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Derivative Liabilities

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

NOTE 5 - DERIVATIVE LIABILITIES

At June 30, 2020, the Company has outstanding warrants exercisable into 53,556 shares of the Company’s common stock. The strike price of warrants is denominated in US dollars, a currency other than the Company’s functional currencies, the HK$, RMB, and MYR. As a result, the warrants are not considered indexed to the Company’s own stock, and the Company characterized the fair value of the warrants as a derivative liability upon issuance. The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations.

At December 31, 2019, the balance of the derivative liabilities was $28,545. During the six months ended June 30, 2020, the Company recorded an increase in fair value of derivatives of $39,953. At June 30, 2020, the balance of the derivative liabilities was $68,498.

The derivative liabilities were valued using the Black-Scholes-Merton valuation model with the following assumptions:

	As of			As of
	June 30, 2020			December 31, 2019
		(Unaudited)
Risk-free interest rate	$	1.4	%	$	2.4	%
Expected volatility		181	%		173	%
Contractual life (in years)		3.0 years			3.4 years
Expected dividend yield		0.00	%		0.00	%
Fair Value of warrants	$	68,498		$	28,545

The risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical volatility of its common stock. The contractual life of the warrants is based on the expiration date of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future.