v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Measurements [Abstract]  
Fair Value Measurements
6. Fair Value Measurements

 

The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

 

The Company uses three levels of inputs that may be used to measure fair value:

 

Level 1 Quoted prices in active markets for identical assets or liabilities.

 

Level 2 Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

 

Level 3 Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).

 

Transfer into and transfers out of the hierarchy levels are recognized as if they had taken place at the end of the reporting period. There have been no changes in Level 1, Level 2, and Level 3 and no changes in valuation. The fair value of the Company’s derivative liability was determined using significant unobservable measures and therefore classified as Level 3. The Company does not have any financial instruments in the Level 1 or Level 2 category.

 

    Fair value measured as of June 30, 2026  
    Total at
June 30,		     Quoted
prices in
active
markets		     Significant
other
observable
inputs		     Significant
unobservable
inputs		  
    2026     (Level 1)     (Level 2)     (Level 3)  
Liabilities:                        
Derivative liability   $ 6,199     $      -     $      -     $ 6,199  

 

    Fair value measured as of December 31, 2025  
    Total at
December 31,		     Quoted
prices in
active
markets		     Significant
other
observable
inputs		     Significant
unobservable
inputs		  
    2025     (Level 1)     (Level 2)     (Level 3)  
Liabilities:                        
Derivative liability   $ 1,218,258     $      -     $      -     $ 1,218,258  

 

The table below shows the inputs used to determine the fair value of the derivative liability:

 

    June 30,
2026		     December 31,
2025		  
Risk-free interest rate     3.68 %     3.68 %
Market discount rate     0-30 %     30 %
Term     4.54 years       4.79 years  
Expected volatility     140 %     140 %

 

The following table sets forth a summary of the change in the fair value of the derivative liability that are measured at fair value on a recurring basis for the six months ended June 30, 2026

 

Balance, as of December 31, 2025   $ 1,218,258  
Payments made *     (6,362,143 )
Change in fair value     1,268,162  
Loss on settlement     3,881,922  
Balance, as of June 30, 2026   $ 6,199  

 

* During the six months ended June 30, 2026, $2,769,189 was paid in cash and shares of common stock, valued at $3,592,954, were issued as additional payment.