Company: MIRA
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010301
Chunk: 3

Company: MIRA PHARMACEUTICALS, INC.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 8
Chunk 3
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ited)

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 would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. The Company considers the carrying amount of deferred offering costs to approximate
fair value due to short-term nature of this instrument. GAAP describes three levels of inputs that may be used to measure fair value:

Level
1 - quoted prices in active markets for identical assets or liabilities.

Level
2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level
3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

Earnings
(loss) per Share

Earnings
(loss) per share is computed in accordance with ASC Topic 260, “Earnings per Share” Basic weighted-average
number of shares of common stock outstanding for the period ended March 31, 2025 and March 31, 2024 include the shares of the
Company issued and outstanding during such period, on a weighted average basis. The basic weighted average number of shares of
common stock outstanding excludes common stock equivalents such as stock options and warrants, while diluted weighted average number
of shares outstanding includes such stock options and warrants. During the three months ended March 31, 2025 and 2024, outstanding
aggregate stock options and warrants of 6,215,904
and 3,551,904
respectively, were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive
effect.

Recent
accounting pronouncements not yet adopted 

In
November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic
220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature
of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant