Derivative Liability |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Derivative Liability [Abstract] | |
| DERIVATIVE LIABILITY | NOTE 10 – DERIVATIVE LIABILITY
On May 23, 2023, the Company issued 667 warrants with an exercise price of $67.50 exercisable until May 23, 2028 to a third party as a finder’s fee. Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 667 warrants was classified as a derivative liability on May 23, 2023. On March 31, 2026, the estimated fair value of the 667 warrants was $16. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 137.76%, risk-free rate of 3.79%, annual dividend yield of 0% and expected life of 2.1 years.
On July 6, 2023, the Company issued 222 warrants with an exercise price of $67.50 exercisable until July 6, 2028 to a third party as a finder’s fee. Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 222 warrants was classified as a derivative liability on July 6, 2023. On March 31, 2026, the estimated fair value of the 222 warrants was $5. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 133.26%, risk-free rate of 3.79%, annual dividend yield of 0% and expected life of 2.3 years.
On October 9, 2023, the Company issued 560 warrants with an exercise price of $37.50 exercisable until October 9, 2028 to a third party as a finder’s fee. Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 560 warrants was classified as a derivative liability on October 9, 2023. On March 31, 2026, the estimated fair value of the 560 warrants was $26. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 129.25%, risk-free rate of 3.79%, annual dividend yield of 0% and expected life of 2.5 years. On March 7, 2024, the Company issued 700 warrants with an exercise price of $30.00 exercisable until March 7, 2029 to a third party as a finder’s fee. Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 700 warrants was classified as a derivative liability on March 7, 2024. On March 31, 2026, the estimated fair value of the 700 warrants was $43. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 122.40%, risk-free rate of 3.81%, annual dividend yield of 0% and expected life of 2.9 years.
On June 5, 2024, the Company issued 5,333 warrants with an exercise price of $9.75 exercisable until June 5, 2029 to a third party as a finder’s fee. Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 5,333 warrants was classified as a derivative liability on June 5, 2024. On March 31, 2026 the estimated fair value of the 5,333 warrants was $750. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 120.02%, risk-free rate of 3.81%, annual dividend yield of 0% and expected life of 3.2 years.
On June 5, 2024, the Company issued 80,000 warrants with an exercise price of $7.50 exercisable until June 5, 2029 to Mast Hill (See Note 7). Upon evaluation, the warrants meet the definition of a derivative liability under ASC 815, as the Company cannot avoid a net cash settlement under certain circumstances. Accordingly, the fair value of the 80,000 warrants was classified as a derivative liability on June 5, 2024. On February 11, 2026, the exercise price was adjusted to $1.00 and number of shares underlying was adjusted to 600,000 based on certain specified events. On February 19, 2026, the exercise price was adjusted to $0.38 and number of shares underlying was adjusted to 1,558,543 based on certain specified events. On February 19, 2026, 408,332 warrants were cashless exercised. On February 24, 2026, the exercise price was adjusted to $0.32 and number of shares underlying was adjusted to 1,405,721 based on certain specified events. On February 24, 2026, 304,529 warrants were cashless exercised. On February 26, 2026, 1,020,710 warrants were cashless exercised. On March 31, 2026, the exercise price was adjusted to $0.37 and number of shares underlying was adjusted to 68,985 based on certain specified events. On March 31, 2026, the estimated fair value of the remaining 68,985 warrants was $28,602. The estimated fair value of the warrants was computed as of March 31, 2026 using Black-Scholes option-pricing model, with the following assumptions: stock price of $0.53, volatility of 120.02%, risk-free rate of 3.81%, annual dividend yield of 0% and expected life of 3.2 years.
Change in fair value of the derivative liability are included as a component of total other expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. The changes to the derivative liability resulted in an increase of $1,276,889 and $114,360 in the derivative liability and the corresponding increase in other expense as a loss for the three months ended March 31, 2026 and 2025, respectively. |