DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2023

Derivative Liabilities

DERIVATIVE LIABILITIES

NOTE 9 – DERIVATIVE LIABILITIES

The Convertible Notes payable include a conversion feature that pursuant ASC 815 “Derivatives and Hedging”, has been identified as an embedded derivative financial instrument and which the Company accounts for under the fair value method of accounting. In additions, certain warrants issued by the Company also meet the criteria that requires them to be accounted for as derivative liabilities.

Certain convertible notes payable convert at a discount to the market price of common stock. In addition, for many of these notes the exercise price of the embedded conversion feature are adjustable based upon issuances of other securities with lower purchase price. As a result, management has deemed that these embedded conversion features meet the requirements to be accounted as derivatives. The debt is convertible at range of 75% to 50% of the fair value of the Company’s common stock requiring the conversion feature to be bifurcated from the host debt contract and accounting for separately as a derivative, resulting in periodic revaluations. The notes underlying the derivatives are short term in nature and generally converted to stock in less than one year. The derivative is valued at period end with the key inputs being current stock price and the conversion feature.

The derivative liabilities amounted to $3,614,677 and $1,961,846 as of June 30, 2023 and 2022, respectively.

Derivative liabilities for the six months ended was as follows:

	For the Six Months Ended
	June 30, 2023			June 30, 2022
Balance, December 31	$	2,689,982		$	1,698,272
Additions		960,834			315,669
Conversions		(322,769	)		(442,164	)
Change in fair value		286,630			390,069
Balance, June 30	$	3,614,677		$	1,961,846