Company: MIRA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024077
Chunk: 2

Company: MIRA PHARMACEUTICALS, INC.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 8
Chunk 2
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 to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of expenses during the reporting period. Actual results may differ from such estimates
and such differences could be material. Significant estimates during the reporting periods include stock-based compensation and the deferred
tax asset valuation allowance.

Cash
and cash equivalents

The
Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased,
to be cash equivalents. The Company maintains cash and cash equivalent balances at two financial institutions that are insured by the
Federal Deposit Insurance Corporation (“FDIC”). The Company’s account at these institutions is insured by the FDIC
up to $250,000. On June 30, 2025, the Company had cash in excess of FDIC limits of approximately $0.5 million. Any material loss that
the Company may experience in the future could have an adverse effect on its ability to pay its operational expenses or make other payments
and may require the Company to move its cash to other high quality financial institutions. The Company deems these institutions to be
of high caliber and, to date, has not experienced any losses related to these holdings.

Stock-based
compensation

The
Company accounts for stock-based compensation under the provisions of FASB ASC 718, “Compensation - Stock Compensation”,
which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, directors and consultants
based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using
the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the
requisite service periods using the straight-line method. The Company has elected to account for forfeiture of stock-based awards as
they occur.

    6

MIRA
PHARMACEUTICALS, INC.

NOTES
TO CONDENSED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

Fair
value of financial instruments

The
Company measures the fair value of financial instruments in accordance with GAAP which defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements.

GAAP
defines fair value as the exchange price that