v3.26.1
Derivative Liabilities
6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Derivative Liabilities

Note 8: Derivative Liabilities

 

Certain of the Company’s convertible notes and warrants contain features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives related to the Kishon note is the Monte Carlo Model while the bridge notes are valued using the black-scholes model. Valuations derived from these models are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. The derivative components of these notes are valued at issuance, at conversion, at restructuring, and at each period end.

 

Derivative liability activity for the six months ended June 30, 2026, is summarized in the table below: 

 

December 31, 2025  $399,160 
New derivative liability related to issuance of convertible notes   556,813 
Gain on revaluation   (133,277)
June 30, 2026  $822,696 

 

The following assumptions were used for the valuation of the derivative liability associated with this obligation:

 

  The stock price on the date of valuation represents the fair market value of the stock
     
  The notes convert with variable conversion prices based on percentages of the lowest trades over the prior 10- 20 trading days
     
  Assumed volatility of 232% as of June 30, 2026
     
  Assumed risk free rate of 3.98% as of June 30, 2026
     
  The holder would automatically convert the note immediately (based on ownership or trading volume limitations) if the registration were effective and the Company was not in default