5. Related Parties Notes Payable	12 Months Ended
Dec. 31, 2016
Notes
5. Related Parties Notes Payable	5. Related Parties Notes Payable On December 9, 2014, the Company executed two promissory notes payable to directors, Eric Jones and Jim Collord. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier. The original notes were convertible and contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount. On July 1, 2015, these notes were extended to December 31, 2015. As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month. The extension contained a conversion feature. The note holders could convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015. During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively. On December 31, 2015, the due date, these notes were extended to April 11, 2016. In connection with this extension, the accrued interest balances of $30,000 was added to the principal balances resulting in a new outstanding principal balance of $171,076. Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated. These notes were extended to December 31, 2016. On January 18, 2016, the Company initiated a private offering for an aggregate 6,700,000 shares of common stock. In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each of their related notes payables for a total of 1 million shares. On November 15, 2016, Jim Collord exchanged an additional $2,000 to exercise warrants and received 20,000 shares of common stock. On July 8, 2016, the Company executed two new promissory notes payable to Eric Jones and Jim Collord. The amount of the notes was $15,000 and $10,000, respectively, for a total of $25,000. The terms of these notes are a 2% interest rate accrued per month for a term of two months. During the year ended December 31, 2016, the Company paid $17,500 on Mr. Jones’ outstanding note balance. At December 31, 2016, the notes payable balances were $56,768 and $69,808 for Mr. Jones and Mr. Collord, respectively. Also at December 31, 2016, accrued interest payable balances were $8,516 and $9,207 for Mr. Jones and Mr. Collord, respectively. These notes originally had a term of two months but were extended to December 31, 2016, and subsequently extended again to December 31, 2017.

5. Related Parties Notes Payable

12 Months Ended

Dec. 31, 2016

5. Related Parties Notes Payable

On December 9, 2014, the Company executed two promissory notes payable to directors, Eric Jones and Jim Collord. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier.

The original notes were convertible and contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount.

On July 1, 2015, these notes were extended to December 31, 2015. As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month.

The extension contained a conversion feature. The note holders could convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015.

During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively. On December 31, 2015, the due date, these notes were extended to April 11, 2016. In connection with this extension, the accrued interest balances of $30,000 was added to the principal balances resulting in a new outstanding principal balance of $171,076. Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated. These notes were extended to December 31, 2016.

On January 18, 2016, the Company initiated a private offering for an aggregate 6,700,000 shares of common stock. In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each of their related notes payables for a total of 1 million shares. On November 15, 2016, Jim Collord exchanged an additional $2,000 to exercise warrants and received 20,000 shares of common stock.

On July 8, 2016, the Company executed two new promissory notes payable to Eric Jones and Jim Collord. The amount of the notes was $15,000 and $10,000, respectively, for a total of $25,000. The terms of these notes are a 2% interest rate accrued per month for a term of two months.

During the year ended December 31, 2016, the Company paid $17,500 on Mr. Jones’ outstanding note balance.

At December 31, 2016, the notes payable balances were $56,768 and $69,808 for Mr. Jones and Mr. Collord, respectively. Also at December 31, 2016, accrued interest payable balances were $8,516 and $9,207 for Mr. Jones and Mr. Collord, respectively. These notes originally had a term of two months but were extended to December 31, 2016, and subsequently extended again to December 31, 2017.