v3.26.1
Other Investment
 3 Months Ended
Mar. 31, 2026
Other Investment [Abstract]  
Other investment

Note 9 - Other Investment

 

At December 31, 2025, the Company held 10,000 shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”) of Exousia Bio, Inc. (formerly L A M Y), with a carrying value of $0. The Series B Preferred Stock is contingently convertible into 47,000,000 shares of Marijuana, Inc. common stock solely upon Marijuana, Inc., a public company controlled by Exousia Bio, Inc. The Series B Preferred Stock can only be converted upon Marijuana, Inc.’s successful uplisting to a qualified exchange.

 

On February 27, 2026, the Company surrendered the 10,000 shares of Series B Preferred Stock in exchange for 2,500,000 shares of common stock of Exousia Bio, Inc. On the date of the share exchange, the Company recognized a gain on exchange of equity investment of $825,000, which represented the fair value of the 2,500,000 shares of Exousia Bio, Inc. based on the OTCMarkets’ closing mark price of Exousia Bio, Inc’s shares.

 

The Company accounts for its investment in Exousia Bio, Inc. common stock under ASC 321, Investments — Equity Securities. As the shares have a readily determinable fair value based on quoted OTCMarkets’ prices, the investment is measured at fair value at each reporting date, with unrealized gains and losses recognized in earnings in the period in which they occur. For the three months ended March 31, 2026, the Company recognized an unrealized gain on this investment of $175,000.

 

The agreement included the following restrictions:

 

  ● Lock-Up Period (1 year from agreement date): No sale of any shares are permitted during the Lock-Up period.

 

  ●

Leak-Out Period (6 months afterlock-up): Sales are capped at 20,000 shares per day and 100,000 shares per month.

 

For the three months ended March 31, 2026, the Company recognized an unrealized gain on other investment of $175,000.

The investment in Exousia Bio, Inc. is remeasured at fair value on a recurring basis. The following table presents the fair value hierarchy as of February 27, 2026 (initial recognition date) and March 31, 2026:

 

   Fair Value
as of
February 27,
2026		   Unrealized
Gain as of
March 31,
2026		   Fair Value
as of
March 31,
2026		 
             
Other Investment  $825,000   $175,000   $1,000,000 

 

  1. The fair value of the investment is classified as Level 1 in the fair value hierarchy under ASC 820, Fair Value Measurement, as it is based on quoted market prices in active markets for identical assets. Management notes that the existence of the lock-up and leak-out restrictions may affect the liquidity and ultimate realizable value of this investment, and will continue to reassess the fair value at each reporting date with any resulting unrealized gains or losses recognized in earnings consistent with ASC 321. Management concluded the contractual restrictions were specific to the holder and therefore did not affect the unit of account or Level 1 classification under ASC 820.