DERIVATIVE LIABILITY

9 Months Ended

Sep. 30, 2019

Derivative Liability- Debt

The fair value of the described embedded derivative on all convertible debt was valued at $3,836,085 and $2,215,376 at September 30, 2019 and December 31, 2018, respectively, which was determined using the Black Scholes Pricing Model with the following assumptions:

Dividend yield:		0	%
Term	0.5 – 1.0 year
Volatility	114.3%–132.8		%
Risk free rate:	1.75–2.63		%

For the nine months ended September 30, 2019 and 2018, the Company adjusted the recorded fair value of the derivative liability on debt to market resulting in non-cash, non-operating loss of $1,617,074 and $31,236 for the nine months ended September 30, 2019 and 2018, respectively.

Note 2 contains a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, 2019.