Company: JUNS
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001261
Chunk: 382

Company: JUPITER NEUROSCIENCES, INC.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 10
Chunk 382
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NOTES
TO FINANCIAL STATEMENTS

December
31, 2024 and 2023

Note
5 – Convertible Debt and Derivative Liability, continued

Summary

During
the years ended December 31, 2024 and 2023, $147,705 and $143,761, respectively, are included in interest expense for the combined convertible
Notes I, II and III on the accompanying statements of operations. As of December 31, 2024 and 2023 the balance of the combined
convertible promissory Note I, II and III was $0 and $1,745,472, respectively, net of the debt discount and loan origination costs of
$0 and $43,288, respectively.

Derivative
Liability Pursuant to Convertible Debt

In
connection with the issuance of the Notes, the Company determined that the terms of Notes contain an embedded conversion option to be
accounted for as a derivative liability due to the Holder having the potential to gain value upon IPO. Accordingly, under the provisions
of ASC 815-40 –Derivatives and Hedging – Contracts in an Entity’s Own Stock, the embedded conversion option
contained in Notes was accounted for as derivative liability and debt discount at the date of issuance and has been adjusted to fair
value through earnings at each reporting date. The fair value of the embedded conversion option was determined using the Monte Carlo
valuation model.

During
the years ended December 31, 2024 and 2023, the derivative liabilities were revalued, and a $857,723
and $(887,946),
respectively, adjustment was recorded as a gain/ (loss) on extinguishment of debt to other expenses reflected in the accompanying
statements of operations.

The
Company also recorded $(53,257) and $148,751 as a (loss) / gain on the change in the fair value of the derivative liability
for the years ended December 31, 2024 and 2023, respectively.

The
fair value of the derivative liability of Notes I, Note II and Note III was estimated using the Monte Carlo Valuation model at issuance
and each reporting period with the following assumptions:

Schedule
of Fair Value Derivative Liability

    NOTE III  
    NOTES I, II & III  
    NOTES I, II & III 

    March
                                            1, 2023 (Issuance)  
    December
                                            31, 202