CONVERTIBLE PROMISSORY NOTE
|9 Months Ended|
Sep. 30, 2015
|Notes to Financial Statements|
|CONVERTIBLE PROMISSORY NOTE||
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 $50,029 based 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%. On July 22, 2015, the Company repaid the $69,000 principle, and an additional $20,000 for all accrued interest and an early payment penalty. The remaining debt discount was expensed and the Company recognized a gain on derivative of $47,022 for the nine months ended September 30, 2015.
During the nine months ended September 30, 2015 the Company had the following activity in their derivative liability account: