| 9. |
Derivative Liability |
|
Due to the variable conversion price
associated with some of these convertible promissory notes disclosed in Note 8 above, the Company has determined that the conversion
feature is considered a derivative liability for instruments which are convertible and have not yet been settled. The accounting treatment
of derivative financial instruments requires that the Company record the fair value of the derivatives on the date they are deemed to
be derivative liabilities.
|
| |
|
|
Below is a reconciliation of the derivative liability as presented on the Company’s balance sheet as of June 30, 2021 and December 31, 2021: |
| Derivative liability as of June 30, 2020 |
|
$ |
1,590,638 |
|
| Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021 |
|
|
512,993 |
|
| True-up adjustment in debt discount and derivative liability |
|
|
37,360 |
|
| Change in derivative liability during the period |
|
|
(853,329 |
) |
| Notes retired due to refinancing |
|
|
(1,287,662 |
) |
| Derivative liability as of June 30, 2021 |
|
$ |
- |
|
| Change |
|
|
- |
|
| Balance at December 31, 2021 |
|
$ |
- |
|
Change in derivative liability for the six months
ended December 31, 2021 and 2020, totaled $0 and $264,818, respectively and change in derivative liability for the three months ended
December 31, 2021 and 2020, totaled $0 and $57,294, respectively.
As of December 31, 2021, and June 30, 2021, the derivative liability
related to convertible notes was $0 and $0, respectively.
|