Company: JUNS
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010990
Chunk: 9

Company: JUPITER NEUROSCIENCES, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 9
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 and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes
payable, net of discount, and loans payable also approximate fair value because current interest rates available for debt with similar
terms and maturities are substantially the same.

The Company follows accounting guidance for financial
assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.
This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require
or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses
valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash
flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).

The guidance utilizes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value into six broad levels. The following is a brief description
of those three levels:

Level 1: Observable inputs such as quoted prices
(unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs, other than quoted prices that
are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted
prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or
no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant
would use.

See Note 5 - Convertible Debt and Derivative
Liability.

    12

JUPITER NEUROSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

Note 2 – Significant Accounting Policies,
continued

Derivative Instruments

Derivative instruments are recognized on the
balance sheet and measured at fair value. Gains or losses resulting from changes in the fair value of derivatives are recognized in
earnings.

Convertible Notes with Embedded Derivative
Liabilities

The Company previously entered into convertible
notes payable, some of which contained variable conversion options, whereby the outstanding principle and accrued interest could be converted,
by the holder, into shares of common stock at a fixed discount to the price of the common stock at or around the time of conversion upon
certain trigger events. The Company evaluated all its