Convertible Note Payables

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Convertible Note Payables

Note 7 – CONVERTIBLE NOTE PAYABLES

The Company had several convertible note payables with unrelated third parties with interest rates ranging between 10% and 12%. These notes have a conversion feature such that the Company could not ensure it would have adequate authorized shares to meet all possible conversion demands; accordingly, the conversion option has been treated as a derivative liability in the accompanying interim financial statements. As of September 30, 2018, and December 31, 2017, the Company had the following convertible notes outstanding:

	Lender		Maturity	Amount			Interest
Note #1*	Auctus	1/6/17	2/6/18	$	507,832			22.0	%
Note #2*	Emunah	1/18/17	12/31/18		26,577			24.0	%
Note #3*, **	UBC	1/18/17	12/31/18		5,477			24.0	%
Note #4*	JSJ	4/25/17	1/26/18		20,814			18.0	%
Note #5*	Crown Bridge	9/15/17	9/15/18		8,083			10.0	%
Note #6*	PowerUp 4	11/13/17	8/30/18		4,544			12.0	%
Note #7*	LG	11/14/17	11/14/18		26,254			12.0	%
Not*e #8*	PowerUp 5	1/24/18	10/30/18		52,500			22.0	%
Note #9*	PowerUp 6	2/22/18	11/30/18		64,500			22.0	%
Note #10*	PowerUp 7	4/11/18	1/30/19		22,500			22.0	%
Note #11*	PowerUp 8	4/27/18	2/15/19		32,250			22.0	%
Note #12*	Jabro 1	7/23/18	4/30/19		21,000			12.0	%
Total				$	792,431
less discount					(98,319	)
Net				$	694,112

*Note is currently in default; **Note is owned by an entity related to William Fowler, CEO.

Note#1, issued on January 6, 2017, is in default and under the terms of the convertible promissory note, the Company is liable to pay 150% of the then outstanding principal and interest plus additional penalties for certain covenants that are breached. In addition to the note balance of $112,463 as of September 30, 2018, there are penalties totaling $395,369 relating to the default of this note.

During the nine-month period ended September 30, 2018, the Company recorded conversion of $34,301 of notes payable into 36,490,407 shares of common stock. The Company recorded a loss on conversion of debt of $179,980 during this period. During the nine-month period ended September 30, 2017, the Company issued 1,500,000 shares of the Company’s common stock to convert a non-refundable promissory note of $75,000 along with interest accrued on the same of $6,576, based on a stock price upon notice of conversion of $0.054.

The derivative liability for all the remaining convertible notes was recalculated on September 30, 2018 to be $905,930 and the loss on change in derivative liability of $108,091 for the nine-months period ended September 30, 2018, was recorded on the accompanying financial statements.

The variables used for the Binomial model are as listed below:

	December 31, 2017	September 30, 2018
●	Volatility: 253% - 286%	Volatility: 191% - 301%
●	Risk free rate of return: 1.28%- 1.76%	Risk free rate of return: 1.93% - 1.99%
●	Expected term: 1-11 months	Expected term: 1-10 months

The Company amortized a debt discount of $199,713 and $183,486 respectively, during the nine-month periods ended September 30, 2018 and 2017. The Company amortized the finance fee of $12,930 and $37,088, respectively, during the nine-month periods ended September 30, 2018 and 2017. Interest expense accrued on non-related convertible notes was $108,261 and $87,612 for the nine-month periods ended September 30, 2018 and 2017, respectively. During the nine-month period ended September 30, 2018, the note holders converted $512,828 of debt into 129,667,221 shares of common stock.