Derivative Liability

3 Months Ended

Mar. 31, 2026

Derivative Liability [Abstract]

DERIVATIVE LIABILITY

9 DERIVATIVE LIABILITY

The convertible debt and warrants issued by the Company to Cavalry, Mercer, Quick Capital and certain of the 2025 Convertible Note holders, 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 debt and any warrants attached thereto are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible debt using a Black-Scholes valuation model.

In addition, certain convertible notes and warrants have anti-dilution price protection which results in a reduction in the conversion price of the convertible note and in the case of certain warrants an increase in the amount of shares issuable upon a reduction in exercise price, a Triggering event. There were no triggering events during the quarter ended March 31, 2026.

The net mark-to-market movement of the derivative liability for the three months ended March 31, 2026 was a net mark-to-market credit of $1,018,083, determined by using a Black-Scholes valuation model.

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

	Three months ended March 31, 2026			Year ended December 31, 2025
Conversion price	$	0.004739 to 0.01		$	0.0005 to 0.01
Risk free interest rate		3.70 to 3.72	%		3.54 to 4.44	%
Expected life of derivative liability		3 to 6 months			3 to 29 months
Expected volatility of underlying stock		186.99 to 189.60	%		189.8 to 443.26
Expected dividend rate		0	%		0	%

The movement in derivative liability is as follows:

	Three months ended March 31, 2026			Year ended December 31, 2025
Opening balance	$	1,581,520		$	1,138,204
Derivative financial liability arising from convertible notes and warrants		-			150,000
Derivative liability arising on anti-dilutive convertible notes and warrants		-			13,220,310
Fair value of derivative liability on cancelled warrants		-			(12,794,203	)
Fair value adjustment to derivative liability		(1,018,083	)		(132,791	)
Closing balance	$	563,437		$	1,581,520