Convertible Promissory Note Derivative Liabilities

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Convertible Promissory Note Derivative Liabilities

NOTE 7 - CONVERTIBLE PROMISSORY NOTE DERIVATIVE LIABILITIES

The Convertible Promissory Notes with Firstfire Global Opportunities Fund, LLC, Crown Bridge Partners, LLC and Power Up Lending Group Ltd. with issue dates of March 1, 2019, January 20, 2020, February 3, 2020, April 14, 2020, July 13, 2020 and September 11, 2020, respectively, are accounted for under ASC 815.  The variable conversion price is not considered predominantly based on a fixed monetary amount settleable with a variable number of shares due to the volatility and trading volume of the Company’s common stock. The Company’s convertible promissory note derivative liabilities have been measured at fair value at December 31, 2019, January 20, 2020, February 3, 2020, April 14, 2020, July 13, 2020, September 11, 2020 and September 30, 2020 using the binomial model.

The inputs into the binomial models are as follows:

	December 31, 2019	January 20, 2020	February 3, 2020	April 14, 2020	July 13, 2020	September 11, 2020	September 30, 2020
Closing share price	$0.20	$0.18	$0.115	$0.0559	$0.0105	$0.0037	$0.0028
Conversion price	$0.0683	$0.0488	$0.0587	$0.0338	$0.0068	$0.0024	$0.0016 to $0.0017
Risk free rate	1.60%	1.57%	1.60%	2.40%	0.16%	0.13%	0.11% to 0.12%
Expected volatility	294%	351%	434%	330%	294%	270%	200% to 270%
Dividend yield	0%	0%	0%	0%	0%	0%	0%
Expected life	0.67 years	0.5 years	1.49 years	1.5 years	1.0 years	1.5 years	0.31 to 1.44 years

The fair value of the convertible promissory note derivative liability relating to the Notes issued to Power Up Lending Group Ltd. and Crown Bridge Partners, LLC on February 3, 2020, January 20, 2020, April 14, 2020, July 13, 2020 and September 11, 2020 was $573,863, of which $315,000 was recorded as a debt discount and the remainder of $258,863 was recorded as initial derivative expense. During the nine months ended September 30, 2020, the convertible promissory note derivative liability was reduced by $300,546 for settlement of derivative liabilities due to conversion of the Notes into common stock by the Holders. The decrease (increase) in the fair value of the conversion option derivative liability of $239,160 and $50,177, respectively is recorded as a gain in the consolidated statements of operations for the nine months ended September 30, 2020 and 2019, respectively. The fair value of the convertible promissory note derivative liabilities is $301,145 and $266,989 at September 30, 2020 and December 31, 2019, respectively.