Convertible Debt - Related Parties

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Convertible Debt - Related Parties

NOTE 5: CONVERTIBLE DEBT – RELATED PARTIES

In connection with the reverse merger in July 2017, the Company and two stockholders, who had provided related party advances to the Company, agreed to exchange their related party advances for 6% Convertible Promissory Notes that were originally due on January 15, 2018 (the “Notes”) in the amount of $68,077. From August 2017 through November 2017, the Company issued additional notes in the principal amount of $100,000. In January 2018, the holders of the Notes agreed to extend the maturity to April 30, 2018, and in April 2018, agreed to further extend the maturity of certain notes to June or July 2018. The notes are currently in default. The Notes bear simple interest at 6% unless the Company defaults, which increases the interest rate to 10%. The Holders, at their option, can elect to convert the principal plus any accrued interest, into shares of the Company’s common stock at a conversion rate equal to eighty percent (80%) of the average closing share price as quoted on the OTC Markets for the five (5) trading days prior to the date of conversion. During the six months ended June 30, 2018, the Company received additional proceeds from a related party of $40,000 pursuant to a convertible note payable issued in April 2018, with the same interest rate and conversion terms as the Notes described above, and maturing on September 30, 2018. Because the Notes are convertible into a variable number of shares of common stock based on a fixed dollar amount, in accordance with ASC Topic 480, the notes are recorded at the fair value of the shares issuable upon conversion. The excess of the fair value of shares issuable over the face value of the Notes is recorded as a discount to the noted to be amortized in to interest expense over the term of the note. The following summarizes the carrying value of convertible debt as of June 30, 2018 and December 31, 2017:

	2018			2017
Face value of the notes	$	208,077		$	168,077
Excess of the fair value of shares issuable over the face value of the Notes		52,019			42,007
Unamortized discount		(5,055	)		(10,127	)
	$	255,041		$	199,957