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DERIVATIVE LIABILITIES
6 Months Ended
Jun. 30, 2021
DERIVATIVE LIABILITIES  
10. DERIVATIVE LIABILITIES

10. DERIVATIVE LIABILITIES

 

The fair value of the Company’s derivative liabilities is estimated at the issuance date and is revalued at each subsequent reporting date. We estimate the fair value of derivative liabilities associated with our convertible notes payable, Series B Preferred Stock and stock options using a multinomial lattice model based on projections of various potential future outcomes. Where the number of stock options or common shares to be issued under these agreements is indeterminate, the Company has concluded that the equity environment is tainted, and all additional stock options, convertible debt and equity are included in the value of the derivatives.

The significant assumptions used in the valuation of the derivative liabilities as of June 30, 2021 are as follows:

 

Conversion to stock

 

Monthly

 

Stock price on the valuation date

 

$0.022

 

Risk free interest rates

 

0.22% - 2.84

%

Years to maturity

 

0.15 - 15.0

 

Expected volatility

 

146.7%–351.1

 

The value of our derivative liabilities was estimated as follows at:

 

 

 

June 30
 2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

Convertible notes payable

 

$1,799,176

 

 

$3,368,619

 

Series B Preferred Stock

 

 

-

 

 

 

4,137,413

 

Stock options

 

 

5,006,962

 

 

 

3,776,059

 

 

 

 

 

 

 

 

 

 

Total

 

$6,806,138

 

 

$11,282,091

 

 

The calculation input assumptions are subject to significant changes from period to period and to management’s judgment; therefore, the estimated fair value of the derivative liability will fluctuate from period to period, and the fluctuation may be material.