
$ | 8.00 | | |
$ | – | | |
$ | – | |
| (1) |
The warrant liability as of March
31, 2026 was measured at fair value based on the Company’s closing market price of $3.27 per share as of that date, applied
to the number of warrant shares outstanding. |
| |
|
| (2) |
The warrant liability as of December 31, 2025
was measured at fair value based on the Company’s closing market price of $4.60 per share as of that date, applied to the number
of warrant shares outstanding. |
|