Derivative Liability
 6 Months Ended
Jun. 30, 2017
Derivative Liability [Abstract]  
DERIVATIVE LIABILITY

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 June 30, 2017:

 

Stock price $0.0013 
Risk free rate  1.24%
Volatility  670%
Conversion price $0.0005–0.0012 
Dividend rate  0%
Term (years)  0.01 to 0.71 

 

The following table represents the Company’s derivative liability activity for the period ended June 30, 2017:

 

Derivative liability balance, December 31, 2016 $1,559,428 
Issuance of derivative liability during the period ended June 30, 2017  743,375 
Underlying security converted into common stock  (151,154)
Change in derivative liability during the period ended June 30, 2017  (1,382,550)
Derivative liability balance, June 30, 2017 $769,099