Note 9 - Derivative Liabilities

12 Months Ended

Dec. 31, 2017

Disclosure Text Block [Abstract]

NOTE 9 - DERIVATIVE LIABILITIES

NOTE 9 – DERIVATIVE LIABILITIES

The Company evaluated the terms of the convertible debt conversion features under the applicable accounting literature, including Derivatives and Hedging, ASC 815, and determined that certain features required separate accounting as derivatives. The derivatives were recorded as "derivative liabilities" on the condensed consolidated balance sheets and will be adjusted to reflect fair value at each reporting date. The total fair value of the derivative liabilities at issuance was $125,291. The fair value of the derivative liabilities at December 31, 2017 and 2016 was $0. The Company recognized a gain of $40,972 for the year ended December 31, 2017, which is presented as "gain on derivative" on the consolidated statements of operations, and recognized a $26,843 reduction in the derivative liability related to the settlement of a convertible note payable.  The $26,843 was recorded as a credit to additional paid-in capital.

On May 9, 2017, the Company recorded a derivative liability of $75,957 on convertible debt due to the variable nature of the conversion price.  The valuation was based on the Black-Scholes model.  The Company recorded a loss on derivative of $17,957 since the value of the derivative was greater than the proceeds from the convertible note.  As of September 30, 2017, the derivative liability was remeasured at $39,519. On October 12, 2017, the Company settled the debt and recorded a gain on settlement of $39,380, the remeasured derivative liability as of the settlement date.  The details are as follows:

	May 9,			June 30,			September 30,			October 12,
	2017			2017			2017			2017
Stock price at valuation date	$	5.10		$	2.40		$	0.61		$	0.51
Conversion price	$	2.61		$	1.56		$	0.40		$	0.33
Risk free rate		1.07	%		1.14	%		1.11	%		1.09	%
Volatility		160.28	%		148.43	%		112.12	%		111.63	%
Number of shares if converted		22,222			37,656			150,148			180,264
Value of derivative	$	75,957		$	50,670		$	39,519		$	39,380
Gain (loss) on derivative	$	(17,957	)	$	25,287		$	11,151		$	139

On May 10, 2017, the Company recorded a derivative liability of $49,334 on convertible debt due to a round- down provision of the conversion price.  The valuation was based on the Black-Scholes model.  As of September 29, 2017, the derivative liability was valued at $26,843.  The valuation was done as of September 29, 2017 since that is the date the note was converted to shares of common stock.  The details are as follows:

May 10, 2017 derivative
	May 10,			June 30,			September 29,
	2017			2017			2017
Stock price at valuation date	$	5.10		$	2.40		$	0.61
Conversion price	$	3.00		$	1.56		$	0.40
Risk free rate		1.02	%		1.05	%		0.99	%
Volatility		160.26	%		124.88	%		85.30	%
Number of shares if converted		16,667			32,051			125,000
Value of derivative	$	49,334		$	37,599		$	26,843
Gain on derivative	$	—		$	11,735		$	10,756