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Derivative Liabilities | 9 Months Ended
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Sep. 30, 2022
Derivative Liabilities | Note 6 – Derivative Liabilities During 2021, the above convertible notes contained embedded conversion options with a conversion price that could result in issuing an undeterminable amount of future common stock to settle the host contract. Accordingly, the embedded conversion option is required to be bifurcated from the host instrument (convertible note) and treated as a liability, which is calculated at fair value, and marked to market at each reporting period. The Company used the binomial pricing model to estimate the fair value of its embedded conversion option liabilities with the following inputs: Schedule of Weighted Average Assumptions
|  | December 31, 2021
Expected term (years) |  |  | 0.20 - 1 year
Expected volatility |  |  | 143% - 291%
Expected dividends |  |  | 0%
Risk free interest rate |  |  | 0.03% - 0.09%
A reconciliation of the beginning and ending balances for the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows at December 31, 2021: Summary of Changes in Fair Value
Derivative liability - December 31, 2020 |  | $ | 1,357,528 |
Fair value at commitment date |  |  | 1,877,250 |
Fair value mark to market adjustment |  |  | (1,806,763 | )
Gain on derivative liability upon related debt settled |  |  | (1,428,015 | )
Derivative liability - December 31, 2021 |  | $ | - |
SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2022 (UNAUDITED) Changes in fair value of derivative liabilities are included in other income (expense) in the accompanying consolidated statements of operations. During the three months ended September 30, 2022 and 2021, the Company recorded a change in fair of derivative liabilities of $0 and $202,784, respectively. These amounts reflect a mark to market adjustment recorded to the accompanying consolidated statements of operations. During the nine months ended September 30, 2022 and 2021, the Company recorded a change in fair of derivative liabilities of $0 and $746,896, respectively. These amounts reflect a mark to market adjustment recorded to the accompanying consolidated statements of operations. In connection with bifurcating the embedded conversion option and accounting for this instrument at fair value, the Company computed a fair value on the commitment date, and upon the initial valuation of this instrument, determined that the fair value of the liability exceeded the proceeds of the debt host instrument. As a result, the Company recorded a debt discount at the maximum amount allowed (the face amount of the debt), which required the overage to be recorded as a derivative expense. For the three months years ended September 30, 2022 and 2021, the Company recorded a derivative expense of $0 and $0, respectively. For the nine months years ended September 30, 2022 and 2021, the Company recorded a derivative expense of $0 and $1,775,057, respectively. During the year ended December 31, 2021, in connection with the repayment of convertible notes which contained embedded conversion features, the related derivative liabilities ceased to exist. During the three months ended September 30, 2022 and 2021, the Company recorded a gain of $0 and $136,487, respectively, related to the settlement of convertible debt which contained an embedded conversion feature and was separately bifurcated and classified as a derivative liability. The Company has recorded these gains in the accompanying consolidated statements of operations as a component of gain on settlement of liabilities. During the nine months ended September 30, 2022 and 2021, the Company recorded a gain of $0 and $979,469, respectively. SURGEPAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2022 (UNAUDITED)

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- Definition The entire disclosure for deposit liabilities including data and tables. It may include a description of the entity's deposit liabilities, the aggregate amount of time deposits (including certificates of deposit) in denominations of $100,000 or more at the balance sheet date; the aggregate amount of any demand deposits that have been reclassified as loan balances, such as overdrafts, at the balance sheet date; deposits that are received on terms other than those in the normal course of business, the amount of accrued interest on deposit liabilities; securities, mortgage loans or other financial instruments that serve as collateral for deposits; for time deposits having a remaining term of more than one year, the aggregate amount of maturities for each of the five years following the balance sheet date; and the weighted average interest rate for all deposit liabilities held by the entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 405 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=116652737&loc=d3e64164-112818 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03.12) -URI https://asc.fasb.org/extlink&oid=126897435&loc=d3e534808-122878 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1406 -Paragraph (e) Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1406 + Details
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