RELATED PARTIES

The Company has certain convertible notes payable to related parties that have a principal balance of $91,000 and $91,000 as of December 31, 2018 and December 31, 2017, respectively. These notes carry interest rates ranging from 7% - 9% and have due dates ranging from 1/23/2014 - 4/8/2015. All notes are currently in default and carry a default interest rate of 10%. These notes carry conversion prices ranging from $0.0072 - $0.0800 per share. The Company evaluated these convertible notes and determined that, for the embedded conversion option, there was a beneficial conversion value to record. The beneficial conversion feature was amortized over the life of the notes, one year, and was fully amortized at December 31, 2018 and December 31, 2017. No beneficial conversion feature expense was incurred during the year ended December 31, 2018 and December 31, 2017.

The Company has certain non-convertible notes payable to related parties that have a principal balance of $343,700 and $343,700 as of December 31, 2018 and December 31, 2017, respectively. These notes carry interest rates ranging from 0% - 10% and have due dates ranging from 8/03/2012 - 7/23/2016. All notes are currently in default and carry a default interest rate of 10%.

The Company has certain notes payable with detached free-standing warrants to related parties that have a principal balance of $271,144 and $215,844 as of December 31, 2018 and December 31, 2017, respectively. These notes carry interest rates ranging from 7% - 10% and have due dates ranging from 8/05/2015 - 04/17/2019. Twenty-one of these notes, carrying a total principal balance of $215,844, are currently in default and carry a default interest rate of 10%. The exercise price for each note payable detached free-standing warrant ranges from $0.0042 - $0.0160. As of December 31, 2018 and December 31, 2017, these notes carried outstanding detached free-standing warrants of 24,003,003 and 16,070,611, respectively. The unamortized discount related to these warrants at December 31, 2018 and December 31, 2017 was $8,074 and $19,969, respectively. During the year ended December 31, 2018 and December 31, 2017, stock warrant amortization expense recorded to interest expense was $41,596 and $86,955, respectively. The reason for the decrease in stock warrants expense was directly related to a decrease in funds borrowed. The fair market value of stock warrants granted during the year ended December 31, 2018 and 2017 was $29,701 and $19,969, respectively.

The fair market value of the outstanding stock warrants was calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 1.03% - 2.68%, dividend yield of 0%, expected life of 5 years, volatility between 135% - 177%.

Total interest expense for related party notes was $80,753 and $71,691 for the year ended December 31, 2018 and December 31, 2017, respectively.

NON- RELATED PARTIES

The Company has certain convertible notes payable to non-related parties that have a principal balance of $143,136 and $137,136 as of December 31, 2018 and December 31, 2017, respectively. These notes carry interest rates ranging from 5% - 30% and have due dates ranging from 2/08/2012 - 5/23/2019. Fifteen of these notes, carrying a total principal balance of $137,136, are currently in default and carry a default interest rate of 10%. These notes carry conversion prices ranging from $0.0017- $0.3235688 per share. The Company evaluated these convertible notes and determined that, for the embedded conversion option, there was a beneficial conversion value to record. Unamortized beneficial conversion feature related to these notes was $5,920 and none as of December 31, 2018 and December 31, 2017, respectively. Beneficial conversion feature expense incurred was $80 and none during the year ended December 31, 2018 and December 31, 2017, respectively.

The Company has certain non-convertible notes payable to non-related parties that have a principal balance of $21,438 and $21,438 as of December 31, 2018 and December 31, 2017, respectively. These notes carry interest rates ranging from 9% - 18% and have due dates ranging from 1/31/2013 - 11/11/2015. All notes are currently in default and carry a default interest rate of 10%.

The Company has a note payable with detached free-standing warrants to a non-related party that has a principal balance of $5,000 and $5,000 as of December 31, 2018 and December 31, 2017, respectively. This note carries an interest rate of 10% and had a due date of 9/11/2014. This note is currently in default. The exercise price for the attached warrants is $0.019 for a total amount of 50,000 common shares. At December 31, 2018 and December 31, 2017, this note carried outstanding detached free-standing warrants of 50,000 and 50,000, respectively. There was no unamortized discount related to these warrants as of December 31, 2018 and December 31, 2017, and no stock warrant amortization expense was recorded to interest expense during the year ended December 31, 2018 and December 31, 2017.

Total interest expense for non-related party notes was $50,235 and $45,730 for the year ended December 31, 2018 and December 31, 2017, respectively.