Convertible Notes Payable

9 Months Ended

Nov. 30, 2017

Debt Disclosure [Abstract]

Convertible Notes Payable

NOTE 7 – CONVERTIBLE NOTES PAYABLE

The following table summarizes the convertible notes as of November 30, 2017:

Note #		Date	Maturity Date	Convertible Date	Interest			Balance February 28, 2017			Additions		Conversions			Balance November 30, 2017
	1	7/7/2016	7/7/2017	1/7/2017		10	%	$	29,482				$	(29,482	)	$	-
	2	8/15/2016	8/15/2017	2/15/2017		10	%		33,500					(33,500	)		-
	3	9/28/2016	9/28/2017	3/28/2017		10	%		73,500			(1) 6,000		(52,248	)		27,252
	4	10/20/2016	10/20/2017	4/18/2017		0	%		60,000					(60,000	)		-
	5	10/28/2016	7/28/2017	4/26/2017		10	%		78,750					(46,212	)		32,538
	6	2/22/2017	11/30/2017	6/21/2017		10	%		58,000					(58,000	)		-
	7	3/15/2017	3/15/2018	9/11/2017		10	%					37,000		(36,848	)		152
	8	3/28/2017	3/28/2018	9/24/17		8	%					45,850		(3,218	)		42,632
	9	4/10/2017	1/15/2018	10/7/2017		10	%					38,000		(10,535	)		27,465
	10	5/16/2017	2/25/2018	11/12/2017		10	%					53,000		-			53,000
	11	7/11/2017	demand	1/12/2018		10	%					11,000		-			11,000
	12	8/3/2017	8/3/2018	1/30/2017		10	%					28,500					28,500
								$	333,232		$	219,350	$	(330,043	)	$	222,539
				Less Debt Discount:					(73,251	)							(90,185	)
								$	259,981							$	283,944

(1) $6,000 added to principle for fees related to conversions.

These notes become convertible six months after the dates of agreement at a variable conversion price.

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion features.

Convertible note holders have the option to convert the note plus accrued interest into shares of the Company’s common stock after six months, at a certain discount of the average of the lowest trading prices for the previous 20 days prior to the conversion date. The Company determined the embedded conversion feature as a derivative liability, and recorded at fair value as of November 30, 2017. For certain notes a $500 to $1,000 fee for costs associated with converting and clearing stock is added to the amount being converted with an adjustment to the conversion price.

A summary of the activity of the derivative liability for the period ended November 30, 2017 is as follows:

Balance at February 28, 2017	$	112,461
Derivative discount		397,000
Increase to derivative due to new issuance		566,925
Decrease in derivative due to conversion of debt		(1,004,574	)
Derivative loss due to mark to market adjustment		224,311
Balance at November 30, 2017	$	296,123

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liabilities that are categorized within Level 3 of the fair value hierarchy for the quarter ended November 30, 2017 is as follows:

Date of valuation	November 30, 2017		Inception
Volatility	365% - 416	%	247% - 351	%
Risk-free rate	.92% - 1.27	%	.61% - 1.01	%
Years to maturity	.25 –.33		.25 - .5

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at November 30, 2017.

	Fair value measured at November 30, 2017
	Fair value at November 30, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liabilities	$	296,123	$	-	$	-	$	296,123