NOTE 6. DERIVATIVE LIABILITY |
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||
| NOTE 6. DERIVATIVE LIABILITY |
The Company determined approximately 15,643,398 stock options for common shares that were granted and a note convertible into 15,646,982 common shares during the year ended December 31, 2016 were in excess of the Companys authorized shares amount of 100,000,000 which carry an embedded derivative and are therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. Utilizing Level 1 Inputs, the Company recorded fair market value adjustments related to stock options for shares that were granted over the Companys 100,000,000 authorized shares amount for year ended December 31, 2016 and December 31, 2015 of $180,038 and none, respectively. The fair market value adjustments were calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 0.23% - 0.85%, dividend yield of 0%, expected life of 1 year, volatility between 256% - 375%.
A summary of the activity of the derivative liability is shown below:
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