CONVERTIBLE NOTES PAYABLE |
6 Months Ended |
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Jun. 30, 2026 | |
| Debt Disclosure [Abstract] | |
| CONVERTIBLE NOTES PAYABLE | NOTE 6 – CONVERTIBLE NOTES PAYABLE
From May 21, 2026 to June 30, 2026, the Company issued three Convertible Redeemable Note (the “Notes”) with aggregate face amount of $1,245, of which $970 matures on May 21, 2027 and $275 matures December 31, 2027. The Notes were issued with a $110 original issue discount, resulting in net cash proceeds to the Company of $1,136. The Notes bear interest at stated rates ranging from 6% - 10% per annum.
Beginning on the six-month anniversary of issuance, the holders may convert all or a portion of the outstanding principal and accrued interest into shares of the Company’s common stock at a conversion prices ranging from 80% -90% of the lowest daily volume-weighted average price (“VWAP”) of the Company’s common stock during the ten trading days preceding conversion, subject to adjustment to 70% in the event of any trading restriction imposed by the Depository Trust Company, a DTC “chill”, on the Company’s shares and to 65% in the event the Company’s shares are delisted from Nasdaq, among other adjustments, including a most-favored-nation provision and standard anti-dilution protections.
The Company evaluated the conversion feature embedded in the Notes in accordance with ASC 815, Derivatives and Hedging, and determined that the conversion feature is not clearly and closely related to the debt host and does not qualify for the scope exception for contracts indexed to and settled in the Company’s own stock under ASC 815-40, Contracts in Entity’s Own Equity, due to the variable, discount-to-market pricing mechanism and the additional contingent adjustments described above. Accordingly, the conversion features were bifurcated from the Notes and are separately accounted for as a derivative liability, initially and subsequently measured at fair value, with changes in fair value recognized in earnings each reporting period. (See discussion below).
The derivative liability was initially recorded as a valuation discount at its estimated fair value of $1,050 on the issuance date. The resulting debt discount of $1,050 is being amortized to interest expense over the term of the Note using the effective interest method. During the period, the Company recognized $100 of discount amortization. As of June 30, 2026, the face value of the notes payable was $1,245 with an unamortized note discount of $ 1,059 resulting in a net carrying value of the Notes of $186.
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