DERIVATIVE LIABILITY |
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Jun. 30, 2026 | ||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||
| DERIVATIVE LIABILITY | NOTE F - DERIVATIVE LIABILITY
The derivative liability consists of:
The Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate.
The fair value of the derivative liability is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model. Assumptions used for the calculation of the derivative liability of the Notes at December 31, 2020 were (1) stock price of $ per share, (2) conversion price of $ per share, (3) term of 0 days, (4) expected volatility of 142.94%, and (5) risk free interest rate of 0%. Assumptions used for the calculation of the derivative liability of the Notes at March 31, 2021 were (1) stock price of $ per share, (2) conversion price of $ per share, (3) term of 345 days, (4) expected volatility of 142.94%, and (5) risk free interest rate of .07%. As of June 30, 2021, the note no longer carries variable conversion features and as such, the derivative was reduced to zero.
(i)As discussed in Note A above, warrants with “down round” features (and do not contain variable conversion features) are not subject to derivative liability treatment effective January 1, 2019.
TRAFALGAR INTERNATIONAL, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Six Months Ended June 30, 2026 and 2025 (Unaudited)
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