v3.26.1
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

Note 16 – Fair Value of Financial Instruments

 

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company has cash, notes receivable, derivative liabilities and debts that must be measured under the fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

 

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

 

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of June 30, 2026 and December 31, 2025:

  

   Level 1   Level 2   Level 3 
   Fair Value Measurements at June 30, 2026 
   Level 1   Level 2   Level 3 
Assets               
Cash  $211,985   $-   $- 
Right-of-use-asset   -    -    1,289,725 
Total assets   211,985    -    1,289,725 
Liabilities               
Convertible note payable, related party net of $16,735 of discounts   -    -    2,883,265 
Notes payable   -    1,359,818    - 
Note payable, related party   -    3,000,000    - 
Lease liabilities   -    -    1,685,411 
Total liabilities   -    4,359,818    4,568,676 
Total assets and liabilities  $211,985   $(4,359,818)  $(3,278,951)

 

   Level 1   Level 2   Level 3 
   Fair Value Measurements at December 31, 2025 
   Level 1   Level 2   Level 3 
Assets               
Cash  $616,278   $-   $- 
Right-of-use-asset   -    -    1,385,892 
Total assets   616,278    -    1,385,892 
Liabilities               
Convertible note payable, related party net of $39,309 of discounts   -    -    3,360,691 
Notes payable   -    1,534,500    - 
Lease liabilities   -    -    1,704,664 
Total liabilities   -    1,534,500    5,065,355 
Total assets and liabilities  $616,278   $(1,534,500)  $(3,679,463)

 

The Company had no transfers between Level 1, Level 2, and Level 3 fair value measurements during the six months ended June 30, 2026 and the year ended December 31, 2025.