NOTE 9 – DERIVATIVE LIABILITY WARRANTS

At June 30, 2026, there were (i) 375,000 warrants (the “former Public Warrants”) outstanding that were issued as part of Bull Horn Holdings Corp.’s November 2020 initial public offering, exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at an exercise price of $230.00 per share, and (ii) 187,500 private placement warrants (the “Private Placement Warrants,” and together with the former Public Warrants, the “Warrants”) outstanding that were issued to the sponsor and underwriters in that initial public offering, exercisable in the aggregate to acquire 187,500 shares of the Company’s common stock at an exercise price of $230.00 per share. The number of Warrants and the related exercise price were adjusted for the Company’s 20-1 reverse stock split effective December 31, 2024. The Warrants were assumed in connection with the Merger and are accounted for as a continuation of the accounting acquiree’s instruments from the Closing Date. The Warrants expire on October 31, 2027.

Within ASC 815, Derivatives and Hedging, Section 815-40 addresses equity versus liability classification of equity-linked financial instruments and provides that such an instrument may be classified as a component of equity only if, among other criteria, it is indexed to the issuer’s own stock and the settlement amount does not vary based on the characteristics of the holder. The Private Placement Warrants are non-redeemable and are exercisable on a cashless basis for so long as they are held by the Sponsor, the Underwriters, or their permitted transferees; however, if a Private Placement Warrant is transferred to a holder other than the Sponsor, the Underwriters, or their permitted transferees, it becomes redeemable by the Company and exercisable only on the same basis as the former Public Warrants. Because the redemption and exercise terms of the instrument therefore differ depending on the identity of the holder, notwithstanding that the Warrants themselves are freely transferable, the Company concluded that the Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC 815-40, and are accordingly precluded from equity classification and required to be classified as liabilities in accordance with ASC 815-40.

The Warrants were assumed by the Company on the Closing Date and were measured at their acquisition-date fair value. As a result of the exercise price of the Warrants substantially exceeding the price of the Company’s common stock, the Warrants were valued at $- as of the Closing Date. During the period, the former Public Warrants ceased to meet the requirements for continued listing and are no longer publicly traded. As a result, a quoted market price for the former Public Warrants is no longer available, and their fair value was determined using a Black-Scholes valuation model. The former Public Warrants are valued using a Black-Scholes model that incorporates the $330.00 issuer call provision, and the Private Placement Warrants are valued using a Black-Scholes model that excludes the call provision, as the Private Placement Warrants are not subject to the call provision while held by their initial holders. Because the fair value of the former Public Warrants is determined using unobservable inputs, they were transferred from Level 1 to Level 3 of the fair value hierarchy during the period. The Private Placement Warrants were classified within Level 3 in all periods presented.

The following table provides quantitative information regarding the significant unobservable inputs used in the fair value measurement of the Warrants as of June 30, 2026:

The following table presents the changes in the fair value of the Warrants for the period from the Closing Date through June 30, 2026:

As a result of the exercise price of the Warrants substantially exceeding the price of the Company’s common stock at both the Closing Date and June 30, 2026, the Warrants were fair valued at $- at each date. Accordingly, the Company recognized no gain or loss in respect of the change in fair value of the Warrants for the three and six months ended June 30, 2026.