Note 7 - Derivative Liability

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Derivatives and Fair Value [Text Block]

NOTE 7 – DERIVATIVE LIABILITY

As discussed in Note 1, we measure certain financial assets and liabilities based upon the fair value hierarchy. The following table presents information about the Company’s financial liabilities, measured at fair value on a recurring basis, as of June 30, 2022 and December 31, 2021:

	Level 1		Level 2		Level 3		Fair Value at June 30, 2022
Liabilities:
Derivative liability	$	-	$	-	$	341,306	$	341,306

	Level 1		Level 2		Level 3		Fair Value at December 31, 2021
Liabilities:
Derivative liability	$	-	$	-	$	145,041	$	145,041

Utilizing Level 3 Inputs, the Company recorded a gain on fair market value adjustments related to convertible credit line payable and senior secured notes payable for the six months ended June 30, 2022 of $12,211. The fair market value adjustments as of June 30, 2022 were calculated utilizing the Black-Scholes option pricing model using the following assumptions: exercise price of $1.00 - $5.00, computed volatility of 247% - 274% and discount rate of 2.80% - 2.92%.

A summary of the activity of the derivative liability is shown below at June 30, 2022:

Balance at December 31, 2021	$	145,041
Debt discount on senior secured notes payable		208,476
Gain on change in derivative fair value adjustment		(12,211	)
Balance at June 30, 2022	$	341,306