v3.26.1
DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2026
DERIVATIVE FINANCIAL INSTRUMENTS  
DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 9 – DERIVATIVE FINANCIAL INSTRUMENTS

 

Derivative financial instruments are comprised of the fair value of conversion features embedded in convertible promissory notes for which the conversion rate is not fixed but instead is adjusted based on a discount to the market price of the Company’s common stock. The fair market value of the derivative liabilities was calculated at inception of each convertible promissory notes for which the conversion rate is not fixed and allocated to the respective convertible notes. The derivative financial instruments are then revalued at the end of each period, with the change in value recorded to “Change in fair value of on derivative financial instruments.”

 

Derivative financial instruments and changes thereto recorded in the three and six months ended June 30, 2026 and 2025, include the following:

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$262,000

 

 

$-

 

 

$634,424

 

 

$-

 

Inception of derivative financial instruments

 

 

630,355

 

 

 

-

 

 

 

695,188

 

 

 

-

 

Change in fair value of derivative financial instruments

 

 

(104,629)

 

 

-

 

 

 

(541,886)

 

 

-

 

Conversion or extinguishment of derivative financial instruments

 

 

(16,484)

 

 

-

 

 

 

(16,484)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, end of period

 

$771,242

 

 

$-

 

 

$771,242

 

 

$-

 

 

Fair market value of the derivative financial instruments is measured using the following range of assumptions:

 

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Pricing model utilized

 

Black Scholes

 

 

 

-

 

Risk free rate range

 

3.45% to 4.01%

 

 

 

-

 

Expected life range (in years)

 

0.18 to 1.00

 

 

 

-

 

Volatility range

 

90.64% to 136.60%

 

 

 

-

 

Dividend yield

 

 

0.00%

 

 

-

 

 

The entire amount of derivative instrument liabilities is classified as current due to the fact that settlement of the derivative instruments could be required within twelve months of the balance sheet date. The Company had no derivative financial instruments in the three or six months ended June 30, 2025.