Derivative Liabilities

9 Months Ended

Sep. 30, 2025

Derivative Liabilities

Derivative Liabilities

NOTE 7 – DERIVATIVE LIABILITIES

The above convertible notes contained embedded conversion options with a conversion price that could result in issuing an indeterminate amount of future common stock to settle the host contract. Accordingly, the embedded conversion options are required to be bifurcated from the host instrument (convertible note) and treated as a liability, which is calculated at fair value, and marked to market at each reporting period.

During the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively, the Company used the Black-Scholes pricing model to estimate the fair value of its embedded conversion option liabilities on both the commitment date and the remeasurement date with the following inputs:

	September 30, 2025			December 31, 2024
Expected term (years)		1.00			1.00
Expected volatility	30%-80		%	62%-84		%
Expected dividends	None			None
Risk free interest rate	3.6%-4.0		%	4.0%-5.1		%

A reconciliation of the beginning and ending balances for the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows at September 30, 2025 and December 31, 2024:

Derivative liabilities - December 31, 2024	$	338,016
Fair value mark to market adjustment		(31,306	)
Derivative liabilities - March 31, 2025		306,710
Fair value mark to market adjustment		16,000
Derivative liabilities - June 30, 2025	$	322,710
Fair value mark to market adjustment		(7,676	)
Derivative liabilities - September 30, 2025	$	315,034

Changes in fair value of derivative liabilities are included in other income (expense) in the accompanying consolidated statements of operations.

During the three months ended September 30, 2025 and 2024, the Company recorded a change in the fair of derivative liabilities resulting in gains/(losses)of $7,676 and ($49,812) respectively.

During the nine months ended September 30, 2025 and 2024, the Company recorded a change in fair of derivative liabilities resulting in gains/(losses) of $23,027 and ($191,483), respectively.