Derivative Liability

12 Months Ended

Dec. 31, 2025

Derivative Liability [Abstract]

DERIVATIVE LIABILITY

9 DERIVATIVE LIABILITY

The convertible notes and warrants issued by the Company to Cavalry, Mercer and certain of the 2025 noteholders as described in Note 8 have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time and certain notes and warrants have fundamental transaction clauses which might result in cash settlement, due to these factors, all convertible notes and any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible notes using a Black-Scholes valuation model.

Between September 12, 2023 and December 20, 2023, and between April 2, 2024 and June 25, 2024, the Company entered into convertible note agreements with RRH which have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, which gave rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $416,317 and $268,873, respectively, but limited to the cash value of the convertible notes of $235,000 and $150,000, respectively, using a Black-Scholes valuation model. These notes have subsequently been extinguished.

On August 6, 2024, the Company received a conversion notice from an accredited investor pursuant to which $13,833 of the remaining principal, interest and late payment penalty under the note was converted into 164,679 shares of Common Stock at a conversion price of $0.084 per share. As a result of the conversion of the note, all other outstanding promissory notes and warrants of the Company that contain price-based anti-dilution protection had the conversion prices of such notes and the exercise price of such warrants adjusted to $0.084 per share and certain warrants of the Company that contain “full ratchet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.084 per share (the “Triggering Event”).

Convertible notes with an aggregate principal and interest balance outstanding on August 6, 2024 of $2,165,578 have such price-based anti-dilution protection. Based on the conversion as described above, the conversion price of these notes was reset to $0.084. In addition, certain warrants exercisable for 3,145,342 shares of common stock at an exercise price of $0.345 per share, have a full ratchet provision which resulted in an increase in the number of shares of Common Stock exercisable for such warrants by 9,773,028 to a total number of shares of Common Stock exercisable for such warrants of 12,918,370. In addition to this, certain warrants exercisable for 457,897 shares of common stock have exercise price protection which will reduce the exercise price of these warrants to $0.084 per share from $0.345 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $119,511.

The value of the derivative liability related to the anti-dilution price protected convertible notes and warrants was evaluated immediately prior to the Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability of $4,318,669 on the convertible notes and $2,051,405 on the warrants. In addition, a payment was not made on a convertible note with a no notice default clause, resulting in the triggering of a variable priced conversion feature, which gave rise to a derivative liability on the payment due date, this gave rise to an additional derivative liability of $56,329, both determined using a Black-Scholes valuation model.

The net mark-to-market movement of the derivative liability for the year ended December 31, 2024 was a net mark-to-market credit of $6,892,395, determined by using a Black-Scholes valuation model.

On June 2, 2025, the Company received a conversion notice from an accredited investor, pursuant to which $4,300 of the remaining principal and interest under the note was converted into 8,600,000 shares of Common Stock at a conversion price of $0.0005 per share. As a result of the conversion, all other outstanding promissory notes and warrants of the Company that contain price-based anti-dilution protection had the conversion prices of such notes and the exercise price of such warrants adjusted to $0.0005 per share and certain warrants of the Company that contain “full ratchet” anti-dilution price protection had the number of shares exercisable for such warrants increased by the full ratchet provision and the conversion prices of such warrants adjusted to $0.0005 per share (the “Triggering Event”).

Convertible debt with an aggregate principal and interest balance outstanding on June 2, 2025 of $1,988,523 have such price-based anti-dilution protection. Based on the conversion price above, the conversion price of these notes was reset to $0.0005. In addition, certain warrants exercisable for 982,029,937 shares of common stock at an exercise price of $0.001105 per share, have a full ratchet provision which results in an increase in the number of shares of Common Stock exercisable for such warrants by 1,188,256,223 to a total number of shares of Common Stock exercisable for such warrants of 2,170,286,160. In addition to this, certain warrants exercisable for 50,457,897 shares of common stock have exercise price protection which reduced the exercise price of these warrants to between $0.0005 and $0.000585 per share from exercise prices ranging from $0.005 to $0.084 per share, resulting in a decrease in potential proceeds receivable from the exercise price of such warrants by $223,558.

The value of the derivative liability related to the anti-dilution price protected convertible debt and warrants was evaluated immediately prior to the Triggering Event and immediately after the Triggering Event, resulting in an additional derivative liability of $16,925,719 on the convertible debt and $8,250,569 on the warrants.

On August 13, 2025, the Company entered into an agreement to modify the conversion price of certain notes issued to Mercer, Cavalry and affiliated entities from conversion prices ranging from $0.0005 to $0.084 per share, to a conversion price of $0.01 per share of common stock. A total of $2,009,024 of the convertible debt is subject to derivative liability, resulting in a gain on repricing of convertible debt of $11,955,877. In addition, convertible debt with a fixed conversion price and not subject to derivative liability was repriced resulting in a deemed dividend expense of $33,378 and certain warrants were repriced resulting in a deemed dividend expense of $704, resulting in a total deemed dividend expense of $34,082.

The Company was not able to maintain the terms of the August 13, 2025 agreement which required the conversion price to revert back to the pre-agreement price of $0.0005 per share. However, on March 30, 2026, the Company reached an agreement with Cavalry and Mercer to retain the conversion price of $0.01 per share with effect from December 31, 2025 to May 1, 2026.

On October 1, 2025 and December 5, 2025, the Company entered into convertible note agreements with two accredited investors which have variable priced component to its conversion feature. The conversion price is the lower of $0.01 per share and 90% of the volume weighted lowest average share price over a 20-day trading period, which gave rise to a derivative financial liability, which was initially valued at inception at $633,758 and $60,699, respectively, but limited to the cash value of the convertible notes of $100,000 and $50,000, respectively, using a Black-Scholes valuation model.

The net mark-to-market movement of the derivative liability for the year ended December 31, 2025 was $132,791, determined by using a Black-Scholes valuation model.

The following assumptions were used in the Black-Scholes valuation model:

	Year ended December 31, 2025			Year ended December 31, 2024
Conversion price	$	0.0005 to 0.01		$	0.0364 to 0.345
Risk free interest rate		3.54 to 4.44	%		3.58 to 5.50	%
Expected life of derivative liability		3 to 29 months			1 to 41 months
Expected volatility of underlying stock		189.8 to 443.26	%		24.3 to 262.09%
Expected dividend rate		0	%		0	%

The movement in derivative liability is as follows:

	Year ended December 31, 2025			Year ended December 31, 2024
Opening balance	$	1,138,204		$	1,434,196
Derivative financial liability arising from convertible notes and warrants		150,000			226,329
Derivative liability arising on anti-dilutive convertible notes and warrants		13,220,310			6,370,074
Fair value of derivative liability on cancelled warrants		(12,794,203	)		-
Fair value adjustment to derivative liability		(132,791	)		(6,892,395	)
Closing balance	$	1,581,520		$	1,138,204