ALLOCATION OF FAIR VALUE IN PRIVATE PLACEMENT

3 Months Ended

Mar. 31, 2026

Allocation Of Fair Value In Private Placement

ALLOCATION OF FAIR VALUE IN PRIVATE PLACEMENT

NOTE 10 – ALLOCATION OF FAIR VALUE IN PRIVATE PLACEMENT

Unit Offering

During the period from October 30, 2025, to January 23, 2026, the Company proposed a private placement offering investors to purchase shares and warrants issued together as a unit; however, each warrant is detachable and separately exercisable to purchase one share of Common Stock. The average price was $0.051 per unit, less a broker (Member FINRA / SIPC) fee consisting of 8% cash commission and 8% bonus shares. The Company raised a total of $958,640 (after $83,360 cash commission) and issued 21,467,392 shares of Common Stock (after 1,717,391 bonus shares), as well as 19,750,001 5-year warrants exercisable to buy Common Stock at $0.12 per share. The net received by the Company was $0.047 per unit.

In the period ended on March 31, 2026, raised net cash proceeds of $241,040 (after payment of $20,960 in commission) the fair value of the Common Stock was determined based on the quoted market price of $0.051 per unit on the issuance date. The fair value of the warrants was estimated using the Black-Scholes option-pricing model, resulting in a fair value of $0.042 per warrant.

In accordance with ASC 505-10-30-6 (Relative Fair Value Allocation), the total proceeds were allocated to the Common Stock and the warrants based on their relative fair values on the date of issuance.

The allocation was calculated as follows:

Component	Standalone Fair Value		% of Total Fair Value			Allocation of Proceeds		Allocation per Share/Warrant
Common Stock (4,716,000 shares)	$	283,381		60.45	%	$	145,701	$	0.0309
Common Stock (4,716,000 shares)	$	283,381		60.45	%	$	145,701	$	0.0309
Warrants (4,366,667 warrants)		185,430		39.55	%		95,339		0.0218
Total	$	468,811		100	%	$	241,040

The allocated value per share is $0.031 ($145,701 ÷ 4,716,000 shares), and the allocated value per warrant is $0.022 ($95,339 ÷ 4,366,667 warrants), or a 48.58% discount to market.

When a company issues two or more equity instruments (e.g., Common Stock and warrants) in a single transaction for a lump-sum amount, the proceeds must be allocated to each instrument based on their relative fair values on the issuance date. No gain or loss is recognized on the initial recognition.

Warrant Terms

The warrants have an exercise price of $0.12 per share, are exercisable immediately, and expire between on 1/22/2031. Each warrant entitles the holder to purchase one share of Common Stock. As of March 31, 2026, 21,042,031 warrants were outstanding.

In accordance with ASC 505-10-50-3, the following information is disclosed regarding the warrants:

	●	Number of shares issuable upon exercise: 4,366,667 shares
	●	Exercise price: $0.12 per share
	●	Exercise period: through 1/22/2031

Fair Value Measurement (ASC 820)

The fair value of the warrants was estimated using the Black-Scholes option-pricing model in accordance with ASC 820-10-35-2 (Fair Value Measurement Framework). The following significant inputs were used in the valuation:

Assumption	Value
Expected volatility		119.99%
Expected term		5 years
Risk-free interest rate		3.92%
Expected dividend yield		none

The fair value measurement of the warrants is classified within Level 3 of the fair value hierarchy established by ASC 820-10-35-37 through ASC 820-10-35-54A, as the valuation inputs include unobservable inputs (expected volatility) that are significant to the overall measurement.

Warrant Activity

A summary of warrant activity for the quarter ended March 31, 2026 is as follows:

SUMMARY OF WARRANT ACTIVITY

	Number of Warrants ^*		Weighted Average Exercise Price		Weighted Average Remaining Expected Term
Outstanding as at January 1, 2026		16,675,364	$	0.13		4.6
Granted		4,366,667		0.12		5.0
Exercised		—		—		—
Forfeited/Cancelled		—		—		—
Outstanding as at March 31, 2026		21,042,031	$	0.12		4.6