Financial Instruments

3 Months Ended

Mar. 31, 2025

Investments, All Other Investments [Abstract]

Financial Instruments

Note 16. Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy ranks the inputs used in measuring fair value as follows:

○	Level 1 – Observable, unadjusted quoted prices in active markets
○	Level 2 – Inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability
○	Level 3 – Unobservable inputs with little or no market activity that require the Company to use reasonable inputs and assumptions

The Company uses fair value measurements to record adjustments to certain financial assets and liabilities on a recurring basis. The Company may be required to record certain assets at fair value on a nonrecurring basis in specific circumstances, such as evidence of impairment. Methodologies used to determine fair value might be highly subjective and judgmental in nature; therefore, valuations may not be precise. If the Company determines that a valuation technique change is necessary, the change is assumed to have occurred at the end of the respective reporting period.

Assets and Liabilities Reported at Fair Value on a Recurring Basis

Public Warrants:

Public warrants are recorded at fair value on a recurring basis. The Company obtains exchange traded price, of Level 1 inputs, based on observable data to value these warrants.

Private Placement Warrants:

Private Placement Warrants are recorded at fair value on a recurring basis based upon an internal Company assessed value of these derivatives with Level 3 inputs, which are derived from the Black-Scholes model.

PIPE Warrants:

PIPE Warrants are recorded at fair value on a recurring basis based upon an internal Company assessed value of these derivatives with Level 3 inputs, which are derived from the Black-Scholes model.

Abaca Warrants:

Abaca Warrants are recorded at fair value on a recurring basis. The Company assessed the value of these derivatives with Level 3 inputs. Level 3 inputs, based on unobservable data derived from the Black-Scholes model.

Third Anniversary Payment Consideration:

Third anniversary payment consideration are recorded at fair value on a recurring basis. The Company values these derivatives based on third party reports for Level 3 inputs. Level 3 inputs are based on unobservable data period. The Company values these derivatives based on third party reports for Level 3 inputs. Level 3 inputs are based on unobservable data derived from the Monte Carlo Simulation model.

Forward Purchase Option Derivatives:

Forward purchase option derivatives are recorded at fair value on a recurring basis. In 2022, the Company values these derivatives based on third party reports for Level 3 inputs. Since 2022, no significant risk factors such as volatility, expected term, reset price, or any other changes have been observed to impact the values of forward purchase option derivatives. As a result, the Company has maintained the same value for the three months ended March 31, 2025.

The following tables summarize financial assets and liabilities recorded at fair value on a recurring basis, by the level of valuation inputs in the fair value hierarchy on March 31, 2025 and December 31, 2024:

	March 31, 2025						December 31, 2024
	Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Unobservable Inputs (Level 3)		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Unobservable Inputs (Level 3)
Description
Liabilities:
PIPE warrants	$	7,594		-		7,594	$	79,512		-		79,512
Public warrants	$	7,044		7,044		-	$	246,445		246,445		-
Private placement warrants	$	522		-		522	$	9,632		-		9,632
Abaca warrant	$	229,248		-		229,248	$	1,024,900		-		1,024,900
Forward purchase derivative liability	$	7,309,580		-		7,309,580	$	7,309,580		-		7,309,580
Third anniversary payment consideration	$	161,000		-		161,000	$	322,000		-		322,000

Assets Measured at Fair Value on a Nonrecurring Basis

Assets that are measured at fair value on a nonrecurring basis primarily comprises of property, plant and equipment, right-to-use asset, finite lived intangible assets and goodwill. The Company does not record these at fair value on a recurring basis, however, the carrying value of the assets may be reduced to fair value when the Company determines that impairment has occurred.

There were no assets or liabilities recorded at fair value on a nonrecurring basis for the three months ended March 31, 2025 and March 31, 2024.

Fair Value of Financial Instruments

The Company uses various methodologies and assumptions to estimate the fair value of certain financial instruments. With the exceptions of loans receivable, warrants and forward purchase option derivatives, the Company considers the carrying amounts of its financial instruments (cash and cash equivalents, accounts receivable and accounts payable) in the balance sheet to approximate fair value because of the short-term or highly liquid nature of these financial instruments.

The following tables present the carrying amounts and fair values of financial instruments, by the level of valuation inputs in the fair value hierarchy, as of the dates indicated:

	As on March 31, 2025
	Carrying amount		Fair value		Fair value measurement using
					Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	931,397	$	931,397	$	931,397	$	-	$	-
Loans		357,310		359,505		-		-		359,505
Liabilities
Deferred consideration		3,016,343		3,016,343		3,016,343		-		-
Senior Secured Promissory note		10,748,408		10,221,652		-		-		10,221,652
Public warrants		7,045		7,045		7,045		-		-
Private placement warrants		522		522		-		-		522
PIPE Warrants		7,594		7,594		-		-		7,594
Abaca Warrants		229,248		229,248		-		-		229,248
Third anniversary payment consideration		161,000		161,000		-		-		161,000
Forward purchase derivative		7,309,580		7,09,580		-		-		7,309,580

	As on December 31, 2024
	Carrying amount		Fair value		Fair value measurement using
					Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	2,324,647	$	2,324,647	$	2,324,647	$	-	$	-
Forward purchase receivables		4,584,221		4,584,221		-		4,584,221		-
Loans		360,552		359,505		-		-		359,505
Liabilities
Deferred consideration		3,016,343		3,016,343		3,016,343		-		-
Senior Secured Promissory note		11,004,173		10,221,652		-		-		10,221,652
Public warrants		246,447		246,447		246,447		-		-
Private placement warrants		9,632		9,632		-		-		9,632
PIPE Warrants		79,512		79,512		-		-		79,512
Abaca Warrants		1,024,900		1,024,900		-		-		1,024,900
Third anniversary payment consideration		322,000		322,000		-		-		322,000
Forward purchase derivative		7,309,580		7,309,580		-		-		7,309,580

The change in the assets measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value are presented in the following table:

	For the three months ended March 31, 2025
	PIPE Warrants			Abaca Warrant			Private Placement Warrants			Third anniversary payment consideration			Forward Purchase Derivative
Balance at the beginning of the period	$	79,512		$	1,024,900		$	9,632		$	322,000		$	7,309,580
Fair value adjustment		(71,918	)		(795,652	)		(9,110	)		(161,000	)		-
Balance at the end of the period	$	7,594		$	229,248		$	522		$	161,000		$	7,309,580

	For the Year ended December 31, 2024
	PIPE Warrants			Abaca Warrant			Private Placement Warrants			Third anniversary payment consideration			Forward Purchase Derivative
Balance at the beginning of the period	$	273,124		$	3,384,085		$	25,070		$	810,000		$	7,309,580
Fair value adjustment		(193,612	)		(2,359,185	)		(15,438	)		(488,000	)		-
Balance at the end of the period	$	79,512			1,024,900			9,632		$	322,000		$	7,309,580

As of March 31, 2025 and on December 31, 2024, the valuation of private placement warrants, PIPE warrants, and Abaca warrants was carried out using the Black-Scholes model, while the fair value of the Abaca third anniversary payment consideration was determined using the Black Scholes Merton Option pricing model. As of March 31, 2025 and December 31, 2024, these warrants were valued using Level 3 inputs.

As of March 31, 2025, the Company evaluated the fair value of its FPA derivative using a Monte Carlo Simulation within a risk-neutral framework, a method derived from the Income Approach, based on calculations from December 31, 2022. During the three months ended March 31, 2025, and the year ended December 31, 2024, there were no significant changes in risk factors, such as volatility, expected term, and reset price, that would impact the valuation of the FPA derivative. The Company will continue to monitor the fair value of the forward option derivative each reporting period, with any necessary adjustments recorded in the Statements of Operations.

During the three months ended March 31, 2025, and March 31, 2024, there were no changes in the classification of financial instruments within Level 2 and Level 3 of the fair value hierarchy.

The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the private placement warrants, public warrants, third anniversary payment consideration and Abaca warrants as of their measurement dates:

	March 31, 2025									December 31, 2024
	PIPE Warrants			Private Warrants			Third Anniversary Payment Consideration			Abaca Warrants			PIPE Warrants			Private Warrants			Third Anniversary Payment Consideration			Abaca Warrants
Exercise price	$	100.00			230.00			-			40.00		$	100.00			230.00			-			40.00
Share Price	$	4.29			4.29			4.29			4.29		$	9.00			9.00			9.00			9.00
Expected term (years)		2.49			2.49			0.51			3.57			2.74			2.74			0.76			3.84
Volatility		91.92	%		91.92	%		91.92	%		91.92	%		103.00	%		103.00	%		103.00	%		103.00	%
Risk-free rate		3.89	%		3.89	%		3.89	%		3.94	%		4.26	%		4.26	%		4.26	%		4.33	%

The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the forward purchase derivatives as of their measurement dates on March 31, 2025 and December 31, 2024:

	March 31, 2025			December 31, 2024
Reset Price	$	25.00		$	25.00
Expected term (years)		0.49			0.74
Additional Maturity Consideration per share	$	40.00		$	40.00
Volatility		46	%		46	%
Risk-free rate		4.20	%		4.2	%
Risk-adjusted discount rate		13.40	%		13.4	%