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Derivatives

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Note 17 – Derivatives

The Company has incurred a liability for the estimated fair value of a derivative warrant instrument. The estimated fair value of the derivative warrant instruments has been calculated using the Black-Scholes fair value option-pricing model with key input variables provided by management, as of the issue date, with the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded as gains or losses on revaluation in non-operating income (expense).

The Company identified embedded derivatives related to the warrants issued along with loan payable entered into in November 2015. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the warrants and to adjust the fair value as of each subsequent balance sheet date. At the inception of the warrants, the Company determined a fair value of $2,067,258 of the embedded derivative. The fair value of the embedded derivative was determined using the Black-Scholes Model based on the following assumptions:

	November 12, 2015
Risk-free interest rate		2.32	%
Expected remaining term		10 Years
Expected volatility		157.56	%
Dividend yield		0	%

The initial fair values of the embedded derivative of $2,067,258 was allocated as a debt discount $2,067,258.

During the year ended December 31, 2016, the decrease in the fair value of the warrant derivative liability of $1,380,600 was recorded as a gain on change in fair value of derivative liability.

During December 2016, the Company cancelled these warrants and issued 7,500,000 shares of common stock and accordingly warrant derivative liability was extinguished.

Fair value at December 23, 2016 when the warrants were cancelled was estimated to be $1,715,579, based on the following assumptions:

	December 23, 2016
Risk-free interest rate		2.55	%
Expected remaining term		8.92 Years
Expected volatility		143.15	%
Dividend yield		0	%

The following table summarizes the derivative liabilities included in the balance sheet at December 31, 2016:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance - December 31, 2015	$	3,096,179
Extinguishment of derivatives liabilities from cancellation of warrants		(1,715,579	)
Gain on change in fair value of the derivative liabilities		(1,380,600	)
Balance – December 31, 2016	$	-