NOTE 2. SELECTED ACCOUNTING POLICIES: Valuation of Derivative Instruments (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Valuation of Derivative Instruments

Valuation of Derivative Instruments

ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts, and recognizes a net gain or loss on debt extinguishment.

Management used the following inputs to value the Derivative Liabilities for the six months ended June 30, 2021:

	June 30, 2021 Derivative Liability
Expected term	1 year to 21 months
Exercise price	$0.00077-$0.00078
Expected volatility	248% to 272%
Expected dividends	None
Risk-free rate	0.07% to 0.25%