Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies: Fair Value Measurement, Policy (Policies)

12 Months Ended

Dec. 31, 2019

Policies

Fair Value Measurement, Policy

Fair Value Measurements

The Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.

Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.

Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.

The Company’s financial instruments consist of cash, prepaid expenses, inventory, accounts payable, convertible notes payable, advances from related parties, and derivative liabilities. The estimated fair value of cash, prepaid expenses, investments, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.

The Company’s derivative liabilities have been valued as Level 3 instruments.

	Level 1		Level 2		Level 3		Total
Fair value of convertible notes derivative liability – December 31, 2019	$	–	$	–	$	729,308	$	729,308

	Level 1		Level 2		Level 3		Total
Fair value of convertible notes derivative liability – December 31, 2018	$	–	$	–	$	372,151	$	372,151

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2019 and 2018:

	Derivative
	Liability
Balance, December 31, 2017	$           309,487
Additions recognized as debt discount	362,262
Note Conversions	613,781
Mark-to-market at December 31, 2018	314,183
Balance, December 31, 2018	$           372,151

	Derivative
	Liability
Balance, December 31, 2018	$                372,151
Additions recognized as debt discount	634,378
Note Conversions	(678,089)
Mark-to-market at December 31, 2019	400,868
Balance, December 31, 2019	$                729,308