Convertible Promissory Note Derivative Liabilities

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Convertible Promissory Note Derivative Liabilities

NOTE 7 - CONVERTIBLE PROMISSORY NOTE DERIVATIVE LIABILITIES

The Convertible Promissory Notes with Power Up Lending Group Ltd. and Redstart Holdings Corp. with issue dates of July 13, 2020, September 11, 2020 and February 23, 2021 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 on December 31, 2020, February 23, 2021 and March 31, 2021 using the binomial model.

The inputs into the binomial models are as follows:

	December 31, 2020			February 23, 2021			March 31, 2021
Closing share price	$	0.0031		$	0.0068		$	0.0027
Conversion price	$	0.0019		$	0.0037		$	0.0018
Risk free rate		0.09% to 0.10%			0.13	%		0.12	%
Expected volatility		228% to 284%			276	%		273	%
Dividend yield		0	%		0	%		0	%
Expected life		0.53 to 1.19 years			1.5 years			1.4 years

The fair value of the convertible promissory note derivative liability relating to the Notes issued to Power Up Lending Group Ltd. and Redstart Holdings Corp. on July 13, 2020, September 11, 2020 and February 23, 2021 was $211,380 (December 31, 2020 - $172,261), of which $150,000 was recorded as a debt discount and the remainder of $112,116 was recorded as initial derivative expense. During the three months ended March 31, 2021, the convertible promissory note derivative liability was reduced by $154,384 for settlement of derivative liabilities due to conversion of the Notes into common stock by the Holders. The decrease in the fair value of the conversion option derivative liability of $68,613 is recorded as a gain in the condensed consolidated statements of operations for the three months ended March 31, 2021.