XML 22 R13.htm IDEA: XBRL DOCUMENT v3.21.2

Derivative Liabilities

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

Note 8. Derivative Liabilities

As discussed in Note 7, Convertible Notes, the Company had $168,000 of principal outstanding in CN Notes 2 that contained variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued was based on the future price of the Company’s common stock, therefore the number of shares of common stock issuable upon conversion of the promissory note is indeterminate. The Company fair valued the variable conversion provisions each reporting period. The fair value was reported as a derivative liability in the accompanying consolidated balance sheets and the change in value was recorded as a gain or loss in the accompanying consolidated statements of operations.

The fair values of the Company’s derivative liabilities are estimated at the issuance date and are revalued at each subsequent reporting date. As of June 30, 2021, the Convertible Noteholders discussed in Note 7 were settled. Upon debt extinguishment the Company’s derivative liability was revalued at May 26, 2021 with value of $25,170, which resulted in a loss of $483 for the three months ended June 30, 2021, and a gain of $16,305 for the six months ended June 30, 2021.

Barfresh Food Group Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2021

(Unaudited)

The fair value of the derivative liabilities for CN Notes 2 was calculated using the Black-Scholes model using the following assumptions.

Schedule of Fair Value of the Derivative Liability 

		26-May-21				31-Dec-20
Expected life			0.46				0.92
Volatility (based on comparable company)			101.32	%			120.38	%
Risk Free interest rate			0.04	%			0.1	%
Dividend yield (on common stock)			-				-

Reconciliation of the derivative liability measured at fair value on a recurring basis with the use of significant unobservable inputs (level 3) from December 31, 2020 to June 30, 2021:

Schedule of Derivative Liability Measured at Fair Value on a Recurring Basis 

			Jun. 30, 2021
December 31, 2020		$	41,475
Net gain from change in value			(16,305	)
Extinguishment change in derivative from debt settlement			(25,170	)
June 30, 2021		$	-

The following table presents the Company’s fair value hierarchy for applicable assets and liabilities measured at fair value as of December 31, 2020 and June 30, 2021:

Schedule of Fair Value Hierarchy of Assets and Liabilities 

		Level 1				Level 2				Level 3				Total
Derivative Liability December 31, 2020		$	-				-				41,475			$	41,475

Level 1

Level 2

Level 3

Total

Derivative Liability June 30, 2021

$

-

-

-

$

-

X

- References

No definition available.

+ Details

Name:	us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI http://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008

+ Details

Name:	us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration