v3.26.1
Derivative Liability
9 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liability

Note 5 – Derivative Liability

 

On December 2, 2025, January 15, 2026 and January 30, 2026, the Company issued convertible notes payable whose conversion options are being accounted as a derivative liability pursuant to ASC 815, Derivatives and Hedging (see Note 2). The derivative liability is remeasured to fair value at each reporting period, and the change in the fair value is recognized in earnings in the accompanying statements of operations. The Company estimated the fair value of the conversion option derivative liability using a variable option pricing model. The fair value of the derivative liability at December 31, 2025 and March 31, 2026 was $7,000 and $18,000, respectively.

 

The following table provides a roll-forward of the derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the period ended March 31, 2026, as follows:

     
   Fair Value of
Derivative Liability
 
At issuance, December 5, 2025, January 15, 2026 and January 30, 2026  $38,000 
Change in fair value of derivative liability   (20,000)
March 31, 2026  $18,000 

 

The following are the average inputs used by the Company in the valuation of the derivative liability:

       
         
Stock price   $ 0.03 to 0.08  
Risk free interest rate     3.48% to 3.70%  
Expected volatility     174.5% to 236.5%   
Expected life in months     12  
Number of common stock issuable     1,206,140 to 1,270,708