DERIVATIVE LIABILITIES

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITIES

NOTE 8 - DERIVATIVE LIABILITIES

As of December 31, 2023 and 2022 Vystar did not have a derivative liability balance on the consolidated balance sheet as the liability was consider de minimis. Vystar recorded a gain from change in fair value of derivative liabilities of $1,778,100 for the year ended December 31, 2022 upon settlement of convertible notes payable. Vystar analyzed the conversion features and warrants of the various note agreements for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. Vystar has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with ASC 815, Vystar has bifurcated the conversion feature of the notes and recorded a derivative liability.

The embedded derivatives for the notes are carried on the Company’s consolidated balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the consolidated statement of operations and the associated fair value carrying amount on the consolidated balance sheet is adjusted by the change. Vystar fair values the embedded derivative using a lattice-based valuation model or Monte Carlo simulation.