Annual report pursuant to Section 13 and 15(d)

Derivative Liabilities

Derivative Liabilities
12 Months Ended
Dec. 31, 2019
Derivative Liability [Abstract]  
Derivative Liabilities



As discussed above in Note 11, The Company executed a convertible note with Power Up Lending Group on September 18, 2019 and received gross proceeds of $233,000. The Company identified certain features embedded in the note requiring the Company to classify the feature as a derivative liability. The conversion price of the note are subject to adjustment for issuances of the Company’s Common Stock or any equity linked instruments or securities convertible into the Company’s Common Stock at a purchase price of less than the prevailing conversion price or exercise price. Such adjustment shall result in the conversion price and exercise price being reduced to such lower purchase price.


During the year ended December 31, 2019, the fair value of the derivative feature was calculated using the following weighted average assumptions:


    December 31, 2019  
Risk-free interest rate     1.59 – 1.87 %
Expected life of grants     1 year  
Expected volatility of underlying stock     88 - 100 %
Dividends     0 %


As of December 31, 2019, the derivative liability of the warrants was $190,846. In addition, for the year ended December 31, 2019, the Company recorded $4,013 as a gain on the change in fair value of the derivative on the statement of operations.