Derivative Liability

12 Months Ended

Dec. 31, 2023

Derivative Liability

Derivative Liability

Note 14 - Derivative Liability

Certain of the convertible notes payable discussed in Note 10 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 FV of the derivative liability is recorded and shown separately under current liabilities. Changes in the FV 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 FV of derivative liability at December 31, 2023 and 2022:

	December 31,			December 31,
	2023			2022
Stock price	$	0.001		$	0.001
Risk free rate		5.26 – 5.60	%		4.42 – 4.76	%
Volatility		427 – 502	%		213 – 277	%
Conversion/ Exercise price	$	0.000075 – 0.000085		$	0.0015 – 0.0017
Dividend rate		0	%		0	%

The following table represents the Company’s derivative liability activity for the period ended December 31, 2023:

Derivative liability balance, December 31, 2022	$	1,714,143
Issuance of derivative liability during the period		1,369,920
Fair value of beneficial conversion feature of debt converted		(2,727,482	)
Change in derivative liability during the period		13,759,482
Derivative liability balance, December 31, 2023	$	14,116,062

The significant increase in the fair value of derivative liability was mainly due to the Company’s stock price dropping from $0.001 at December 31, 2022 to $0.0001 at December 31, 2023. It reduced the strike price of the convertible notes and increased the total liabilities of the total convertible shares into common stock as of December 31, 2023.