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NOTE 7 – DERIVATIVE LIABILITY | 6 Months Ended
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Jun. 30, 2021
Note 7 Derivative Liability |
NOTE 7 – DERIVATIVE LIABILITY | NOTE 7 – DERIVATIVE LIABILITY The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. Fair Value Assumptions Used in Accounting for Derivative Liabilities ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2021. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. For the six months ended June 30, 2021 and the year ended December 31, 2020, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|  |  | Six months Ended |  |  |  | Year ended
|  |  | June 30, |  |  |  | December 31,
|  |  | 2021 |  |  |  | 2020
Expected term |  |  | 0.16 - 1.18 years |  |  |  | 0.02 - 6.00 years
Expected average volatility |  |  | 145% - 241% |  |  |  | 74% - 550%
Expected dividend yield |  |  | — |  |  |  | —
Risk-free interest rate |  |  | 0.07% - 0.09% |  |  |  | 0.05% - 2.56%
The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2021:
Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - December 31, 2020 |  | $ | 1,025,691
Settled on issuance of common stock |  |  | (708,611)
Change in fair value of the derivative |  |  | (317,080)
Balance - June 30, 2021 |  | $ | —
The following table summarizes the change in fair value of derivative liability included in the income statement for the six months ended June 30, 2021 and 2020, respectively.
|  | Six months Ended
|  | June 30,
|  | 2021 |  | 2020
Addition of new derivatives recognized as loss on derivatives |  | $ | — |  |  | $ | 94,891
Revaluation of derivative liabilities |  |  | (317,080 | ) |  |  | (349,139)
(Gain) on change in fair value of the derivative |  | $ | (317,080 | ) |  | $ | (254,248)

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- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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