. Derivative Liabilities

March 23, 2020

notes payable in the principal amount of

$100,000

were issued as convertible debt and qualified as derivative liabilities. As of

September 30, 2020

the aggregate fair value of the outstanding derivative liability for these notes using the Black-Scholes option pricing model used the following key assumptions:

Volatility	76	%
Risk-free interest rate	0.11	%
Expected dividends	-
Expected term (in years)	.5

The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following

three

levels of inputs

may

be used to measure fair value:

Level

inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

Level

inputs utilize other-than-quoted prices that are observable, either directly or indirectly and include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and

Level

inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.

The following table presents the Company's liabilities that were measured and recognized at fair value as of

September 30, 2020:

	Level 1		Level 2		Level 3
Balance January 1, 2019		-		-		-
Additions		-		-	$	1,321,764
Change in Fair Value		-		-		83,766
Balance at December 31, 2019	$	-	$	-	$	1,405,530
Additions		-		-		317,776
Amendments						(224,066	)
Retirements						(522,065	)
Change in Fair Value						(942,176	)
Balance at June 30, 2020	$		$		$	34,999