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.
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· |
Level 1: Quoted prices in active markets for identical assets or liabilities |
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Level 2: Observable inputs other than quoted prices included in Level 1 |
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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 June 30, 2026 |
| | |
Fair value on | |
Quoted prices in active markets | |
Significant other observable inputs | |
Significant unobservable inputs |
| | |
June 30, 2026 | |
(Level 1) | |
(Level 2) | |
(Level 3) |
| Assets | |
| |
| |
| |
|
| Money market funds | |
$ | 15,707,747 | | |
$ | 15,707,747 | | |
$ | – | | |
$ | – | |
| | |
| | | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | | |
| | |
| Warrant liability | |
$ | 45 | | |
$ | – | | |
$ | – | | |
$ | 45 | |
There were no transfers between Level 1, 2, and
3 during the six months ended June 30, 2026.
The following table presents changes in Level
3 liabilities measures at fair value for the six months ended June 30, 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 - June 30, 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 June 30, 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 June 30, 2026 was measured at fair value based on the Company’s closing market price of $2.88 per share as of that date, applied to the number of warrant shares outstanding. |
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|
| (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. |
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