v3.25.2
Derivative Liabilitites
 3 Months Ended
Mar. 31, 2025
Derivative Liabilitites [Abstract]  
DERIVATIVE LIABILITITES

NOTE 7 – DERIVATIVE LIABILITITES

 

Fair Value Assumptions Used in Accounting for Derivative Liabilities

 

ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of issuance date and March 31 2025.

 

The Black-Scholes model, which requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The current stock price is based on historical issuances. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods.

 

The following table summarizes the changes in the derivative liabilities related to convertible note and warrants during the three months ended March 31, 2025: 

 

    Three Months ended 
    March 31 
    2025 
Expected conversion price  $0.00072 - 0.00084 
Expected term   0.12 -0.75 years 
Expected average volatility   245% - 265% 
Expected dividend yield   
-
 
Risk-free interest rate   4.03% -4.13% 

 

For the three months ended March 31, 2025, the estimated fair values of the liabilities measured on a recurring basis are as follows: 

 

Fair Value Measurements Using Significant Observable Inputs (Level 3)
     
Balance - December 31, 2024  $105,337 
      
Addition of new derivatives recognized as debt discounts   50,000 
Addition of new derivatives recognized as loss on derivatives   91,456 
Change in fair value of the derivative   (140,272)
Balance - March 31, 2025  $106,521 

 

The aggregate loss on derivatives during the three months ended March 31, 2025 and 2024 as follows:

 

   Three Months Ended 
   March 31, 
   2025   2024 
Day one loss due to derivative liabilities on convertible note  $91,456   $
-
 
(Gain) loss on change in fair value of the derivative liabilities   (140,272)   115,296 
   $(48,816)  $115,296