Derivative Liabilities

3 Months Ended

Mar. 31, 2021

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.

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 derivative liability as of March 31, 2020 and December 31, 2020 is as follows:

Balance at December 31, 2020	$	—
Additions due to new convertible notes		—
Reduction due to conversions and adjustments		—
Mark-to-market adjustment		—
Balance at March 31, 2021	$	—

During the three months ended March 31, 2021 and 2020, the Company incurred losses of $0 and $0, respectively, on the conversion of convertible notes. In connection with the convertible notes, for the three months ended March 31, 2021 and 2020, the Company recorded $329 and $9,295, respectively, of interest expense and zero and $103,674, respectively, of debt discount amortization expense. As of March 31, 2021, and December 31, 2020, the Company had zero and zero, respectively, of accrued interest related to the convertible notes that contained embedded derivative.