Derivative Liabilities

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

NOTE J – DERIVATIVE LIABILITIES

The derivative liabilities at September 30, 2019 and December 31, 2018 consisted of:

	September 30, 2019 (unaudited)		December 31, 2018
Convertible Promissory Notes payable to Armada Investment Fund, LLC. Please see NOTE H - CONVERTIBLE DEBENTURES for further information	$	816,257	$	-
Convertible Promissory Notes payable to BHP Capital NY Inc. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		1,684,403		58,909
Convertible Promissory Notes payable to Crossover Capital Fund II, LLC. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		894,033		54,166
Convertible Promissory Notes payable to LG Capital Funding, LLC. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		795,777		54,808
Convertible Promissory Note payable to Fourth Man, LLC. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		245,422		-
Convertible Promissory Note payable to Cicero Consulting Group, LLC. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		60,602		3,310
Convertible Promissory Note payable to Michelle Pannoni. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		219,681		24,885
Convertible Promissory Note payable to Christine Casale. Please see NOTE H - CONVERTIBLE DEBENTURES for further information		1,045		2,027
Total derivative liability	$	4,717,220	$	198,105

The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Note H in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the nine months ended September 30, 2019 and 2018, the Company recorded a loss on the change in fair value of derivative liability of $4,477,785 and $5,087, respectively. As of September 30, 2019 and December 31, 2018, the Company had derivative liabilities of $4,717,220 and $198,105, respectively.

The following inputs and assumptions were used to value the derivative liabilities of the convertible debentures outstanding during the nine months ended September 30, 2019:

●	The stock price for the valuation of the derivative instruments at September 30, 2019 was $0.0069 per share of common stock.
●	The debtholder would automatically convert note at maturity if the registration was effective and the Company is not in default;
●	The projected annual volatility for each valuation period based on the historic volatility of the Company 97.2% - 689%;
●	The debtholder would redeem (with penalties of 0% to 50% depending on the date and full-partial redemption) based on availability of alternative financing of 95%;
●	Capital raising events of $100,000 would occur in each quarter at 75% of market generating dilutive reset events at prices below $0.015 (rounded) for the convertible debentures.

The following inputs and assumptions were used to value the convertible debentures outstanding during the year ended December 31, 2018:

●	The stock price for the valuation of the derivative instruments at December 31, 2018 was $0.0040 per share of common stock.
●	The debtholder would automatically convert note at maturity if the registration was effective and the Company is not in default.
●	The projected annual volatility for each valuation period based on the historic volatility of the Company 273.8% - 485.4%
●	The debtholder would redeem (with penalties of 0% to 50% depending on the date and full-partial redemption) based on availability of alternative financing of 95%.
●	Capital raising events of $100,000 would occur in each quarter at 75% of market generating dilutive reset events at prices below $0.015 (rounded) for the convertible debentures.

STEALTH TECHNOLOGIES, INC. 10-Q