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WARRANT LIABILITIES | 3 Months Ended
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Mar. 31, 2026
Warrant Liabilities |
WARRANT LIABILITIES | NOTE 11 – WARRANT LIABILITIES Effective November 7, 2022, AGIG issued the $5,000,000 AGIG Convertible Note. As part of the funding agreement the Company agreed that, in the event of a Next Round Funding, the Company would issue a warrant with a term of 5 years to the lender to purchase $5,000,000 worth of the securities issued in the Next Round Funding with an exercise price equivalent to 80% of the price paid by investors in the Next Round Funding. The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance from ASC 480 and ASC 815-40. The Company determined the warrants failed the indexation guidance under ASC 815-40, as they contain provisions that provide note holders with rights to a variable number of shares based on future financing terms. Specifically, should AGIG, undertake a Next Round Funding before the maturity date, the note holder will receive equity warrants to purchase securities issued in the Next Round Funding at an aggregate value of $5,000,000, with an exercise price equal to 80% of the price paid by investors in the offering. This embedded feature represents a deemed redemption feature due to the substantial premium received by the note holder. As a result, the Company concluded that the redemption features require bifurcation from the convertible note and subsequent accounting as a freestanding warrant liability in accordance with ASC 815-40. The warrants had a fair value of $1,866,243 on issuance and were classified as liabilities with a corresponding decrease to the AGIG Convertible Note outstanding balance of $5,000,000 as a discount resulting in Debt Net of Discount Balance of $3,133,757. This discount was recognized over the initial one-year term of the AGIG Convertible Note as interest expense to par using the effective interest method as noted above. The effective interest rate was 42.10%. The debt discount had been fully amortized during the financial year ended December 31, 2025 Accordingly, pursuant to ASC 815-40, the Company recorded the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company’s consolidated statement of operations until their exercise or expiration. The estimated fair value of the warrants was calculated using the Black Scholes model with the assumptions set out below, weighted for management’s estimate of the probability of a Next Round Funding being completed and discounted back to the valuation date using estimated venture capital rates of return. SCHEDULE OF FAIR VALUE WARRANT
Input |  | March 31, 2026 |  |  | December 31, 2025 |
Expected term |  |  | 5 years |  |  |  | 5 years |
Principal |  |  | 5,000,000 |  |  |  | 5,000,000 |
Exercise price |  |  | 4,000,000 |  |  |  | 4,000,000 |
Volatility |  |  | 71.7 | % |  |  | 70.9 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
Risk free rate of return |  |  | 3.85 | % |  |  | 3.60 | %
Estimated probability of occurrence of a Next Round Funding |  |  | 0 | % |  |  | 0 | %
Estimated venture capital rates of return |  |  | 78.4 | % |  |  | 77.2 | %
The completion of the Share Exchange on July 1, 2025, has allowed the Company to access capital markets as evidenced in the Equity Line of Credit Agreements and Convertible Note. Consequently, effective June 30, 2025, AGIG estimated the ongoing probability of the occurrence of a Next Round Funding as remote and accordingly the estimated fair value of the warrants was determined to be $0 on an ongoing basis. AGIG Plastics to Liquids LLC Effective September 24, 2021, AGIG Plastics to Liquids LLC, a wholly owned subsidiary of AGIG, entered into a technology license and services agreement with a third-party technology provider. As part of the agreement, AGIG Plastics to Liquids LLC issued a warrant to the licensor to acquire the number of membership units in AGIG Plastics to Liquids LLC equivalent to 1.5% of its fully diluted capitalization. The warrant has an exercise price of $0.01 per membership unit, a term of 10 years and is exercisable in the event of a change of control or public listing of AGIG Plastics to Liquids LLC or its parent. The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance from ASC 480 and ASC 815-40. The Company determined the warrants failed the indexation guidance under ASC 815-40, as they contain provisions that provide note holders with rights to a variable number of shares. Accordingly, pursuant to ASC 815-40, the Company recorded the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company’s consolidated statements of operations until their exercise or expiration. However, no fair value has been assigned to these warrants as AGIG Plastics to Liquids LLC has no equity, no planned operations, and consequently only nominal projected value. Effective July 1, 2025, upon the completion of the Share Exchange, this warrant became exercisable and membership units representing 1.5% of AGIG Plastics to Liquids LLC fully diluted capitalization were issued to the warrant holder.

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