Derivative Liability

12 Months Ended

Dec. 31, 2017

NOTE 5 – DERIVATIVE LIABILITY

The convertible notes discussed in Note 3 have a conversion price that is variable based on a percentage of the Company’s stock price which results in this embedded conversion feature being recorded as a derivative liability.

The fair value of the derivative liability is recorded and shown separately under current liabilities. Changes in the fair value of the derivative liability is recorded in the statement of operations under other income (expense).

The Company uses a weighted average Black-Scholes-Merton option-pricing model with the following assumptions to measure the fair value of derivative liability at December 31, 2017 and 2016:

	2017			2016
Stock price	$	0.0001		$	0.92
Risk free rate		1.24	%		0.85	%
Volatility		670	%		670	%
Conversion price	$	0.00005–0.00009		$	0.038-.083
Dividend rate		0	%		0	%
Term (years)		0.01 to 0.86			0.01 to 0.73

The following table represents the Company’s derivative liability activity for the two year periods ended December 31, 2017:

Derivative liability balance, December 31, 2015	$	50,276
Issuance of derivative liability during the period ended December 31, 2016		486,216
Underlying security converted into common stock		(188,349	)
Change in derivative liability during the period ended December 31, 2016		1,211,285
Derivative liability balance, December 31, 2016		1,559,428
Issuance of derivative liability during the period		885,707
Underlying security converted into common stock		(453,417	)
Change in derivative liability during the period		(1,532,965	)
Derivative liability balance, December 31, 2017	$	458,753