FAIR VALUE ESTIMATES

9 Months Ended

Sep. 30, 2020

NOTE 5 — FAIR VALUE ESTIMATES

The Company measures financial instruments at fair value in accordance with ASC 820, which specifies a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions.

Management believes the carrying amounts of the Company's cash, other receivables, accounts payable and accrued liabilities as of September 30, 2020 and December 31, 2019 approximate their respective fair values because of the short-term nature of these instruments. The Company measures its notes payable and loans in accordance with the hierarchy of fair value based on whether the inputs to those valuation techniques are observable or unobservable. The hierarchy is:

Level 1 - Quoted prices for identical instruments in active markets;

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The estimated fair value of the cash, notes payable, and loans at September 30, 2020 and December 31, 2019, were as follows:

		Quoted Prices In Active Markets for Identical Assets	Significant Other Observable Inputs		Significant Unobservable Inputs
		(Level 1)	(Level 2)		(Level 3)		Carrying Value
At September 30, 2020:
Assets
Cash	$	31,212	—		—	$	31,212

Liabilities
8% Senior Secured Convertible Promissory Note, Net		—	—	$	718,166	$	718,166
8% Senior Secured Convertible Promissory Note issued December 2, 2019		—	—	$	121,691	$	121,691
Loan from MAAB		—	—	$	1,049,277	$	1,049,277

At December 31, 2019:
Assets
Cash	$	1,159	—		—	$	1,159

Liabilities
8% Senior Secured Convertible Promissory Note, Net		—	—	$	983,524	$	983,524
8% Senior Secured Convertible Promissory Note issued December 2, 2019		—	—	$	149,546	$	149,546
Loan from MAAB		—	—	$	750,017	$	750,017

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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