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Derivative Liabilities

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

Note 8. Derivative Liabilities

Milestone II Convertible Notes (Note 7) 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. The change in fair value was recorded in the accompanying consolidated statements of operations.

On May 26, 2021, the Milestone II Convertible Notes were settled. Upon extinguishment, the derivative liability was revalued to $25,000, which resulted in a gain of $16,000 for the year ended December 31, 2021.

The fair value of the derivative liabilities for Milestone II Convertible Notes was calculated using the Black-Scholes model using the following assumptions:

Schedule of Fair Value of 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			-				-

The following table provides a reconciliation of the beginning and ending balances for the Company’s derivative liabilities measured at fair value on a recurring basis using Level 3 inputs:

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

Fair value, December 31, 2020		$	41,000
Extinguishment of derivative upon debt settlement			(25,000	)
Net gain from change in fair value			(16,000	)
Fair value, December 31, 2021		$	-

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- References

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- 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 https://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 https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008

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