FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 4: FAIR VALUE MEASUREMENTS

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The Company used Level 3 inputs for its valuation methodology for the derivative liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs:

	September 30, 2018			December 31, 2017
Annual dividend yield		-			-
Expected life (years)		.50			.75 to .50
Risk-free interest rate		1.0	%		1.0	%
Expected volatility		35-237	%		187-236	%

The change in Level 3 financial instruments is as follows:

Balance, December 31, 2016	$	104,572
Issued During the Year Ended December 31, 2017		287,829
Extinguished during the year		(102,317	)
Change in fair value recognized in operations		102,539
Balance, December 31, 2017		392,623
Issued During the Nine Months Ended September 30, 2018		-
Extinguished during the nine months ended September 30, 2018		(191,473	)
Change in fair value recognized in operations		(201,150	)
Balance, September 30, 2018	$	-

	Fair Value Measurements at
	December 31, 2017
	Using Fair Value Hierarchy
	Level 1	Level 2	Level 3
Liabilities
Embedded derivative liabilities – (Conversion Feature)				392,623
Total			$	392,623

	Fair Value Measurements at
	September 30, 2018
	Using Fair Value Hierarchy
	Level 1	Level 2	Level 3
Liabilities
Embedded derivative liabilities – (Conversion Feature)				-
Total			$	-

For the nine months ended September 30, 2018, the Company recognized a gain of $201,150 on the change in fair value of its derivative liabilities. At September 30, 2018, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 825-10.