NOTE 6 – CONVERTIBLE PROMISSORY NOTE

On January 16, 2015, the Company executed a convertible promissory note for $69,000 with KBM Worldwide, Inc. The note bears interest at 8% per annum and is due on or before October 20, 2015. The note is convertible at a 42% discount any time during the period beginning 180 days following the date of the note. The Company recorded a debt discount in the amount of $50,029 in connection with the initial valuation of the beneficial conversion feature of the note to be amortized utilizing the interest method of accretion over the term of the note. Further, the Company recognized an initial derivative liability of $50,029based on the Black Scholes Merton pricing model using the following inputs: stock price of $3.50, conversion price of $2.03, .75 years to maturity, .12% risk free rate, and volatility of 18.2%.As of June 30, 2015, $29,801 of the debt discount has been amortized to interest expense. In addition, the Company fair valued the derivative at $1,730 resulting in a gain on the change in fair value of the derivativeusing the following inputs: stock price of $.51, conversion price of $.568, .31 years to maturity, 1% risk free rate, and volatility of 30.4%. The note is shown net of a debt discount of $20,228 at June 30, 2015 and has accrued interest of $2,510. On July 22, 2015, this note was paid in full.

During the quarter ending June 30, 2015 the Company had the following activity in their derivative liability account: