Convertible Note Payable

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Convertible Note Payable

NOTE 4 - CONVERTIBLE NOTE PAYABLE

Convertible notes payable consists of the following as of June 30, 2018 and December 31, 2016:

	2018		2017
Total convertible notes payable		67,393		214,764
Less discounts		-		(42,534	)
Convertible notes net of discount	$	67,393	$	172,230

The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 “Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model.

The following table presents details of the Company’s derivative liabilities associated with its convertible notes as of June 30, 2018 and December 31, 2017:

	Amount
Balance December 31, 2017	$	319,041
Adjustment to derivative liability due to debt conversion		(142,973	)
Change in fair market value of derivative liabilities		(100,109	)
Balance June 30, 2018	$	75,959

During the three months ended March 31, 2018, the Company issued 647,458 shares of common stock with a fair value of $54,631 for the partial conversion of convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair values on the date of conversion of 866,361. The conversion of the derivative liabilities has been recorded through additional paid-in capital.

The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note and at March 31, 2018:

Fair value assumptions – derivative notes:	June 30, 2018
Risk free interest rate		1.27-1.63	%
Expected term (years)		0.01-0.01
Expected volatility		397	%
Expected dividends		0	%

Settlement Agreements

During the six months ended June 30, 2018, the Company entered into certain cancellation agreements with the holder of a certain notes payable in the amounting to $96,721, including accrued interest issued from December 10, 2015 through August 27, 2017. The face value of the canceled debt of $96,721 has been recorded as a gain on settlement of notes payable as of June 30, 2018.