RELATED PARTIES

The Company has certain convertible notes payable to related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $91,000 and $91,000, 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%, , and conversion prices ranging from $0.0072 - $0.08 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 were fully amortized at December 31, 2017 and December 31, 2016. No beneficial conversion feature expense was incurred during the years ended December 31, 2017 and December 31, 2016.

The Company has certain non-convertible notes payable to related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $343,700 and $418,372, 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 due at December 31, 2017 and December 31, 2016 of $215,844 and $117,650, respectively. These notes carry interest rates ranging from 7% - 10% and have due dates ranging from 8/05/2015 - 12/14/2018. 8 of these notes, carrying a total principal balance of $117,650, are currently in default and carry a default interest rate of 10%. The exercise price for each note payable attached warrant ranges from $0.0044 - $0.016. At year end December 31, 2017 and December 31, 2016, these notes carried outstanding detached free-standing warrants of 16,070,611 and 6,860,544, respectively. The unamortized discount related to these warrants at the year ended December 31, 2017 and December 31, 2016 was $19,969 and none, respectively. At year end December 31, 2017 and December 31, 2016, warrants expense recorded to interest expense was $86,954 and none, respectively. The reason for the increase is at year end December 31, 2016, the Company determined approximately 6,860,544 of these detached free-standing warrants were in excess of the Company’s authorized shares amount of 100,000,000 and were therefore accounted for at fair value under ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments. Utilizing Level 3 Inputs, the Company recorded fair market value adjustments for these common shares over the Company’s 100,000,000 authorized shares amount at the year ended December 31, 2016. The fair market value adjustments were calculated utilizing the Black-Sholes method using the following assumptions: risk free rates ranging between 0.23% - 0.85%, dividend yield of 0%, expected life of 1 year, volatility between 256% - 375%.

NON- RELATED PARTIES

The Company has certain convertible notes payable to non-related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $137,136 and $137,136, respectively. These notes carry interest rates ranging from 8% - 30%, and have due dates ranging from 2/08/2012 - 3/26/2016. All notes 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. The beneficial conversion feature was amortized over the life of the note, one year, and were fully amortized at December 31, 2017 and December 31, 2016. No beneficial conversion feature expense was incurred during the years ended December 31, 2017 and December 31, 2016.

The Company has certain non-convertible notes payable to non-related parties that have a principal balance due at December 31, 2017 and December 31, 2016 of $21,438 and $21,438, 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 certain notes payable with detached free-standing warrants to a non-related party that has a principal balance due at December 31, 2017 and December 31, 2016 of $5,000 and $5,000, respectively. This note carries an interest rate of 10%, had a due date of 9/11/2014. This note is currently in default. The exercise price for the attached warrant is $0.019 for a total amount of 50,000 common shares. At year end December 31, 2017 and December 31, 2016, this note carried outstanding detached free-standing warrants of 50,000 and 50,000, respectively. There was no unamortized discount related to these warrants at the year ended December 31, 2017 and December 31, 2016 and no warrants expense recorded as interest expense at December 31, 2017 and December 31, 2016.

Interest expense under notes payable for the years ended December 31, 2016 and December 31, 2017 was $121,338 and $117,421 respectively.