NOTE 9 - DERIVATIVE LIABILITY

The Convertible Promissory Note with 1800 Diagonal Lending LLC with the issue date of April 16, 2025 is accounted for under ASC 815.  The variable conversion price is not considered predominantly based on a fixed monetary amount settleable with a variable number of shares due to the volatility and trading volume of the Company’s common stock. The Company’s derivative liabilities have been measured at fair value on June 30, 2025 and April 16, 20025 using the binomial model.

The inputs into the binomial models are as follows:

The fair value of the derivative liability relating to the Notes issued to 1800 Diagonal Lending LLC on April 16, 2025 was $310,220 of which $75,000 was recorded as a debt discount and the remainder of $235,220 was recorded as initial derivative expense. The decrease in the fair value of the conversion option derivative liability of $171,453 is recorded as a gain in the consolidated statements of operations for the six months ended June 30, 2025. The fair value of the derivative liability is $138,767 on June 30, 2025.