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Convertible Notes and Derivative Liability (Related and Unrelated Party)
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Convertible Notes and Derivative Liability (Related and Unrelated Party)

Note 4. Convertible Notes and Derivative Liability (Related and Unrelated Party)

 

In 2018, the Company issued Milestone I and Milestone II Convertible Notes, which were repaid and converted in the second quarter of 2021.

 

The Milestone II Convertible Notes contained variable conversion provisions based on the future price of the Company’s common stock, resulting in the potential issuance of an indeterminate number of shares of common stock upon conversion. The Company measured the fair value of the derivative resulting from the variable conversion provisions each reporting period.

 

Upon debt extinguishment the Company’s derivative liability was revalued at approximately $25,000, resulting in a gain of approximately $16,000 for the nine months ended September 30, 2021. The derivative value of $25,000 was included in the determining the loss on debt extinguishment.