Derivative Liability

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Derivative Liability

Note 11 - Derivative Liability

Certain of the convertible notes payable discussed in Note 8 have a conversion price that can be adjusted based on the Company’s stock price which results in the conversion feature being recorded as a derivative liability.

The fair value of the derivative liability is recorded and shown separately under current liabilities. Changes in the fair value of the derivative liability is recorded in the statement of operations under other income (expense).

The Company uses a weighted average Black-Scholes option pricing model with the following assumptions to measure the fair value of derivative liability at March 31, 2020:

Stock price	$	0.011
Risk free rate		0.17	%
Volatility		575	%
Conversion/ Exercise price	$	.008-.009
Dividend rate		0	%

The following table represents the Company’s derivative liability activity for the three months ended March 31, 2020:

Derivative liability balance, December 31, 2019	$	-
Issuance of derivative liability during the period		4,936,912
Fair value of beneficial conversion feature of debt converted		(1,021,001	)
Change in derivative liability during the period		1,449,932
Derivative liability balance, March 31, 2020	$	5,365,843