Derivative Liability

9 Months Ended

Sep. 30, 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 September 30, 2020:

Stock price	$	0.012
Risk free rate		0.12	%
Volatility		250	%
Conversion/ Exercise price	$	.007-.008
Dividend rate		0	%

The following table represents the Company’s derivative liability activity for the nine months ended September 30, 2020:

Derivative liability balance, December 31, 2019	$	-
Issuance of derivative liability during the period		5,285,799
Fair value of beneficial conversion feature of debt converted		(1,475,603	)
Change in derivative liability during the period		(612,829	)
Derivative liability balance, September 30, 2020	$	3,197,367