The Company’s functional currency is the Canadian dollar, and as discussed in note 13, the Convertible Notes’ conversion price is approximately $1.73 per common share.  Because the conversion option is priced in U.S. dollars, relative to the Company’s functional currency, US GAAP requires the embedded conversion option to be bifurcated and accounted for as a stand-alone derivative instrument (the “Conversion Option Derivative”). The Conversion Option Derivative is recorded at fair value on the Company’s consolidated balance sheets and mark-to-market changes in fair value are recorded in earnings.

The fair value of the Conversion Option Derivative liability was $48.6 million and $52.3 million as of the June 30, 2026, and December 31, 2025, respectively, which resulted in mark-to-market gains of $7.6 million and $3.7 million the three and six months ended June 30, 2026, respectively.

Fair value was determined using a binomial lattice model utilizing Level 3 inputs of the fair value hierarchy under US GAAP with the following assumptions:

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