DERIVATIVE LIABILITIES

6 Months Ended

Dec. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

NOTE 8 – DERIVATIVE LIABILITIES

The Amended and Restated Discretionary Non-revolving Line of Credit Demand Notes and Convertible Promissory Notes contain conversion options that qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period and the change in fair value is reported in the condensed consolidated statement of operations as a gain or loss on change in fair value of derivatives.

The table below sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six months ended December 31, 2025:

(in thousands)

Balance at June 30, 2025	$	11,226
Embedded conversion feature on new convertible note issued during the quarter		54
Change in the fair value of the embedded conversion option		(11,093	)
Balance at December 31, 2025	$	187

The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions.

Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

Expected

volatility

Risk-free

interest rate

Expected

dividend yield

Expected life

(in years)

At June 30, 2025

55.40-56.40

3.92-4.07

0.84-1.17

At December 31, 2025

47.70-58.70

3.55-3.72

0.13-0.67

VIP Play, Inc. 10-Q