Warrant Liability

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Warrant Liability

NOTE 8 – WARRANT LIABILITY

In conjunction with the issuance of the Senior Convertible Note with Firstfire Global Opportunities Fund, LLC (the “Note”) on March 1, 2019, the Company issued 1,000,000 warrants with an exercise price of $0.20 and a term of two years. The warrants are subject to down round and other anti-dilution protections. The warrant is tainted and classified as a liability as a result of the issuance of the Note since there is a possibility during the life of the warrant the Company would not have enough authorized shares available if the warrant is exercised. The Company’s warrant liability has been measured at fair value at December 31, 2019 and April 14, 2020 using the binomial model.

The inputs into the binomial models are as follows:

	December 31, 2019			April 14, 2020
Closing share price	$	0.20		$	0.0559
Exercise price	$	0.20		$	0.20
Risk free rate		1.59	%		1.59	%
Expected volatility		338	%		310	%
Dividend yield		0	%		0	%
Expected life		1.17 years			0.88 years

The decrease (increase) in the fair value of the warrant liability of $144,059 and $1,655 is recorded as a gain (loss) in the consolidated statements of operations for the six months ended June 30, 2020 and 2019, respectively. The fair value of the warrant liability is $0 and $185,560 at June 30, 2020 and December 31, 2019, respectively.

On April 14, 2020, the Company issued 2,000,000 shares of common stock with a fair value of $111,800 to fully settle the 1,000,000 warrants issued in conjunction with the issuance of the Senior Convertible Note with Firstfire Global Opportunities Fund, LLC on March 1, 2019. The issue of the shares resulting in a loss on settlement of warrant liability of $70,299.