v3.26.1
DERIVATIVE LIABILITIES
6 Months Ended
Jun. 30, 2026
DERIVATIVE LIABILITIES  
DERIVATIVE LIABILITIES

NOTE 15 – DERIVATIVE LIABILITIES

 

The notes described in Note 12, Convertible Notes Payable, contained embedded conversion options with a conversion price that could result in the issuance of an indeterminate amount of shares of common stock in the future to settle the host contract. Accordingly, the embedded conversion options were bifurcated from the convertible notes and treated as separate liabilities. The fair value of such liability amounts was calculated using “Level 3” type inputs (as described in Note 4, Summary Of Significant Accounting Policies - Fair Value Of Financial Instruments) and marked to market at the end of each reporting period.

 

The Company estimated the fair value of its embedded conversion option liabilities as of June 30, 2026 and 2025 utilizing the following inputs:

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

Expected term (in years)

 

 

1.0

 

 

 

1.0

 

Volatility

 

 

80%

 

 

64%

Dividends

 

None

 

 

None

 

Risk-free interest rate

 

 

4.0%

 

 

4.0%

 

The Company recorded derivative liabilities as of June 30, 2026 and December 31, 2025 as follows:

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$316,404

 

 

$392,747

 

 

The changes in derivative liabilities during the six months ended June 30, 2026 and 2025 were as follows:

   

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

$392,747

 

 

$338,061

 

Mark-to-market adjustment

 

 

(76,343)

 

 

(15,351)

End of period

 

$316,404

 

 

$322,710