Other Notes Payable

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 6. Other Notes Payable

During the year ended December 31, 2016, the Company received $150,000 related to a note payable. The note is due on demand and interest accrues at the rate of 10% per annum. During the three month period ended March 31, 2018, the Company issued 2,500,000 shares of common stock to settle the outstanding balance of $150,000 and accrued interest of $10,000. The balance was $0 and $150,000 as of March 31, 2018 and December 31, 2017, respectively.

During the year ended December 31, 2017, the Company received a total of $75,000 related to a note payable. The note had a maturity date of May 15, 2017 and interest accrues at the rate of 20% per annum and is currently in default. The Company paid $42,500 during 2017. During the three months ended March 31, 2018, the Company paid $10,000 and issued 1,000,000 shares of common stock to settle the remaining balance of $22,000. The balance was $0 and $32,500 as of March 31, 2018 and December 31, 2017, respectively.

The Company has recognized a "Liability for unissued shares" for shares granted to employees and consultants along with shares purchased by investors, but unissued as of the balance sheet date. The granted shares are recorded at the fair market value of the shares to be issued at the grant date and a corresponding current liability is recorded for these unissued shares. The activity in this account and balances, classified as Liabilities for unissued shares, as of March 31, 2018 and December 31, 2017 was as follows:

	March 31, 2018			December 31, 2017
Balance, beginning	$	211,843		$	145,543
Reclass of previous shares purchased and recorded in equity		-			66,300
Shares purchased by investors but unissued		92,000			-
Issuance of shares in satisfaction of liability		(5,000	)		-
Balance, ending	$	298,843		$	211,843

The total number of shares granted but unissued were 2,554,639 and 2,483,806, as of March 31, 2018 and December 31, 2017, respectively.