v3.26.1
Derivative Liabilities
3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Derivative Liabilities

Note 8: Derivative Liabilities

 

Certain of the Company’s convertible notes and warrants contain features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives is the Monte Carlo Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. The derivative components of these notes are valued at issuance, at conversion, at restructuring, and at each period end.

Derivative liability activity for the three months ended March 31, 2026, is summarized in the table below: 

 

December 31, 2025  $399,160 
Loss on revaluation   4,388 
March 31, 2026  $403,548 

 

The following assumptions were used for the valuation of the derivative liability associated with this obligation:

 

  The stock price on the date of valuation represents the fair market value of the stock
     
  The notes convert with variable conversion prices based on the percentages of the lowest trades over the prior 20 trading days
     
  The holder would automatically convert the note immediately (based on ownership or trading volume limitations) if the registration were effective and the Company was not in default