Company: CPMV
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001683168-25-002584
Chunk: 334

Company: Mosaic ImmunoEngineering Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1C
Chunk 334
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 Stock using a cash basis of accounting rather than an accrual method
as we were unable to assert that collection of amounts due under the Redemption Agreement was probable, regardless of the terms of the
Redemption Agreement (see Note 4).

Financial Instruments and Concentrations of Credit
Risk

Financial instruments that potentially subject us
to concentrations of credit risk consist principally of cash and cash equivalents.

We invest our cash and cash equivalents primarily
in money market funds. Cash and cash equivalents are maintained with high quality financial institutions, which are regularly monitored
by management. At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit
Insurance Corporation and the Securities Investor Protection Corporation. We perform ongoing evaluations of these financial institutions
to limit our concentration of risk exposure.

Fair Value of Financial Instruments

Our financial instruments consist principally of cash
and cash equivalents, accounts payable, derivative liability, accrued compensation, accrued consulting, accrued expenses and other, loan
payable, and convertible notes. The carrying value of these financial instruments, except for the derivative liability and convertible
notes, approximates fair value because of the immediate or short-term maturity of the instruments. We record the derivative liability
at fair value (see Note 3). The convertible notes are initially recorded at their amortized cost and are accreted to their redemption
value over the estimated conversion period using the effective interest method (see Note 7).

Use of Estimates

The preparation of consolidated financial statements
in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during
the reporting period. Significant estimates in these consolidated financial statements include those related to the fair value of the
anti-dilution issuance rights liability (derivative liability), the timing of conversion of the convertible notes, the provision or benefit
for income taxes and the corresponding valuation allowance on deferred tax assets. In addition, management’s assessment of the Company’s
ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. On an ongoing
basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and
on various other assumptions believed to be reasonable. Due to the inherent uncertainty involved in making such accounting estimates and
assumptions, the actual financial statement results could differ materially from such accounting estimates and assumptions.