Company: MDCXW
Filing Date: 2025-09-19
Form Type: DRS
Source: 0001062993-25-015719
Chunk: 96

Company: Medicus Pharma Ltd.
Filing Date: 2025-09-19
Form: DRS
Chunk 96
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 prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones. For the latter, the Company accrues the expenses as goods or services are used or rendered. Clinical trial site costs related to patient enrollment are accrued as patients enter and progress through the trial. Upfront costs, such as costs associated with setting up clinical trial sites for participation in the trials, are expensed immediately once incurred as research and development expenses.

Fair Value Measurements

Our recurring fair value measurements which primarily include cash and cash equivalents and Debentures, for which we elected the fair value option.

The fair value option was elected to account for the Debentures. We used the discounted cash flow approach to determine the fair value and it was determined that there was no difference between the transaction price and the fair value and therefore there was no gain or loss was recorded at the issuance date. We will subsequently remeasure the Debentures at fair value at each reporting period with the gain or loss recognized in the statements of operations and comprehensive loss.

We measure the fair value of financial assets and liabilities based on 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. We maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

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CONFIDENTIAL TREATMENT REQUESTED BY MEDICUS PHARMA LTD.PURSUANT TO 17 C.F.R. SECTION 200.83</div>

Stock-based compensation

The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value of the awards. The Company records the expense for stock-based compensation awards subject to vesting over the requisite service period using an estimate of the number of options that will eventually vest. The Company estimates the fair value of stock option grants and shares purchasable under the Company's equity incentive plan using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the