Derivative Liabilities

12 Months Ended

Dec. 31, 2020

Derivative Liabilities

Derivative Liabilities

10.  DERIVATIVE LIABILITIES

During the prior year, the Company determined that the convertible notes outstanding as of December 31, 2019 contained embedded derivative instruments as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40. During the quarter ended June 30, 2020, all convertible notes that contained embedded derivative instruments were converted, leaving a derivative liability balance of zero. As of December 31, 2020, the Company had a single convertible note (see footnote 8), which is convertible at a fixed price and therefore does not contain an embedded derivative.

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model. The balance of the fair value of the re as of December 31, 2020 and December 31, 2019 is as follows:

Balance at December 31, 2019	$	342,850
Additions due to new convertible notes		127,273
Reduction due to conversions and adjustments		(339,105	)
Mark-to-market adjustment		(131,018	)
Balance at December 31, 2020	$	—

During the year ended December 31, 2020 and 2019, the Company incurred losses of $0 and $0, respectively, on the conversion of convertible notes. In connection with the convertible notes, for the year ended December 31, 2020 and 2019, the Company recorded $37,787 and $31,168, respectively, of interest expense and $270,607 and $387,124 respectively, of debt discount amortization expense. As of December 31, 2020, and 2019, the Company had approximately zero and $57,964, respectively, of accrued interest related to the convertible notes that contained embedded derivative.