v3.10.0.1
CONVERTIBLE NOTES PAYABLE
6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE

NOTE 5: CONVERTIBLE NOTES PAYABLE

1 - On March 27, 2017, the Company entered into a potentially dilutive convertible advance with Crown Bridge Partners LLC. The agreement provides that the Company may borrow up to $675,000. Borrowings under the line bear interest at 8% upon maturity and include a 10% issue discount. The maturity date for each tranche funded shall be 12 months from the effective date of each tranche. As of December 31, 2017, the Company has drawn a $75,000 credit line against this facility. The advance, was payable on March 27, 2018. The note was issued at a 10% discount. The net proceeds received after issuance costs and fees was $63,750. In accordance with ASC 835-30-45, Interest, the Company records the fees, costs, and original issue discount as reduction of the carrying amount of the debt and amortizes the balances over the life of the debt instrument. Additionally, the note is convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 55% multiplied by the lowest price of the common shares for the 20 trading prior to which the Notice of Conversion is received. If at any time the market price of the Company's common stock is trading below $0.50, then an additional 10% discount shall be factored into the Conversion Price, resulting in a discount of 55%. In the event the Company fails to maintain its status as "DTC Eligible" for any reason, or if the lowest trading prices of the common stock is equal to or lower than $0.01, then an additional 5% discount shall be factored into the Conversion Price, resulting in a total discount of 60%. The conversion formula created an embedded derivative conversion feature.

The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of June 30, 2018 dividend yield of zero, 365 days term to maturity, risk free interest rate of 2.33% and annualized volatility of 34.82%, valued at $74,579 and (ii) as of December 31, 2017 dividend yield of zero, 365 day term to maturity, risk free interest rate of 1.76% and annualized volatility of 63.54%, valued at $1,679,176: The value of the conversion feature was assigned to the derivative liability and created a debt discount to be amortized over the life of the convertible debt.

During the period ended December 31, 2017, the convertible option of the debt was exercised, resulting in 635,910 shares issued for $5,656 in principal and $2,000 in accrued interest. Accrued interest related to this advance was $4,591 and $3,086 at June 30, 2018 and at December 31, 2017 respectively, and is included in accrued interest on the Balance Sheets.

Face Value balance as of June 30, 2018 is $29,344 and $69,344 as of December 31, 2017.

2 - On March 24, 2017, the Company entered into a potentially dilutive convertible advance with Eagle Equities LLC. The advance, with a face value of $75,000, bears interest at 8% per annum and is payable on March 24, 2018. The note was issued at a 10% discount. The net proceeds received after issuance costs and fees was $63,750. In accordance with ASC 835-30-45, Interest, the Company records the fees, costs, and original issue discount as reduction of the carrying amount of the debt and amortizes the balances over the life of the debt instrument. Additionally, the note is convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 55% multiplied by the lowest price of the common shares for the 20 trading prior to which the Notice of Conversion is received. In the event the Company experiences a DTC Chill on its shares, the Conversion Price shall be decreased to 45% instead of 55% while that chill is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. The conversion formula created an embedded derivative conversion feature.

The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of June 30, 2018: dividend yield of zero, 365 days term to maturity, risk free interest rate of 2.33% and annualized volatility of 34.82%, valued at $106,387 and (ii) as of December 31, 2017: dividend yield of zero, 83 days term to maturity, risk free interest rate of 1.76% and annualized volatility of 63.54%, valued at $ 1,188,270. The value of the conversion feature was assigned to the derivative liability and created a debt discount to be amortized over the life of the convertible debt.

During the period ended December 31, 2017, the convertible option of the debt was exercised, resulting in 947,100 shares issued for $15,800 in principal and $756 in accrued interest. Accrued interest related to this advance was $6,437 and $5,244 at June 30, 2018 and December 31, 2017, respectively, and is included in accrued interest on the Balance Sheets. Face Value balance was $59,200 and$ 59,200 as of December 31, 2017 and June 30, 2018 respectively.

3 - On May 30, 2017, the Company entered into a potentially dilutive convertible advance with Power Up Lending Group, LTD. The advance, with a face value of$38,000, bears interest at 12% per annum and is payable on March 5, 2018. The note was issued at a 7% discount. The net proceeds received after issuance costs and fees was $35,000. In accordance with ASC 835-30-45, Interest, the Company records the fees, costs, and original issue discount as reduction of the carrying amount of the debt and amortizes the balances over the life of the debt instrument. Additionally, the note is convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 60% multiplied by the lowest price of the common shares for the 20 trading prior to which the Notice of Conversion is received. The conversion formula created an embedded derivative conversion feature.

The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of June 30, 2018: dividend yield of zero, 35 day term to maturity, risk free interest rate of 2.33% and annualized volatility of 16.62%, valued at $6,273, and (ii) as of December 31, 2017: dividend yield of zero, 150 day term to maturity, risk free interest rate of 1.76% and annualized volatility of63.54%, valued at $553,851. The value of the conversion feature was assigned to the derivative liability and created a debt discount to be amortized over the life of the convertible debt.

During the period ended December 31, 2017, the convertible option of the debt was exercised, resulting in 545,930 shares issued for $7,955 in principal. During the period ended June 30, 2018 the convertible option of the debt was exercised, resulting in 310,902 shares issued for $48,578 in principal and $2,280 in accrued interest.

Accrued interest related to this advance was $2,686 and $2,387 at December 31, 2017 and June 30, 2018, respectively, and is included in accrued interest on the Balance Sheets. Face Value balance was $30,045 and $0 as of December 31, 2017 and June 30, 2018 respectively.

4 - On September 27, 2017, the Company entered into a potentially dilutive convertible advance with Power Up Lending Group, LLC. The advance, with a face value of $28,000, bears interest at 12% per annum and is payable on July 10, 2018. The note was issued at a 10% discount. The net proceeds received after issuance costs and fees was $25,000. In accordance with ASC 835-30-45, Interest, the Company records the fees, costs, and original issue discount as reduction of the carrying amount of the debt and amortizes the balances over the life of the debt instrument. Additionally, the note is convertible at the holder's discretion into shares of the Company's common stock based on a conversion formula of 58% multiplied by the lowest price of the common shares for the 15 trading prior to which the Notice of Conversion is received. The conversion formula created an embedded derivative conversion feature.

The Company valued this conversion feature using the Black Scholes valuation model with the following assumptions: (i) as of June 30, 2018: dividend yield of zero, 88 day term to maturity, risk free interest rate of 2.33% and annualized volatility of 17 .00%, valued at $44,537, and (ii) as of December 31, 2017: dividend yield of zero, 192 day term to maturity, risk free interest rate of 1.76% and annualized volatility of 63.54%, valued at $353,071. The value of the conversion feature was assigned to the derivative liability and created a debt discount to be amortized over the life of the convertible debt.

During the period ended December 31, 2017, the convertible option of the debt was not exercised. During the period ended June 30, 2018, the convertible option of the debt was exercised, resulting in 187,533 shares issued for $14,140 in principal. Accrued interest related to this advance was $16,549 and $875 at June 30, 2018 and December 31, 2017, respectively, and is included in accrued interest on the Balance Sheets. At June 30, 2018 and December 31, 2017, the convertible notes payable were recorded at $13,860 and $28,000, respectively.