Note 9 - Derivative Liabilities

12 Months Ended

Dec. 31, 2018

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 consolidated balance sheets and will be adjusted to reflect fair value at each reporting date. The total fair value of the derivative liability at issuance (or when acquired) for the convertible debt was $743,269 as of July 14, 2018. The fair value of the derivative liabilities at December 31, 2018 was $0. The Company recognized a loss of $4,631,731 for the year ended December 31, 2018, which is presented as "loss on derivative" on the consolidated statements of operations.

On July 24, 2018, the Company recorded the note payoff and reduced the derivative liability to zero.  The valuation was based on the Binomial Lattice model. The Company recorded a loss on derivatives of $4,631,731 since the share price of the common stock increased from $0.85 when the liability was acquired on July 14, 2018 to $5.50 as of July 24, 2018.  The details are as follows:

	July 14,	July 24,
	2018	2018
Stock price at valuation date	$ 0.85	$ 5.50
Conversion price	$ 0.13	$ 0.13
Volatility	189.87 %	217.16 %
Risk free rate	0.00 %	0.00 %
Volatility	192.98 %	192.98 %
Number of shares converted	1,000,000	1,000,000
Value of derivative	$ 743,269	$ 5,375,000
Loss on derivative	n/a	$ (4,631,731)