Note 7 - Derivative Liability

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Disclosure of Credit Derivatives [Table Text Block]

NOTE

7

– DERIVATIVE LIABILITY

As discussed in Note

1,

on a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company's liabilities measured at fair value as of

March 31, 2020

and

December 31, 2019:

	Level 1		Level 2		Level 3		Fair Value at March 31, 2020
Liabilities:
Derivative liability	$	-	$	-	$	26,240	$	26,240

	Level 1		Level 2		Level 3		Fair Value at December 31, 2019
Liabilities:
Derivative liability	$	-	$	-	$	65,289	$	65,289

Utilizing Level

3

Inputs, the Company recorded fair market value adjustments related to convertible credit line payable for the

three

months ended

March 31, 2020

and

2019

of

$39,049

and

$449,133,

respectively. The fair market value adjustments as of

March 31, 2020

and

2019

were calculated utilizing the Black-Scholes option pricing model using the following assumptions: exercise price of

$1.00

,

computed volatility of

54%

and

162%

and discount rate of

0.17%

and

2.27,

respectively.

A summary of the activity of the derivative liability is shown below at

March 31, 2020:

Balance at December 31, 2019	$	65,289
Gain on change in derivative fair value adjustment		(39,049	)
Balance at March 31, 2020	$	26,240