10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: September 30, 2015

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to____________

Commission File Number: 000-53741

DIRECTVIEW HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Nevada	20-5874633
(State or other jurisdiction of incorporation)	(IRS Employer I.D. No.)

21218 Saint Andrews Blvd., Suite 323

Boca Raton, Florida

(Address of principal executive offices and zip Code)

(561) 750-9777

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of November 19, 2015, there were 426,856,343 shares outstanding of the registrant’s common stock.

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	32
Item 4. Controls and Procedures.	32
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.	33
Item 1A. Risk Factors.	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	33
Item 3. Defaults Upon Senior Securities.	34
Item 4. Mine Safety Disclosures.	34
Item 5. Other Information.	34
Item 6. Exhibits.	35
Signatures	36

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, “DirectView,” “we,” “us,” “our” and similar terms refer to DirectView Holdings, Inc., a Nevada corporation, and each of our wholly-owned subsidiaries and majority-owned subsidiary.

When used in this report the following terms have the following meanings related to our subsidiaries.

● “DirectView Video” refers to DirectView Video Technologies, Inc., our wholly-owned subsidiary and a company organized under the laws of the state of Florida.

● “DirectView Security” refers to DirectView Security Systems, Inc. our majority-owned subsidiary (58% owned as of September 30, 2015) and a company organized under the laws of the state of Florida.

● “Ralston” refers to Ralston Communication Services, Inc. our wholly-owned subsidiary and a company organized under the laws of the state of Florida.

● “Meeting Technologies” refers to Meeting Technologies Inc., our wholly-owned subsidiary and a company organized under the laws of the state of Delaware.

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2015			December 31, 2014
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	61,947		$	13,158
Accounts Receivable - net		278,869			60,014
Other Current Assets		13,282			1,659
Total Current Assets		354,098			74,831
PROPERTY AND EQUIPMENT - Net		18,519			9,336
OTHER ASSETS		100			796
Total Assets	$	372,717		$	84,963
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Convertible Promissory Notes, net of debt discounts	$	804,596		$	559,029
Short Term Advances		146,015			146,015
Notes Payable		126,692			176,692
Accounts Payable		185,153			131,020
Accrued Expenses		1,881,620			1,565,139
Due to Related Parties		15,144			664,068
Derivative Liability		2,139,504			1,462,984
Total Current Liabilities		5,298,724			4,704,947
Total Liabilities		5,298,724			4,704,947
STOCKHOLDERS’ DEFICIT:
Preferred Stock ($0.0001 Par Value; 5,000,000 Shares Authorized; None Issued and Outstanding)		-			-
Common Stock ($0.0001 Par Value; 1,000,000,000 Shares Authorized; 387,242,229 and 14,440,933 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively)		38,724			1,444
Additional Paid-in Capital		16,086,954			14,054,779
Accumulated Deficit		(21,116,049	)		(18,645,772	)
Total DirectView Holdings, Inc. Stockholders’ Deficit		(4,990,371	)		(4,589,549	)
Non-Controlling Interest in Subsidiary		64,364			(30,435	)
Total Stockholders’ Deficit		(4,926,007	)		(4,619,984	)
Total Liabilities and Stockholders’ Deficit	$	372,717		$	84,963

See accompanying unaudited notes to unaudited consolidated financial statements.

3

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
NET SALES:
Sales of Product	$	209,996		$	77,312		$	400,080		$	274,427
Service		59,652			81,235			184,513			139,514
Total Net Sales		269,648			158,547			584,593			413,941
COST OF SALES:
Cost of Product		141,005			70,968			198,207			219,287
Cost of Service		65,594			39,154			136,806			123,431
Total Cost of Sales		206,599			110,122			335,013			342,718
GROSS PROFIT (LOSS)		63,049			48,425			249,580			71,223
OPERATING EXPENSES:
Marketing and Public Relations		145,373			8,452			267,903			112,803
Rent		18,300			-			76,900			-
Depreciation		2,158			-			5,270			1,556
Compensation and Related Taxes		106,341			109,732			357,461			725,746
Other Selling, General and Administrative		168,510			126,598			466,777			378,955
Total Operating Expenses		440,682			244,782			1,174,311			1,219,060
LOSS FROM OPERATIONS		(377,633	)		(196,357	)		(924,731	)		(1,147,837	)
OTHER INCOME (EXPENSES):
Gain (Loss) on conversion of related party loan		5,195			-			(284,805	)		-
Other Income (Expense)		-			(933	)		-			43,171
Gain on Extinguishment of Derivative Liabilities		-			-			-			10,995,882
Change in Fair Value of Derivative Liabilities		156,423			5,599,812			518,096			(13,600,773	)
Derivative Expense		(787,628	)		(26,848	)		(1,042,768	)		(26,848	)
Amortization of Debt Discount		(300,454	)		(98,750	)		(475,654	)		(213,603	)
Interest Expense		(64,368	)		(37,588	)		(165,617	)		(51,970	)
Total Other Income (Expense)		(990,832	)		5,435,693			(1,450,748	)		(2,854,141	)
NET INCOME (LOSS)		(1,368,465	)		5,239,336			(2,375,479	)		(4,001,978	)
Less: Net (Income) Loss Attributable to Non-Controlling Interest		(44,862	)		6,606			(94,798	)		(15,388	)
Net Income (Loss) Attributable to DirectView Holdings, Inc.	$	(1,413,327	)	$	5,245,942		$	(2,470,277	)	$	(4,017,366	)
NET LOSS PER COMMON SHARE:
Basic and Diluted	$	(0.004	)	$	0.01		$	(0.01	)	$	(0.01	)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - Basic and Diluted		364,915,544			369,839,052			206,388,708			324,267,933

See accompanying unaudited notes to unaudited consolidated financial statements.

4

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,375,479	)	$	(4,001,978	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation		5,270			1,556
Common stock issued for compensation		44,100			462,600
Common stock issued for services		9,760			-
Change in fair value of derivative liabilities		(518,096	)		13,600,773
Gain on extinguishment of derivative liabilities		-			(10,995,882	)
Loss on conversion of related party loan, net		284,805			-
Derivative liability expense		1,042,768			26,848
Amortization of debt discount		475,654			213,603
Amortization of deferred financing costs		27,354			24,057
Amortization of original issue discount		31,224			-
(Increase) Decrease in:
Accounts receivable		(218,855	)		11,698
Other current assets		(10,927	)		(12,180	)
Other assets		-			1,586
Increase (Decrease) in:
Accounts payable		54,133			9,754
Accrued expenses		340,072			241,762
Net Cash (Used in) Operating Activities		(808,217	)		(415,803	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of leasehold improvements		(14,453	)		(12,448	)
Net Cash (Used in) Investing Activities		(14,453	)		(12,448	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from convertible note payable		1,560,383			485,833
Payments of convertible notes payable		(50,000	)		(36,759	)
Proceeds from related parties		26,940			-
Proceeds payments to related parties		(665,864	)		(24,898	)
Net Cash Provided by Financing Activities		871,459			424,176
Net Increase in Cash		48,789			(4,075	)
Cash - Beginning of Period		13,158			23,469
Cash - End of Period	$	61,947		$	19,394
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	-		$	12,953
Income Taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in connection with conversion of convertible promissory note	$	272,386		$	17,301
Beneficial conversion and derivative liabilities on convertible notes payable	$	-		$	25,000
Initial recognition of derivative liability as debt discount	$	637,305		$	318,133

See accompanying unaudited notes to unaudited consolidated financial statements.

5

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

DirectView Holdings, Inc., (the “Company”), was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and incorporated in the state of Nevada.

The Company has the following four subsidiaries: DirectView Video Technologies Inc., DirectView Security Systems Inc., Ralston Communication Services Inc., and Meeting Technologies Inc.

The Company is a full-service provider of teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. The Company’s primary focus is to provide high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance.

Basis of Presentation

The unaudited consolidated financial statements include the accounts of the Company, three wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting interest of approximately 58% (the other 42% is owned by non-controlling interests, including 23% which is owned by the Company’s CEO who is a majority shareholder of the Parent Company) as of September 30, 2015. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on April 15, 2015.

In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2015, and the results of operations and cash flows for the nine months ending September 30, 2015 have been included. The results of operations for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year.

All share and per share amounts have been presented to give retroactive effect to a 1 for 30 reverse stock split that occurred in March 2015.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property and equipment, valuation of beneficial conversion features on convertible debt and the assumptions used to calculate derivative liabilities.

6

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Non-controlling Interests in Consolidated Financial Statements

The Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51,” (“SFAS No. 160”). This statement clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of September 30, 2015, the Company reflected a non-controlling interest of $64,364 in connection with our majority-owned subsidiary, DirectView Security Systems Inc. as reflected in the accompanying consolidated balance sheets.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Fair Value of Financial Instruments

The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2015 and December 31, 2014. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

7

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate.

Accounts Receivable

The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2015 and December 31, 2014, management determined that an allowance is necessary which amounted to $38,000 at both dates. During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company recognized $0 and $20,500 respectively of expenses related to uncollectible accounts receivable.

Advertising

Advertising is expensed as incurred. Advertising expenses for the nine months ended September 30, 2015 and 2014 was $267,790 and $112,803, respectively.

Shipping costs

Shipping costs are included in other selling, general and administrative expenses and was deemed to be not material for the nine months ended September 30, 2015 and 2014, respectively.

Inventories

Inventories, consisting of finished goods related to our products are stated at the lower of cost or market utilizing the first-in, first-out method. The Company acquires inventory for specific installation jobs. As a result, the Company orders inventory only as needed for installations and there was an insignificant amount of inventory on hand at September 30, 2015 and December 31, 2014.

Property and equipment and Leasehold Improvements

Property and equipment and leasehold improvements are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line basis over the term of the lease.

Impairment of Long-Lived Assets

Long-Lived Assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets”. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not consider it necessary to record any impairment charges during the nine months ended September 30, 2015 and 2014.

8

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized.

Pursuant to ASC Topic 740-10: Income Taxes related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements.

Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. The Company recorded stock based compensation expense of $44,100 and $431,600 during the nine months ended September 30, 2015 and 2014, respectively.

Revenue recognition

The Company follows the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials. The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectibility is reasonably assured. When a customer order contains multiple items such as hardware, software, and services which are delivered at varying times, the Company determines whether the delivered items can be considered separate units of accounting. Delivered items should be considered separate units of accounting if delivered items have value to the customer on a standalone basis, there is objective and reliable evidence of the fair value of undelivered items, and if delivery of undelivered items is probable and substantially in the Company’s control.

The following policies reflect specific criteria for the various revenues streams of the Company:

Revenue is recognized upon completion of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage.

9

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation.

Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectibility of the related receivable is probable.

Cost of sales includes cost of products and cost of service. Product cost includes the cost of products and freight costs. Cost of services includes labor and fuel expenses.

Concentrations of Credit Risk and Major Customers

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

During the nine months ended September 30, 2015, three customers accounted for 60% of revenues. The following is a list of percentage of revenue generated by the three customers:

Customer 1	13	%
Customer 2	22	%
Customer 3	25	%
Total	60	%

During the nine months ended September 30, 2014, one customer accounted for 61% of revenues.

As of September 30, 2015, four customers accounted for 74% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers:

Customer 1	10	%
Customer 2	12	%
Customer 3	16	%
Customer 4	36	%
Total	74	%

As of December 31, 2014, three customers accounted for 73% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:

Customer 1	16	%
Customer 2	26	%
Customer 3	31	%
Total	73	%

10

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Related Parties

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Net Loss per Common Share

Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. At September 30, 2015 the Company had 691,296,462 shares equivalent issuable pursuant to embedded conversion features. At December 31, 2014, the Company had 69,694,188 shares equivalent issuable pursuant to embedded conversion features.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on the results of operations, financial condition or cash flow.

NOTE 2 – GOING CONCERN CONSIDERATIONS

The accompanying unaudited consolidated financial statements are prepared assuming the Company will continue as a going concern. At September 30, 2015, the Company had an accumulated deficit of approximately $21 million, a stockholders’ deficit of approximately $5 million and a working capital deficiency of $4,944,626. For the nine months ended September 30, 2015 the net loss totaled $2,375,479. The net cash used in operating activities for the nine months ended September 30, 2015 totaled $808,217 and the net cash used in investing activities totaled $14,453. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon increasing sales and obtaining additional capital and financing. Management intends to attempt to raise funds by way of a public or private offering. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s limited financial resources have prevented the Company from aggressively advertising its products and services to achieve consumer recognition. The unaudited consolidated financial statements do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

11

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	Estimated life	September 30, 2015			December 31, 2014
Leasehold Improvements	2 years	$	26,901		$	12,448
Less: Accumulated amortization			(8,382	)		(3,112	)
Furniture and fixtures	3 years		2,771			2,771
Less: Accumulated depreciation			(2,771	)		(2,771	)
		$	18,519		$	9,336

For the nine months ended September 30, 2015 and 2014, depreciation and amortization expense amounted to $5,270 and $1,556 respectively.

In June 2014 the Company negotiated to lease office space and made leasehold improvements totaling $12,448. In August 2015 the Company made leasehold improvements totaling $14,453. The Company will amortize the balance on a straight-line basis for the term of 2 years commencing in July 2014 and August 2015.

In 2014 the Company took occupancy of approximately 3,000 square feet of office space in New York city. The Company negotiated lease terms and has recorded rent expense of $5,500 per month for the period of September 1, 2014 through September 30, 2015 totaling accrued rent of $5,500 related to this office space.

NOTE 4 – NOTES PAYABLE

In November 2009, the Company issued unsecured notes payable of $20,000. The note is payable either in cash or security equivalent at the option of the Company. In the event the Company repays this note in shares of the Company’s common stock the rate is $0.05 per share. The note payable bears 6% interest per annum and matured in May 2010. In January 2010, this note was satisfied by issuing a note payable to another unrelated party with the same terms and conditions except for its maturity date changed to January 2011. The note is in default as of June 30, 2015 and as of December 31, 2014. In October 2013 $10,100 was assigned to a different note holder. The new note is included in Notes Payable. The remaining balance of this note is $9,900 as of September 30, 2015 and as of December 31, 2014.

During the year ended December 31, 2012, the Company entered into demand notes with Regal Capital (formerly a related party) totaling $116,792 bearing interest at 12% per annum. As of September 30, 2015 and December 31, 2014 the notes amounted to $116,792 and $116,792 respectively.

In November 2014, the Company issued a Demand Promissory Note of $50,000 due December 22, 2014. The interest rate is 10% with a minimum guaranteed interest amount of $5,000. The Note Holder granted the Company an extension of due date making the note due January 22, 2015. The note was satisfied in March 2015. As of September 30, 2015 and December 31, 2014 the notes amounted to $0 and $50,000 respectively.

As of September 30, 2015 and December 31, 2014, notes payable amounted to $126,692 and $176,692, respectively.

Accrued interest on the notes payable amounted to approximately $60,600 and $43,900 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses.

12

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 5 – SHORT TERM ADVANCES

During the nine months ended September 30, 2015 and the year ended December 31, 2014, an unrelated party advanced funds to the Company used for operating expenses. The advances are payable in cash and are non interest bearing and due on demand. The balance of these short term advances was $146,015 and $146,015 as of September 30, 2015 and December 31, 2014.

NOTE 6 – ACCRUED EXPENSES

As of September 30, 2015 and December 31, 2014 the Company had accrued expenses of $1,881,620 and $1,565,139 respectively. The following table displays the accrued expenses by category.

	September 30, 2015		December 31, 2014
Operating Expenses	$	22,600	$	8,700
Lease Abandonment		164,375		164,375
Employee Commissions		60,590		60,590
Interest		255,897		213,473
Salaries		1,237,098		981,908
Sales Tax Payable		56,890		25,674
Payroll Liabilities		84,170		110,419
	$	1,881,620	$	1,565,139

NOTE 7 – CONVERTIBLE PROMISSORY NOTES

Convertible promissory notes consisted of the following:

	September 30, 2015			December 31, 2014
Secured convertible promissory notes	$	1,856,804		$	720,269
debt discount liability		(1,002,387	)		(124,527	)
debt discount original issue discount		(42,759	)		(16,296	)
debt discount deferred financing		(7,062	)		(20,417	)
Secured convertible promissory note– net	$	804,596		$	559,029

During fiscal 2009, the Company reclassified $45,000 3% unsecured notes payable from long-term to short-term. The maturity of these notes payable ranged from January 2010 to April 2010 and the notes are in default at December 31, 2012. The Company negotiationed with the note holder to extend the maturity date and has accrued 12% interest per annum based on the default provision until such time this note is extended or settled. In May 2013 the Company and the note holder renegotiated the terms of the note to include features that allow the note holder to convert the principal balance of the note into common shares at the conversion price of $.0001. This note included down round (“ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). At issuance of the renegotiated note the Company recorded a debt discount in the amount of $45,000 which has been fully amortized as of December 31, 2013. In June 2013 the note holder converted $764 into common shares at the contractual rate of $.0001per share. In March 2014 the note holder converted an additional $990 into common shares at the contractual rate of $.0001 per share. In October 2014 the note holder assigned $20,000 of the note balance to a third party. The balance of the unsecured note payable amounted to $23,246 as of September 30, 2015 and $43,246 as of December 31, 2014.

13

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 7 – CONVERTIBLE PROMISSORY NOTES (continued)

Senior secured promissory notes aggregating an original principal of $85,500 were issued in 2008. These notes are payable either in cash or security equivalent at the option of the Company. The notes payable bear 8% interest per annum and are payable on April 1, 2011. The principal and accrued interest is convertible at the option of the note holder into shares of our common stock at a conversion price of $0.50 per share. In July 2013, the Company reclassified the balance of these notes totaling $17,000 to Convertible Promissory Notes from Notes Payable. In May 2013 the Company and the note holder renegotiated the terms of the note to include features that allow the note holder to convert the principal balance of the note into common shares at the conversion price of $.0001.

This note included down round “Ratchet” provisions that resulted in derivative accounting treatment for this note (See note 8). At issuance of the renegotiated note the Company recorded a debt discount in the amount of $17,000 which has been fully amortized as of December 31, 2013. In July 2013 the note holder converted $764 into 254,667 common shares. In March 2014 the note holder converted an additional $990 into common shares at the contractual rate of $.003 per share. In May 2015 the note holder converted the remaining balance of $15,246 into common shares at the contractual rate of $.003 per share. The balance of the unsecured note payable amounted to $0 as of September 30, 2015 and $15,246 as of December 31, 2014.

August 30, 2013 the Company issued an $8,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.0001. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In April 2014 the note holder converted $1,500 into common shares at the contractual rate of $.0001 per share. In June 2015 the note holder converted the remaining balance of $6,500 into common shares at the contractual rate of $.00096 per share. The balance of the convertible debenture is $0 as of September 30, 2015 and as of December 31, 2014.

On October 10, 2013 the Company issued a $10,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.00075. The Company recorded a debt discount of $8,333 upon issuance of this note. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 7). The balance of the convertible debenture is $10,000 as of September 30, 2015 and as of December 31, 2014. In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $8,333 (see Note 8).

On December 11, 2013 the Company issued a $25,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.0008. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $23,958 (see Note 8). The balance of this convertible debenture is $25,000 as of September 30, 2015 and as of December 31, 2014.

On January 16, 2014 the Company issued a $25,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at 50% of the lowest trading price during the ten trading days prior to the conversion date. The Company recorded a debt discount of $25,000 with the difference of $26,848 recorded as a derivative expense. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $51,848 (see Note 8). The balance of this convertible debenture is $25,000 as of September 30, 2015 and as of December 31, 2014.

In March 2014 the Company issued three $50,000 8% convertible debentures with a one year maturity date. Each note is convertible at a contractual rate of $.0175 which exceeded the quoted stock price on the date of the issuance of the convertible debentures. The balance of these three notes was $150,000 as of September 30, 2015 and as of December 31, 2014.

On April 11, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $367,754 with a one year maturity date. This convertible debenture converts at $.0175. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $266,285 and a debt discount of $271,285 (see Note 8). The Company also recorded OID of $28,965. The OID and debt discount are being amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In December 2014 the note holder assigned $25,000 of the principal balance of the note to a third party. In February 2015 the note holder assigned $25,000 and $50,000 of the principal balance of the note to two different third party entities. In the period of January through March 2015 the note holder converted $47,651 into 4,918,166 common shares at the contractual rate ranging from $.0072 to $.027 per share.

14

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 7 – CONVERTIBLE PROMISSORY NOTES (continued)

In the period of April through June 2015 the note holder converted $171,961 into 104,386,160 common shares at the contractual rate ranging from $.00186 to $.00216 per share. After assignment of $75,000 and the conversions into common shares the balance of this convertible debenture as of June 30, 2015 is $6,142. The balance of the convertible debenture as of December 31, 2014 is $300,754. The balance net of debt discount and deferred financing is $0 and $240,820 as of June 30, 2015 and December 31, 2014, respectively.

On October 8, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $81,522 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $84,250 and a debt discount of $75,000 (see Note 8). The Company also recorded OID of $6,522. The OID and debt discount are being amortized over the term of the note. In April 2015 the note holder assigned $15,000 of the principal balance of the note to a third party. In July 2015 the note holder converted $66,522 into 26,373,441 common shares at the contractual rate of $.00258 per share. The balance of this convertible debenture as of September 30, 2015 is $0 and $81,522 as of December 31, 2014. The balance net of debt discount and deferred financing is $0 and $3,130 as of September 30, 2015 and December 31, 2014, respectively.

In May 2015 a note holder converted a $15,000 assigned note balance into 9,722,222 common shares at a contractual rate ranging from $.0012 to $.00216 leaving the note balance at $0 as of September 30, 2015.

On October 27, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $21,600 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $311,662 and a debt discount of $18,400 (see Note 8). The Company also recorded OID of $1,600. The OID and debt discount are being amortized over the term of the note. The balance of this convertible debenture as of September 30, 2015 and as of December 31, 2014 is $21,600. The balance net of debt discount and deferred financing is $19,933 and $4,934 as of September 30, 2015 and December 31, 2014, respectively.

On December 19, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $27,174 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $5,017 and a debt discount of $5,017 (see Note 8). The Company also recorded OID of $2,000. The OID and debt discount are being amortized over the term of the note. The balance of this convertible debenture as of September 30, 2015 and as of December 31, 2014 is $27,174. The balance net of debt discount and deferred financing is $26,189 and $20,926 as of September 30, 2015 and December 31, 2014, respectively.

On December 19, 2014 a note holder assigned $25,000 to another note holder. On December 29, 2014 $10,773 was converted into 664,973 shares of common stock at a contractual rate of $.0162. In February 2015 a note holder assigned an additional $25,000 to the same assignee. The note holder converted $13,831 into 4,619,339 common shares at the contractual rate ranging from $.0054 to $.027 per share. In September 2015 the balance of the convertible debenture was written off leaving a balance of $0 and $14,227 as of September 30, 2015 and December 31, 2014, respectively.

In October 2014 a note holder assigned $20,000 of principal balance and $4,489 of an accrued interest balance to a third party. In January 2015 the note holder converted $1,000 into 333,333 common shares at the contractual rate of $.003. In March 2015 the note holder converted $1,300 into 1,300,000 common shares at the contractual rate of $.001. In April and May 2015 the note holder converted $17,200 into 13,900,000 common shares at the contractual rate ranging from $.0008 to $.00156 per share. The balance of the unsecured note payable amounted to $4,989 and $24,489 as of September 30, 2015 and December 31, 2014, respectively.

15

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 7 – CONVERTIBLE PROMISSORY NOTES (continued)

In February 2015 a note holder assigned $50,000 of principal balance of a convertible debenture to a third party. In March 2015 the note holder converted $4,125 of principal balance, $3,375 of accrued interest and $1,220 of fees into 4,844,633 common shares at the contractual rate of $.0072. In the period of April through May 2015 the note holder converted $38,250 of principle balance, $909 of accrued interest and $7,320 of fees into 37,148,448 common shares at the contractual rate ranging from $.00096 to $.075 per share. In August 2015 the note holder converted $7,625 of principle balance, $50 of accrued interest and $156 of fees into 2,900,325 common shares at the contractual rate of $.0027per share. The balance of the unsecured note payable amounted to $0 as of September 30, 2015.

On February 11, 2015 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $54,348 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $119,940, a debt discount of $50,348 (see Note 8), and derivative expense of $69,940. The Company also recorded OID of $4,000. The OID and debt discount are being amortized over the term of the note. In June 2015 the note holder assigned the balance of the note and accrued interest of $4,348 to a third party totaling a new note balance of $58,696 as of June 30, 2015. In August 2015 the note holder converted $10,000 of principle balance into 7,246,377 common shares at the contractual rate of $.00138 per share. In September 2015 the note holder converted an additional $24,000 of principle balance into 17,391,304 common shares at the contractual rate of $.00138 per share. The balance of the unsecured note payable amounted to $24,696 as of September 30, 2015.

On April 8, 2015 the Company issued a 5% original issue discount (OID) senior secured convertible promissory note with a principal balance of $52,500 with a one year maturity date. This convertible debenture converts at 55% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $86,506, a debt discount of $50,000 (see Note 8), and derivative expense of $36,506. The Company also recorded OID of $2,500 and deferred financing of $5,000. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the senior secured convertible promissory note amounted to $52,500 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, OID and deferred financing as of September 30, 2015 amounted to $23,750.

On May 5, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $115,789 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $147,775, a debt discount of $110,000 (see Note 8), and derivative expense of $37,775. The Company also recorded OID of $5,789 and deferred financing of $10,000. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $115,789 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, deferred financing and OID as of September 30, 2015 amounted to $37,171.

On May 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $19,737.

16

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 7 – CONVERTIBLE PROMISSORY NOTES (continued)

On May 27, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $18,275.

On June 5, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $16,228.

On June 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500 and deferred financing of $1,500. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, deferred financing and OID as of September 30, 2015 amounted to $75,832.

On July 1, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $45,395.

On July 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $39,145.

On July 23, 2015 the Company issued a convertible promissory note with a principal balance of $429,439 with a one year maturity date. This convertible debenture converts at 55% of the two lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $707,603, a debt discount of $429,439 (see Note 8), and derivative expense of $278,164. The debt discount is being amortized over the term of the note. The balance of the convertible promissory note amounted to $429,439 as of September 30, 2015. The balance of the convertible promissory note net of debt discount as of September 30, 2015 amounted to $209,226.

17

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 7 – CONVERTIBLE PROMISSORY NOTES (continued)

On August 12, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $237,303, a debt discount of $142,500 (see Note 8), and derivative expense of $95,197. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $26,645.

On September 11, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $286,284, a debt discount of $142,500 (see Note 8), and derivative expense of $144,179. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $14,145.

During the nine months ended September 30, 2015 and 2014, amortization of debt discount amounted to $475,654 and $213,603, respectively.

NOTE 8 – DERIVATIVE LIABILITY

The Company enters into financing arrangements that contain embedded derivative features due to down round (“Ratchet”) provisions or conversion formulas that cause derivative treatment. The Company accounts for these arrangements in accordance with Accounting Standards Codification topic 815, Accounting for Derivative Instruments and Hedging Activities (“ASC 815”) as well as related interpretation of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. The Company determines the fair value of derivative instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument.

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, we consider, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments we generally use the Black-Scholes model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. Under the terms of the new accounting standard, increases in the trading price of the Company’s common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in trading fair value during a given financial quarter result in the application of non-cash derivative income.

18

DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 8 – DERIVATIVE LIABILITY (continued)

The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December 31, 2014 to September 30, 2015:

	Conversion feature derivative liability
Balance at December 31, 2014	$	1,462,984
Recognition of initial derivative liability		2,391,458
Reclass of derivative liability to additional paid in capital due to conversions		(1,196,842	)
Change in fair value included in earnings		(518,096	)
Balance at September 30, 2015	$	2,139,504

Total derivative liability at September 30, 2015 and December 31, 2014 amounted to $2,139,504 and $1,462,984, respectively. The change in fair value included in earnings as income of $518,096 is due in part to the quoted market price of the Company’s common stock decreasing from $.027 at December 31, 2014 to $.0037 at September 30, 2015 coupled with substantially reduced conversion prices due to the effect of “Ratchet” provisions incorporated in convertible notes payable.

The Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model:

	September 30, 2015
Expected volatility		192 % - 305	%
Expected term		3 – 12 months
Risk-free interest rate		0.0 2% - 0.09	%
Expected dividend yield		0	%

NOTE 9 – STOCKHOLDERS’ DEFICIT

On March 14, 2015 the Company approved a 1-30 Reverse Stock Split (see Note 1).

In January 2015 the Company made four issuances of common shares related to the same note payable. The Company issued 600,000; 633,333; 633,333 and 666,667 shares of common stock at $.0108 for the reduction of $6,480; at $.0108 for the reduction of 6,840; at $.0108 for the reduction of $6,840 and at $.009 for an additional reduction of $6,000 in principal of notes payable.

In January 2015 the Company issued 333,333 shares of common stock at $.003 for the reduction of $1,000 in principal of notes payable.

In January 2015 the Company issued 699,667 shares of common stock at $.0108 for the reduction of $7,556 in principal of notes payable.

In February 2015 the Company issued 700,000; 766,667 and 833,333 shares of common stock at $.009 for the reduction of $6,300; at $.009 for the reduction of $6,900; and at $.0072 for the reduction of $6,000 in principal of notes payable.

In February 2015 the Company made four issuances of common shares related to the same note payable. The Company issued 741,226; 946,793; 1,033,333 and 1,097,767 shares of common stock at $.009 for the reduction of $6,671; at $.009 for the reduction of 8,521; at $.0072 for the reduction of $7,440 and at $.0054 for an additional reduction of $5,928 in principal of notes payable.

In February 2015 the Company issued 116,667 shares of common stock at fair market value of $.018 for $2,100 of services rendered.

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DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 9 – STOCKHOLDERS’ DEFICIT (continued)

In March 2015 the Company made two issuances of common shares related to the same note payable. The Company issued 41,500 and 43,333 shares of common stock at $.027 for the reduction of $1,121 and at $.027 for the reduction of $1,170 in principal of notes payable.

In March 2015 the Company made issuances of common shares related to the same note payable. The Company issued 4,844,633 shares of common stock at $.0072 for the reduction of $8,720 of principal, interest and associated fees.

In March 2015 the Company made two issuances of common shares related to the same note payable. The Company issued 45,833 and 54,780 shares of common stock at $.027 for the reduction of $1,238 and at $.027 for the reduction of $1,479 in principal of notes payable.

In March 2015 the Company issued 1,300,000 shares of common stock at $.001 for the reduction of $1,300 in principal of notes payable.

In the period of April 1, 2015 through June 30, 2015 the Company issued 174,227,554 shares of common stock at contractual rates ranging from $.00096 to $.075 for the reduction of $265,281in principal notes payable, $8,540 in fees and $959 in the reduction of accrued interest (See Note 7).

In May 2015 the Company issued 3,000,000 shares of common stock at fair market value of $.014 per share, based on quoted traded prices, for compensation totaling $42,000.

In the period of July 1, 2015 through September 30, 2015 the Company issued 71,280,788 shares of common stock at contractual rates ranging from $.00138 to $.003 for the reduction of $114,289 in principal of convertible notes payable, $156 in fees and $44,181 in the reduction of accrued interest (See Note 7).

NOTE 10 – RELATED PARTY TRANSACTIONS

Due to Related Parties

The following related party transactions have been presented on the balance sheet in due to related parties. Additionally, as of September 30, 2015 $82,395 of accrued interest due to related parties has been included in accrued expenses.

During 2007 and 2006, the Company’s principal officer loaned $39,436 and $14,400, respectively to the Company for working capital purposes. This debt carries 3% interest per annum and matured in July 2010. In March 2012, the Company and the principal officer of the Company agreed to change the term of this promissory note into a demand note. In May and June 2015 the Company repaid $16,881 in the principal of this note. During the period of July 1, 2015 through September 30, 2015 the Company repaid the remaining balance of $35,465. The amount due to such related party at September 30, 2015 and December 31, 2014 amounted to $0 and $52,347, respectively. As of December 31, 2014, this note was reflected as due to related party. Accrued interest related to these notes amounted to $4,189 and $4,716 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses in the Company’s balance sheet.

In June 2009, the Company issued a promissory note amounting $22,000 to the Chief Executive Officer of the Company. This note is payable either in cash or security equivalent at the option of the note holder. The note payable bears 12% interest per annum and was payable in June 2010. During 2012, the Company repaid the Chief Executive Officer $11,157 and in July and August 2015 the Company repaid the Chief Executive Officer $10,843 related to this note leaving the balance of the note at $0 as of September 30, 2015. As of December 31, 2014 the balance on this promissory note amounted to $10,843.

Accrued interest on the notes payable to the Chief Executive Officer of the Company amounted to $29,728 and $21,999 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses in the Company’s balance sheet.

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DIRECTVIEW HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

NOTE 10 – RELATED PARTY TRANSACTIONS (continued)

The Chief Executive Officer of the Company, from time to time, provided advances to the Company for operating expenses. The Company repays the advances when funds are available. The Company repaid $13,819 to the Chief Executive Officer in the first quarter of 2015. The Chief Executive Officer of the Company loaned the Company $20,984 in the first quarter of 2015. In March 2015 the Company issued the Chief Executive Officer 100,000,000 shares of common stock for the retirement of $10,000 of loans. The Company repaid $10,907 to the Chief Executive Officer and borrowed $2,484 in the second quarter of 2015. The Company repaid $140,330 to the Chief Executive Officer and borrowed $3,412 in the third quarter of 2015. At September 30, 2015 and December 31, 2014 the Company had a payable to the Chief Executive Officer of the Company amounting to $15,144 and $163,320, respectively. These advances are short-term in nature and non-interest bearing.

The Chief Financial Officer of the Company, from time to time, provided advances to the Company for operating expenses. The Company repaid $8,119 to the Chief Financial Officer in the second quarter of 2015. At September 30, 2015 and December 31, 2014, the Company had a payable to the Chief Financial Officer of the Company amounting to $0 and $8,119, respectively. These advances are short-term in nature and non-interest bearing.

During the quarter ended June 30, 2012, the Company issued notes payable to the CFO amounting to $429,439 related to the accrued salaries. In July 2015 the Company repaid the CFO $429,439. As of September 30, 2015 and December 31, 2014 the balance on the notes payable related to the accrued salaries amounted to $0 and $429,439, respectively.

NOTE 11 – BARTER REVENUE

The Company provides security systems and associated installation labor in exchange for business services. The Company recognizes revenue from these barter transactions when security systems are installed and recognizes deferred barter costs as other current assets until the barter transaction is completed and then recognizes the appropriate expense. The barter revenue is valued at the fair market value which is the selling price we sell to other third parties. The barter revenue for the nine months ended September 30, 2015 totaled $18,047. The barter revenue for the twelve months ended December 31, 2014 totaled $5,893.

NOTE 12 – ACCRUED PAYROLL TAXES

As of September 30, 2015 and December 31, 2014 the Company recorded a liability related to unpaid payroll taxes which includes interest and penalties of approximately $84,000 and $110,000, respectively. The liability was incurred in the years ended December 31, 2007 through December 31, 2010 as a result of the Company not remitting payroll tax liabilities. In August 2013, the Company paid $43,176 and in September 2015, the Company paid $28,281 toward the outstanding payroll tax liabilities. Such amount also includes current payroll tax liabilities and has been included in accrued expenses in the accompanying consolidated financial statements.

NOTE 13 – SEGMENT REPORTING

Although the Company has a number of operating divisions, separate segment data has not been presented as they meet the criteria for aggregation as permitted by ASC Topic 280, “Segment Reporting” (formerly Statement of Financial Accounting Standards (SFAS) No. 131, “Disclosures About Segments of an Enterprise and Related Information”).

Our chief operating decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the CEO is identical to the information presented in the accompanying consolidated statements of operations. Therefore, the Company has determined that it operates in a single operating segment, specifically, web communications services. For the nine months ended September 30, 2015 and the year ended December 31, 2014 all material assets and revenues of the Company were in the United States.

NOTE 14 – SUBSEQUENT EVENTS

Subsequent to the quarter ending September 30, 2015 the Company issued 40,088,776 shares of common stock in satisfaction of $46,250 of convertible promissory notes and $2,625 of accrued interest. These notes were converted at contractual rates ranging from $.00116 to $.0023.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Various statements in this registration statement contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our history of losses and declining sales, our ability to raise sufficient capital to fund our operating losses, increase our net sales to a level which funds our operating expenses, economic, political and market conditions and fluctuations, competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, as well as our annual report on Form 10-K for the year ended December 31, 2014 including the risks described in Part I. Item 1A. Risk Factors of that report. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this registration statement, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

Overview

Our company was formed in October 2006 and immediately thereafter we acquired Ralston Communication Services and Meeting Technologies from DirectView, Inc., a Nevada corporation of which Mr. and Mrs. Ralston were officers and directors immediately prior to such acquisition, in exchange for the assumption by us of these subsidiaries working capital deficiencies and any and all trade credit and other liabilities. Both of these entities had historically provided the video conferencing services we continue to provide. Thereafter, in February 2007, we formed DirectView Security Systems, Inc. (“DirectView Security”) and in July 2007 we formed DirectView Video. DirectView Security began offering services and products immediately from inception.

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Our operations are conducted within two divisions:

● The vast majority of our business is derived from our security division which provides surveillance systems, digital video recording and services to businesses, organizations and law enforcement, and

● Our video conferencing division which is a full-service provider of teleconferencing products and services to businesses and organizations.

We operate our security division through DirectView Security where we provide a wide array of video and audio hardware and software options to create custom security and surveillance solutions for large and small businesses as well as residential customers. The Company currently services customers in transportation, hotel and hospitality, education, cannabis, food services, and real estate industries.

We provide our customers with the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance. We generate revenue through the sale and installation of surveillance systems and the sale of maintenance agreements. We source our products from a variety of different suppliers and our product and service offerings include:

DRV Recorders and Cameras	Video Intercoms
NVR Recorders and IP Cameras	Laser and Video Beam Perimeter Security
Motion Detection and Thermal Imagery	Security Design and Consulting
Remote Control Device Management	Equipment Maintenance Service Plans
Access Control Solutions

We have also developed custom software programs and applications to work with the products we offer to customers to enhance their convenience and capability. We have developed a mobile application which we call the “DirectView Security App” to enable full remote management of deployed surveillance devices including positioning cameras, setting recording parameters, and replay of selected video. The DirectView Security App provides full encryption and is compatible with all Apple and Android based mobile devices. We are also in late stage development of a proprietary software platform targeted for educational institutions/daycare, aviation, and religious organizations. The platform will enable tiered database controlled access to multiple encrypted live streaming videos with audio with full scalability. The software will allow these businesses and organizations to provide parents, patrons or customers access to see to view a particular classroom, attend a religious service, or watch any activity permitted by the licensor of the software through any internet connected mobile device or computer.

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We target businesses of various sizes ranging from residential to large scale businesses. Our main markets can be divided into five categories which include:

● Transportation (Airport, Heliport, and Bus Terminal)

● Hospitality (Hotel, Golf Course, Food Service and Bars/Restaurant)

● Industrial (Warehousing and Storage, Cannabis Grow House and Dispensary, and Manufacturing)

● Educational (Daycare, Private School, Learning Center/Religious Organization)

● Residential (Condo/Co-op, Property Management Company, and Private Home)

Beginning in 2014, we focused a significant amount of our business development and marketing efforts towards the legalized cannabis industry. We see this market as a strong growth area for the Company due to our belief that the political landscape will continue to move towards the legalization of marijuana for medical and recreational use across the country. By the middle of 2013, 18 states and the District of Columbia have already allowed the production and use of marijuana for medical purposes. Two states, Colorado and Washington, also have approved cannabis for recreational use. Additionally, many large security service providers have publicly avoided servicing businesses engaged in the sale or growing of marijuana which we believes lowers the competitive landscape.

In addition to conducting direct sales activities to businesses operating in this market, we also focus on partnerships with other service providers in the industry that are generally involved in the design and construction of facilities to grow and dispense marijuana. We have a preferred provider agreement with Legacy Construction Company of Colorado, LLC (“Legacy”). Under the terms of the preferred provider agreement, Legacy directs their retail and marijuana facility construction clients to DirectView for video surveillance and security needs. Legacy has over fifteen years of experience and expertise in commercial general contracting with specific experience in the retail and medical marijuana industry. Legacy holds a Class A general contractors license in six states including Colorado,Wyoming, Nevada, New Mexico, Utah, and Arizona. We also have a strategic partnership agreement with Cannamor, LLC (“Cannamor”), a privately held Colorado based consulting company focusing on legal cannabis growing and dispensing projects, where we are engaged as its exclusive security solutions provider. Under the terms of the agreement, Cannamor exclusively endorses and recommends DirectView as its vendor of choice for the planning and installation of video surveillance, video monitoring, video recording products and related services to its prospective clients. Both of these arrangements have led to sales and a number of large potential project leads within our sales pipeline. We continue to see this industry as a growing part of our security and surveillance business for the foreseeable future.

In an effort to further expand our market opportunities, in April 2015, we began preparations to develop a unique body-worn-camera solution to target law enforcement, business security and homeland security markets. We expect the solution to comprise of a line of body-worn-cameras integrated with a suite of communications capabilities including high capacity streaming video, Bluetooth®, GPS, push to talk, WIFI/4G LTE, and imbedded biometric access. We are also working to integrate the video feeds with backend storage solutions for video/audio storage including playback and editing of stored evidence. We have received body-worn-camera prototypes that have been manufactured to our design specifications by a large third party manufacturer and we are currently beta testing those prototypes. We intend to have that manufacturer produce a finished product upon successful completion of product testing.

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In order to enhance the communications capability of the solution as well as our marketing capabilities, we entered into an agreement with xG Technology, Inc. (“xG”), a developer of wireless communications and spectrum sharing technologies, to integrate our body-worn-camera device and related hardware with xG’s xMax private mobile broadband technology. The planned integration will consolidate the private, secure, high-performance communications capabilities of xMax with the features and functionality of our body-worn cameras.

We intend to offer our body-worn-cameras and the related suite of communications and storage solutions to our target customers through both direct sales and strategic partnerships with companies that sell complimentary products in the areas of law enforcement, homeland security and private security. In addition to our integration agreement with xG, we entered into a co-marketing agreement with PositiveID Corporation (“PSID”), a developer of diagnostic testing systems for use by first responders, to jointly market both companies’ products to homeland security and first responder markets. We believe that co-marketing and product integration agreements such as these will expand the breadth of our product offerings and enable us to leverage the marketing capabilities of our partners to increase sales opportunities upon product launch.

Our video conferencing products and services enable our clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. Our primary focus is to provide high value-added conferencing products and services to organizations such as commercial, government, medical and educational sectors. We generate revenue through the sale of conferencing services based upon usage, the sale and installation of video equipment and the sale of maintenance agreements.

As disclosed in a current report on Form 8-K filed with the SEC on July 11, 2014, on June 24, 2014, DirectView Holdings, Inc. changed its state of incorporation from the State of Delaware to the State of Nevada (the “Reincorporation”) pursuant to a plan of conversion dated June 24, 2014 (the “Plan of Conversion”). The Reincorporation was accomplished by filing (i) Nevada articles of conversion (the “Nevada Articles of Conversion”) with the Secretary of State of the State of Nevada, (ii) a certificate of conversion (the “Delaware Certificate of Conversion”) with the Secretary of State of the State of Delaware and (iii) articles of incorporation with the Secretary of State of the State of Nevada. In connection with the Reincorporation, our board of directors adopted new bylaws in the form attached to the Plan of Conversion.

Results of Operations

Three and Nine Months Ended September 30, 2015, Compared to the Three and Nine Months Ended September 30, 2014

Net Sales

Overall, our net sales for the three and nine months ended September 30, 2015 increased approximately 70% and 41% respectively, from the comparable periods in 2014. The following table provides comparative data regarding the source of our net sales in each of these periods and the change from 2014 to 2015:

	Three Months Ended September 30, 2015					Three Months Ended September 30, 2014
	$		% of Total			$		% of Total			Variance
Sale of product		209,996		78	%		77,312		49	%		172	%
Service		59,652		22	%		81,235		51	%		-27	%
Total		269,648		100	%		158,547		100	%		70	%

	Nine Months Ended September 30, 2015					Nine Months Ended September 30, 2014
	$		% of Total			$		% of Total			Variance
Sale of product		400,080		68	%		274,427		66	%		46	%
Service		184,513		32	%		139,514		34	%		32	%
Total		584,593		100	%		413,941		100	%		41	%

Sales of product for the three and nine months ended September 30, 2015 increased approximately 172% and 46% respectively, as compared to the three and nine months ended September 30, 2014. The increase is primarily due to the Company acquiring jobs that required more products related to installations. Service revenue for the three and nine months ended September 30, 2015 decreased 27% and increased approximately 32% respectively, as compared to the three and nine months ended September 30, 2014. The decrease for the three months ended was primarily attributed to less labor intensive jobs for the three months ended September 30, 2015 compared to September 30, 2014. The increase for the nine months ended was primarily attributed to increased overall jobs for the nine months ended September 30, 2015 compared to September 30, 2014.

Net sales increased due to customers’ needs and the Company responding effectively to their orders. In an effort to continue to increase our sales in future periods, we believe we need to hire additional sales staff to initiate a telemarketing campaign and to obtain leads from various lead sources such as lead generating telemarketing lists, email marketing campaigns and other sources. However, given our lack of working capital, we cannot assure that we will ever be able to successfully implement our current business strategy or increase our revenues in future periods. Although we recognized increased sales during the three and nine months ended September 30, 2015, there can be no assurances that we will continue to recognize similar revenues in the future.

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Cost of Sales

Cost of product includes product and delivery costs relating to the sale of product revenue. Cost of services includes labor and installation for service revenue. Overall, cost of sales increased approximately 99% and decreased 10% respectively, for the three and nine months ended September 30, 2015 as compared to the three and nine months ended September 30, 2014. The following table provides comparative data regarding the breakdown of the cost of sales in each of these periods and the change from 2014 to 2015:

	Three Months Ended September 30, 2015					Three Months Ended September 30, 2014
	$		% of Total			$		% of Total			Variance
Cost of product		141,005		68	%		70,968		64	%		99	%
Cost of service		65,594		32	%		39,154		36	%		68	%
Total		206,599		100	%		110,122		100	%		88	%

	Nine Months Ended September 30, 2015					Nine Months Ended September 30, 2014
	$		% of Total			$		% of Total			Variance
Cost of product		198,207		59	%		219,287		64	%		-10	%
Cost of service		136,806		41	%		123,431		36	%		11	%
Total		335,013		100	%		342,718		100	%		-2	%

During the three and nine months ended September 30, 2015 our cost of product increased 99% and decreased 10% respectively, as compared to the three and nine months ended September 30, 2014. During the three and nine months ended September 30, 2015, our cost of services increased 68% and 11% respectively, as compared to the three and nine months ended September 30, 2014. The increase in cost of product and cost of service is in direct relation to the increase in sales. The decrease in the cost of product for the nine months ended September 30, 2015 compare to the nine months ended September 30, 2014 is due to better pricing received for products.

Total operating expenses for the three and nine months ended September 30, 2015 were $440,682 and $1,174,311 an increase of $195,900 or approximately 80% and a decrease of $44,749 or approximately (4%) respectively from total operating expenses for the comparable three and nine months and ended September 30, 2014 of $244,782 and $1,219,060, respectively. The increase in operating expenses for the three months ended September 30, 2015 compared to the three months ended September 30, 2014 is primarily attributed to an increase in marketing campaigns and public company expenses. The decrease in operating expenses for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 is primarily attributed to a decrease in non cash compensation in 2015.

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Loss from Operations

We reported a loss from operations of $377,633 and $924,731 respectively, for the three and nine months ended September 30, 2015 compared to a loss from operations of $196,357 and $1,147,837 respectively, for the three and nine months ended September 30, 2014. An increase of $181,276 and a decrease of $223,106 or 92% and (19%) respectively, for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014.

Other Income (Expenses)

Total other income (expense) was ($990,832) and ($1,450,748) for the three and nine months ended September 30, 2015 and total other income (expense) was $5,435,693 and total other expense was ($2,854,141) for the three and nine months ended September 30, 2014, respectively. An increase of other expense of $6,426,525 or 118% and a decrease in other expense of $1,403,393 or 49% for the three and nine months ended September 30, 2015 respectively, compared to the three and nine months ended September 30, 2014. The increase in other expense for the three months ended September 30, 2015 compared to September 30, 2014 is primarily attributable to the change in fair value of derivative liabilities. The decrease in other expense for the nine months ended September 30, 2015 compared to September 30, 2014 is primarily attributable to a change in fair value of derivative liability.

Net income (loss)

We reported a net loss of $1,368,465 and $2,375,479 for the three and nine months ended September 30, 2015 as compared to a net income of $5,239,336 and net loss of $4,001,978 for the three and nine months ended September 30, 2014. We reported a net income attributable to non-controlling interest of $44,862 and $94,798 for the three and nine months ended September 30, 2015 compared to a net loss attributable to non-controlling interest of $6,606 and a net loss of $15,388 respectively, during the three and nine months ended September 30, 2014.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. At September 30, 2015 we had a cash balance of $61,947 and a working capital deficit of $4,944,626.

We reported a net increase in cash for the nine months ended September 30, 2015 of $48,789 compared to December 31, 2014. While we currently have no material commitments for capital expenditures, at September 30, 2015 we owed approximately $127,000 under various notes payable and approximately $805,000 under convertible promissory notes. We do not presently have any external sources of working capital.

During the period ended June 30, 2012, the Company issued notes payable with an interest rate of 3% to the CFO amounting to $429,439 related to the accrued salaries. In July 2015 the Company repaid the CFO the note payable leaving the balance at $0 as of September 30, 2015.

At September 30, 2015 the Company owed $146,015 to Regal Capital, formerly a related party, which is due upon demand and bears 0% interest. The Company also owed Regal Capital $116,792 in notes payable which bear a 12% interest rate.

Accrued liabilities were $1,881,620 as of September 30, 2015 consist of the following:

● Accrued salaries for certain employees amounting to $1,237,098

● Accrued commissions for certain employees amounting to $60,590

● Sales tax payable of $56,890

● Lease abandonment charges of $164,375

● Accrued interest of $255,897

● Accrued payroll liabilities and taxes of $84,170

● Other rent expenses of $12,700

● Other accrued expenses of $9,900

On July 1, 2015, DirectView Holdings, Inc., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on July 1, 2015, the Company received $150,000 in funding from the Investor. The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

On July 15, 2015, DirectView Holdings, Inc., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on July 15, 2015, the Company received $150,000 in funding from the Investor. The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The July 1, 2015 and July 15, 2015 notes (the “Notes”) shall mature on July 1, 2016 and July 15, 2016 respectively (the “Maturity Dates”) and shall accrue interest at an annual rate equal to 10%. The Principal Amount and interest shall be paid on the Maturity Dates (or sooner as provided in the Notes), in cash or, in shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). In accordance with the terms of the Notes, the Investor shall be entitled to convert a portion or all of the Principal Amount and interest due and outstanding under the Note into shares of Common Stock equal to 70% of the lowest traded price in the prior thirty (30) trading days.

On August 12, 2015, DirectView Holdings, Inc., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,894. Pursuant to the Transaction Documents, on August 17, 2015 the Company received $150,000 in funding from the Investor (the “Closing Date”). The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. The Note and the SPA are part of a larger, $450,000 commitment received that will be released to the Company over a 60 day period subject to certain closing conditions.

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Related to the above mentioned SPA, on September 11, 2015, (the “Effective Date”), DirectView Holdings, Inc., a Nevada corporation (the “Company”), entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on September 11, 2015, the Company received $150,000 in funding from the Investor (the “Closing Date”). The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The August 12, 2015 and September 11, 2015 notes (the “Notes”) shall mature on August 12, 2016 and September 11, 2016 (the “Maturity Date”), respectively, and shall accrue interest at an annual rate equal to 10%. The principal amount and interest shall be paid on the Maturity Date (or sooner as provided in the Note), in cash or, in shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). In accordance with the terms of the Notes, the Investor shall be entitled to convert a portion or all of the Principal Amount and interest due and outstanding under the Note into shares of Common Stock equal to 60% of the lowest traded price in the prior thirty (30) trading days.

On July 23, 2015 the Company issued a convertible promissory note with a principal balance of $429,439 with a one year maturity date. This convertible debenture converts at 55% of the two lowest trading price during the 30 days prior to conversion. The proceeds from this note were used to pay certain accrued salaries and debts owned to the Company’s officers ad directors.

The preceding securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, and manner of the offering and number of securities offered. The Company did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, the Investor had the necessary investment intent as required by Section 4(a)(2) of the Securities Act since they agreed to, and received, the securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.

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Our net sales are not sufficient to fund our operating expenses. We will need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We reported a net loss of $2,375,479 during the nine months ended September 30, 2015. At September 30, 2015 we had a working capital deficit of $4,944,626. We do not anticipate we will be profitable in 2015. Therefore our operations will be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. The trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. Furthermore we have debt obligations, which must be satisfied. If we are successful in securing additional working capital, we intend to increase our marketing efforts to grow our revenues. We do not presently have any firm commitments for any additional capital and our financial condition as well as the uncertainty in the capital markets may make our ability to secure this capital difficult. There are no assurances that we will be able to continue our business, and we may be forced to cease operations in which event investors could lose their entire investment in our company. Included in our notes to the financial statements for the year ended December 31, 2014 is a discussion regarding Going Concern.

Contractual Obligations

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows.

The following table summarizes our contractual obligations as of September 30, 2015, and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

	Payments Due by Period
	Total		Less than 1 year		1-3 Years		4-5 Years		5 Years +
Contractual Obligations:
Short term loans- unrelated party	$	146,015		146,015		—		—		—
Short term loans- related party	$	15,144		15,144		—		—		—
Operating Leases	$	164,375		164,375		—		—		—
Purchase Obligations	$	—		—		—		—		—
Total Contractual Obligations:	$	325,534		325,534		—		—		—

Critical Accounting Policies and Estimates

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management’s applications of accounting policies. Critical accounting policies for our company include revenue recognition and accounting for stock based compensation, use of estimates, accounts receivable, property and equipment and income taxes.

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Revenue Recognition

We follow the guidance of the Securities and Exchange Commission’s Staff Accounting Bulletin 104 for revenue recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectibility is reasonably assured. When a customer order contains multiple items such as hardware, software, and services which are delivered at varying times, we determine whether the delivered items can be considered separate units of accounting. Delivered items should be considered separate units of accounting if delivered items have value to the customer on a standalone basis, there is objective and reliable evidence of the fair value of undelivered items, and if delivery of undelivered items is probable and substantially in our control. The following policies reflect specific criteria for our various revenues streams:

● Revenue is recognized upon completion of conferencing services. We generally do not charge up-front fees and bill our customers based on usage.

● Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation.

● Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectability of the related receivable is probable.

Stock Based Compensation

In December 2004, the Financial Accounting Standards Board, or FASB, issued FASB ASC Topic 718: Compensation – Stock Compensation (“ASC 718”). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under ASC 718. Upon adoption of ASC 718, the Company elected to value employee stock options using the Black-Scholes option valuation method that uses assumptions that relate to the expected volatility of the Company’s common stock, the expected dividend yield of our stock, the expected life of the options and the risk free interest rate. Such compensation amounts, if any, are amortized over the respective vesting periods or period of service of the option grant.

Use of Estimates

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Account Receivable

We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in existing accounts receivable. We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Property and Equipment

Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.

Income Taxes

Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). It requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and we intend to settle our current tax assets and liabilities on a net basis.

Pursuant to accounting standards related to the accounting for uncertainty in income taxes, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on our financial statements.

Recent Accounting Pronouncements and Adoption of New Accounting Principles

There are no recent accounting pronouncements or new accounting principles that have an effect on the Company’s financial statements.

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Off Balance Sheet Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management, including Roger Ralston, our chief executive officer, and Michele Ralston, our chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2015.

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based on that evaluation, our management, including Roger Ralston, our Chief Executive Officer, and Michele Ralston, our Chief Financial Officer, concluded that because of the significant deficiencies in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of September 30, 2015.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(F) and 15d-15(F) under the Securities Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) on an annual basis. As previously reported on our Form 10-K for the year ended December 31, 2014, management identified significant deficiencies related to (i) our internal audit functions and (ii) a lack of segregation of duties within accounting functions.

Management has determined that our internal audit function is significantly deficient due to insufficient qualified resources to perform internal audit functions.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals.

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We believe that the foregoing steps will remediate the material weaknesses identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate. Due to the nature of these material weaknesses in our internal control over financial reporting, there is more than a remote likelihood that misstatements which could be material to our annual or interim financial statements could occur that would not be prevented or detected.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS.

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on April 15, 2015.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On July 1, 2015, the Company entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on July 1, 2015, the Company received $150,000 in funding from the Investor. The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

On July 15, 2015, the Company entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on July 15, 2015, the Company received $150,000 in funding from the Investor. The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The July 1, 2015 and July 15, 2015 notes (the “Notes”) shall mature on July 1, 2016 and July 15, 2016 respectively (the “Maturity Dates”) and shall accrue interest at an annual rate equal to 10%. The Principal Amount and interest shall be paid on the Maturity Dates (or sooner as provided in the Notes), in cash or, in shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). In accordance with the terms of the Notes, the Investor shall be entitled to convert a portion or all of the Principal Amount and interest due and outstanding under the Note into shares of Common Stock equal to 70% of the lowest traded price in the prior thirty (30) trading days.

On August 12, 2015, the Company entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,894. Pursuant to the Transaction Documents, on August 17, 2015 the Company received $150,000 in funding from the Investor (the “Closing Date”). The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. The Note and the SPA are part of a larger, $450,000 commitment received that will be released to the Company over a 60 day period subject to certain closing conditions.

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Related to the above mentioned SPA, on September 11, 2015 (the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “SPA”) to issue and sell a 5% Original Issue Discount Convertible Promissory Note (the “Note” and together with the SPA, the “Transaction Documents”) to an institutional investor (the “Investor”), in the principal amount of $157,895 (the “Principal Amount”). Pursuant to the Transaction Documents, on September 11, 2015, the Company received $150,000 in funding from the Investor (the “Closing Date”). The Company’s issuance of the securities to the Investor pursuant to the SPA are exempt from registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.

The August 12, 2015 and September 11, 2015 notes (the “Notes”) shall mature on August 12, 2016 and September 11, 2016 (the “Maturity Date”), respectively, and shall accrue interest at an annual rate equal to 10%. The principal amount and interest shall be paid on the Maturity Date (or sooner as provided in the Note), in cash or, in shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). In accordance with the terms of the Notes, the Investor shall be entitled to convert a portion or all of the Principal Amount and interest due and outstanding under the Note into shares of Common Stock equal to 60% of the lowest traded price in the prior thirty (30) trading days.

On July 23, 2015 the Company issued a convertible promissory note with a principal balance of $429,439 with a one year maturity date. This convertible debenture converts at 55% of the two lowest trading price during the 30 days prior to conversion. The proceeds from this note were used to pay certain accrued salaries and debts owned to the Company’s officers ad directors.

The preceding securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, and manner of the offering and number of securities offered. The Company did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, the Investor had the necessary investment intent as required by Section 4(a)(2) of the Securities Act since they agreed to, and received, the securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.

Other than as disclosed above, there were no unregistered sales of the Company’s equity securities during the quarter ended September 30, 2015 that were not previously disclosed in a current report on Form 8-K, or Quarterly report on Form 10-Q.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

Not Applicable.

34

ITEM 6. EXHIBITS

Exhibit No.	Description
31.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
31.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**

*	Filed herewith
**	In accordance with Regulation S-T, the XBRL related information on Exhibit No. 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” herewith not “filed”.

35

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DIRECTVIEW HOLDINGS, INC.
Date: November 19, 2015	By:	/s/ Roger Ralston
		Roger Ralston
		Chief Executive Officer Principal Executive Officer
Date: November 19, 2015	By:	/s/ Michele Ralston
		Michele Ralston
		Chief Financial Officer Principal Financial Officer

36

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Roger Ralston, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DirectView Holdings, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 19, 2015	By:	/s/ Roger Ralston
		Roger Ralston Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Michele Ralston, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DirectView Holdings, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 19, 2015	By:	/s/ Michele Ralston
		Michele Ralston Principal Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of DirectView Holdings, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2015, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Roger Ralston, Principal Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended September 30, 2015, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2015, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2015	By:	/s/ Roger Ralston
		Roger Ralston
		Principal Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of DirectView Holdings, Inc. (the “Company”), on Form 10-Q for the period ended September 30, 2015, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Michelle Ralston, Principal Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	Such Quarterly Report on Form 10-Q for the period ended September 30, 2015, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2015, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2015	By:	/s/ Michelle Ralston
		Michelle Ralston
		Principal Financial Officer

XML

Derivative Liability - Reconciliation of Derivative Liability Measured at Fair Value Recurring Basis Using Significant Unobservable Inputs (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Conversion feature derivative liability, Beginning	$ 1,462,984
Recognition of initial derivative liability	2,391,458
Reclass of derivative liability to additional paid in capital due to conversions	(1,196,842)
Change in fair value included in earnings	(518,096)
Conversion feature derivative liability, Ending	$ 2,139,504

XML

Short Term Advances (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Short term advances	$ 146,015	$ 146,015

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Derivative Liability (Tables)

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Reconciliation of Derivative Liability Measured at Fair Value Recurring Basis Using Significant Unobservable Inputs

The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December 31, 2014 to September 30, 2015:

	Conversion feature derivative liability
Balance at December 31, 2014	$	1,462,984
Recognition of initial derivative liability		2,391,458
Reclass of derivative liability to additional paid in capital due to conversions		(1,196,842	)
Change in fair value included in earnings		(518,096	)
Balance at September 30, 2015	$	2,139,504

Assumptions for Determining Fair Value of Convertible Instruments

The Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model:

	September 30, 2015
Expected volatility		192 % - 305	%
Expected term		3 – 12 months
Risk-free interest rate		0.0 2% - 0.09	%
Expected dividend yield		0	%

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Related Party Transactions (Details Narrative) - USD ($)		1 Months Ended		2 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Nov. 30, 2009	Jul. 31, 2015	Mar. 31, 2015	Aug. 31, 2015	Sep. 30, 2015	Jun. 30, 2012	Jun. 30, 2015	Sep. 30, 2015	Dec. 31, 2007	Dec. 31, 2006	May. 31, 2015	Dec. 31, 2014	Nov. 30, 2014	Oct. 31, 2013	Dec. 31, 2012	Jun. 30, 2010	Jun. 30, 2009
Accrued interest due to related parties included in accrued expenses					$ 82,395			$ 82,395
Debt interest rate	6.00%
Loan mature date	May 31, 2010
Principal of notes payable					9,900			9,900				$ 9,900		$ 10,100
Accrued interest					60,600			60,600				43,900	$ 5,000
Borrowed during period					146,015			146,015				146,015
Principal of notes payable	$ 20,000				126,692			126,692				176,692
Principal officer [Member]
Due to officers loan					4,189			4,189	$ 39,436	$ 14,400		4,716
Debt interest rate									3.00%	3.00%
Loan mature date									Jul. 31, 2010	Jul. 31, 2010
Principal of notes payable							$ 16,881				$ 16,881
Repaid the remaining balance					35,465
Due to related parties					0			0				52,347
Chief Executive Officer [Member]
Accrued interest due to related parties included in accrued expenses			$ 13,819									21,999
Due to officers loan			$ 20,984		2,484			2,484
Debt interest rate																12.00%
Principal of notes payable					0			0							$ 11,157
Repaid the remaining balance				$ 10,843			10,907	140,330
Due to related parties					15,144			15,144				163,320
Accrued interest					29,728			29,728				21,999
Borrowed during period					3,412		2,484	3,412
Principal of notes payable					0			0				10,843					$ 22,000
Common stock shares issued during period for retirement			100,000,000
Common stock issued during period for retirement			$ 10,000
Chief Financial Officer [Member]
Principal of notes payable					0			0				429,439
Repaid the remaining balance		$ 429,439					$ 8,119
Accounts payable to related party					$ 0			$ 0				$ 8,119
Accrued salaries						$ 429,439

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Convertible Promissory Notes - Schedule of Convertible Promissory Notes (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Debt Disclosure [Abstract]
Secured convertible promissory notes	$ 1,856,804	$ 720,269
debt discount liability	(1,002,387)	(124,527)
debt discount original issue discount	(42,759)	(16,296)
debt discount deferred financing	(7,062)	(20,417)
Secured convertible promissory notes - net	$ 804,596	$ 559,029

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Notes Payable

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Notes Payable

NOTE 4 – NOTES PAYABLE

In November 2009, the Company issued unsecured notes payable of $20,000. The note is payable either in cash or security equivalent at the option of the Company. In the event the Company repays this note in shares of the Company’s common stock the rate is $0.05 per share. The note payable bears 6% interest per annum and matured in May 2010. In January 2010, this note was satisfied by issuing a note payable to another unrelated party with the same terms and conditions except for its maturity date changed to January 2011. The note is in default as of June 30, 2015 and as of December 31, 2014. In October 2013 $10,100 was assigned to a different note holder. The new note is included in Notes Payable. The remaining balance of this note is $9,900 as of September 30, 2015 and as of December 31, 2014.

During the year ended December 31, 2012, the Company entered into demand notes with Regal Capital (formerly a related party) totaling $116,792 bearing interest at 12% per annum. As of September 30, 2015 and December 31, 2014 the notes amounted to $116,792 and $116,792 respectively.

In November 2014, the Company issued a Demand Promissory Note of $50,000 due December 22, 2014. The interest rate is 10% with a minimum guaranteed interest amount of $5,000. The Note Holder granted the Company an extension of due date making the note due January 22, 2015. The note was satisfied in March 2015. As of September 30, 2015 and December 31, 2014 the notes amounted to $0 and $50,000 respectively.

As of September 30, 2015 and December 31, 2014, notes payable amounted to $126,692 and $176,692, respectively.

Accrued interest on the notes payable amounted to approximately $60,600 and $43,900 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses.

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Barter Revenue (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Barter Revenue Details Narrative
Barter revenue	$ 18,047	$ 5,893

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Going Concern Considerations (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Going Concern Considerations
Accumulated deficit	$ 21,116,049		$ 21,116,049		$ 18,645,772
Stockholders' deficit	4,926,007		4,926,007		$ 4,619,984
Working capital deficiency	4,944,626		4,944,626
Net loss	$ 1,368,465	$ (5,239,336)	2,375,479	$ 4,001,978
Net cash used in operating activities			808,217	415,803
Net cash used in investing activities			$ 14,453	$ 12,448

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Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Concentrations of Credit Risk and Major Customers (Details) (Parenthetical)	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	74.00%		73.00%
3 Customers [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers			73.00%
4 Customer [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	74.00%
Revenue [Member]
Concentrations of Credit Risk and Major Customers	60.00%
Revenue [Member] | 3 Customers [Member]
Concentrations of Credit Risk and Major Customers	60.00%
Revenue [Member] | 1 Customers [Member]
Concentrations of Credit Risk and Major Customers		61.00%

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Accrued Payroll Taxes (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Aug. 31, 2013
Accrued Payroll Taxes
Payroll taxes includes interest and penalties	$ 84,000	$ 110,000
Paid outstanding payroll tax liabilities	$ 28,281		$ 43,176

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Property and Equipment (Details Narrative)	9 Months Ended		13 Months Ended	14 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Aug. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2014 USD ($) ft²
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 5,270	$ 1,556
Leasehold improvements	$ 26,901		$ 26,901	$ 14,453	$ 12,448	$ 12,448
Straight-line basis lease commitmet period				2 years
Lease commencing term	July 2014 and August 2015
Area of office space leased | ft²						3,000
Accrued rent expense	$ 5,500		$ 5,500

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Aug. 31, 2015	Dec. 31, 2014	Jun. 30, 2014
Leasehold Improvements	$ 26,901	$ 14,453	$ 12,448	$ 12,448
Less: Accumulated amortization	(8,382)		(3,112)
Furniture and fixtures	2,771		2,771
Less: Accumulated depreciation	(2,771)		(2,771)
Property Plant and Equipment Net	$ 18,519		$ 9,336
Leasehold Improvements [Member]
Estimated Life	2 years
Furniture And Fixtures[Member]
Estimated Life	3 years

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Property and Equipment

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	Estimated life	September 30, 2015			December 31, 2014
Leasehold Improvements	2 years	$	26,901		$	12,448
Less: Accumulated amortization			(8,382	)		(3,112	)
Furniture and fixtures	3 years		2,771			2,771
Less: Accumulated depreciation			(2,771	)		(2,771	)
		$	18,519		$	9,336

For the nine months ended September 30, 2015 and 2014, depreciation and amortization expense amounted to $5,270 and $1,556 respectively.

In June 2014 the Company negotiated to lease office space and made leasehold improvements totaling $12,448. In August 2015 the Company made leasehold improvements totaling $14,453. The Company will amortize the balance on a straight-line basis for the term of 2 years commencing in July 2014 and August 2015.

In 2014 the Company took occupancy of approximately 3,000 square feet of office space in New York city. The Company negotiated lease terms and has recorded rent expense of $5,500 per month for the period of September 1, 2014 through September 30, 2015 totaling accrued rent of $5,500 related to this office space.

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Notes Payable (Details Narrative)	Nov. 30, 2014 USD ($)	Nov. 30, 2009 USD ($) $ / shares	Sep. 30, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares	Oct. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)
Unsecured notes payable		$ 20,000	$ 126,692	$ 176,692
Common stock, per share | $ / shares		$ 0.05	$ 0.0001	$ 0.0001
Note payable bears interest rate		6.00%
Note payable mature date		May 31, 2010
Note payable assigned to different note holder			$ 9,900	$ 9,900	$ 10,100
Demand notes	$ 50,000		0	50,000
Demand notes bearing interest rate	0.10
Demand promissory note due	Jan. 22, 2015
Accrued interest on notes payable	$ 5,000		60,600	43,900
Accrued expenses			60,600	43,900
Regal Capital [Member]
Demand notes			$ 116,792	$ 116,792		$ 116,792
Demand notes bearing interest rate						0.12

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Derivative Liability - Assumptions for Determining Fair Value of Convertible Instruments (Details)	9 Months Ended
	Sep. 30, 2015
Expected dividend yield	0.00%
Minimum [Member]
Expected volatility	192.00%
Expected term	3 months
Risk-free interest rate	0.02%
Maximum [Member]
Expected volatility	305.00%
Expected term	12 months
Risk-free interest rate	0.09%

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Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash	$ 61,947	$ 13,158
Accounts Receivable - net	278,869	60,014
Other Current Assets	13,282	1,659
Total Current Assets	354,098	74,831
PROPERTY AND EQUIPMENT - Net	18,519	9,336
OTHER ASSETS	100	796
Total Assets	372,717	84,963
CURRENT LIABILITIES:
Convertible Promissory Notes, net of debt discounts	804,596	559,029
Short Term Advances	146,015	146,015
Notes Payable	126,692	176,692
Accounts Payable	185,153	131,020
Accrued Expenses	1,881,620	1,565,139
Due to Related Parties	15,144	664,068
Derivative Liability	2,139,504	1,462,984
Total Current Liabilities	5,298,724	4,704,947
Total Liabilities	5,298,724	4,704,947
STOCKHOLDERS' DEFICIT:
Preferred Stock ($0.0001 Par Value; 5,000,000 Shares Authorized; None Issued and Outstanding)	0	0
Common Stock ($0.0001 Par Value; 1,000,000,000 Shares Authorized; 387,242,229 and 14,440,933 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively)	38,724	1,444
Additional Paid-in Capital	16,086,954	14,054,779
Accumulated Deficit	(21,116,049)	(18,645,772)
Total DirectView Holdings, Inc. Stockholders' Deficit	(4,990,371)	(4,589,549)
Non-Controlling Interest in Subsidiary	64,364	(30,435)
Total Stockholders' Deficit	(4,926,007)	(4,619,984)
Total Liabilities and Stockholders' Deficit	$ 372,717	$ 84,963

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Subsequent Events (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Nov. 30, 2014
Common stock issued	387,242,229	14,440,933
Accrued interest	$ 60,600	$ 43,900	$ 5,000
Subsequent Event [Member]
Common stock issued	40,088,776
Convertible promissory notes	$ 46,250
Accrued interest	$ 2,625
Subsequent Event [Member] | Minimum [Member]
Notes converted at contractual rates	$ .00116
Subsequent Event [Member] | Maximum [Member]
Notes converted at contractual rates	$ .0023

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Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

DirectView Holdings, Inc., (the “Company”), was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and incorporated in the state of Nevada.

The Company has the following four subsidiaries: DirectView Video Technologies Inc., DirectView Security Systems Inc., Ralston Communication Services Inc., and Meeting Technologies Inc.

The Company is a full-service provider of teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. The Company’s primary focus is to provide high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance.

Basis of Presentation

The unaudited consolidated financial statements include the accounts of the Company, three wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting interest of approximately 58% (the other 42% is owned by non-controlling interests, including 23% which is owned by the Company’s CEO who is a majority shareholder of the Parent Company) as of September 30, 2015. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on April 15, 2015.

In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2015, and the results of operations and cash flows for the nine months ending September 30, 2015 have been included. The results of operations for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year.

All share and per share amounts have been presented to give retroactive effect to a 1 for 30 reverse stock split that occurred in March 2015.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property and equipment, valuation of beneficial conversion features on convertible debt and the assumptions used to calculate derivative liabilities.

Non-controlling Interests in Consolidated Financial Statements

The Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51,” (“SFAS No. 160”). This statement clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of September 30, 2015, the Company reflected a non-controlling interest of $64,364 in connection with our majority-owned subsidiary, DirectView Security Systems Inc. as reflected in the accompanying consolidated balance sheets.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Fair Value of Financial Instruments

The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2015 and December 31, 2014. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate.

Accounts Receivable

The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2015 and December 31, 2014, management determined that an allowance is necessary which amounted to $38,000 at both dates. During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company recognized $0 and $20,500 respectively of expenses related to uncollectible accounts receivable.

Advertising

Advertising is expensed as incurred. Advertising expenses for the nine months ended September 30, 2015 and 2014 was $267,790 and $112,803, respectively.

Shipping costs

Shipping costs are included in other selling, general and administrative expenses and was deemed to be not material for the nine months ended September 30, 2015 and 2014, respectively.

Inventories

Inventories, consisting of finished goods related to our products are stated at the lower of cost or market utilizing the first-in, first-out method. The Company acquires inventory for specific installation jobs. As a result, the Company orders inventory only as needed for installations and there was an insignificant amount of inventory on hand at September 30, 2015 and December 31, 2014.

Property and equipment and Leasehold Improvements

Property and equipment and leasehold improvements are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line basis over the term of the lease.

Impairment of Long-Lived Assets

Long-Lived Assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets”. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not consider it necessary to record any impairment charges during the nine months ended September 30, 2015 and 2014.

Income Taxes

Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized.

Pursuant to ASC Topic 740-10: Income Taxes related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements.

Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. The Company recorded stock based compensation expense of $44,100 and $431,600 during the nine months ended September 30, 2015 and 2014, respectively.

Revenue recognition

The Company follows the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials. The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectibility is reasonably assured. When a customer order contains multiple items such as hardware, software, and services which are delivered at varying times, the Company determines whether the delivered items can be considered separate units of accounting. Delivered items should be considered separate units of accounting if delivered items have value to the customer on a standalone basis, there is objective and reliable evidence of the fair value of undelivered items, and if delivery of undelivered items is probable and substantially in the Company’s control.

The following policies reflect specific criteria for the various revenues streams of the Company:

Revenue is recognized upon completion of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage.

Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation.

Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectibility of the related receivable is probable.

Cost of sales includes cost of products and cost of service. Product cost includes the cost of products and freight costs. Cost of services includes labor and fuel expenses.

Concentrations of Credit Risk and Major Customers

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

During the nine months ended September 30, 2015, three customers accounted for 60% of revenues. The following is a list of percentage of revenue generated by the three customers:

Customer 1	13	%
Customer 2	22	%
Customer 3	25	%
Total	60	%

During the nine months ended September 30, 2014, one customer accounted for 61% of revenues.

As of September 30, 2015, four customers accounted for 74% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers:

Customer 1	10	%
Customer 2	12	%
Customer 3	16	%
Customer 4	36	%
Total	74	%

As of December 31, 2014, three customers accounted for 73% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:

Customer 1	16	%
Customer 2	26	%
Customer 3	31	%
Total	73	%

Related Parties

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Net Loss per Common Share

Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. At September 30, 2015 the Company had 691,296,462 shares equivalent issuable pursuant to embedded conversion features. At December 31, 2014, the Company had 69,694,188 shares equivalent issuable pursuant to embedded conversion features.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on the results of operations, financial condition or cash flow.

XML

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Operating Expenses	$ 22,600	$ 8,700
Lease Abandonment	164,375	164,375
Employee Commissions	60,590	60,590
Interest	255,897	213,473
Salaries	1,237,098	981,908
Sales Tax Payable	56,890	25,674
Payroll Liabilities	84,170	110,419
Total	$ 1,881,620	$ 1,565,139

XML

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	Estimated life	September 30, 2015			December 31, 2014
Leasehold Improvements	2 years	$	26,901		$	12,448
Less: Accumulated amortization			(8,382	)		(3,112	)
Furniture and fixtures	3 years		2,771			2,771
Less: Accumulated depreciation			(2,771	)		(2,771	)
		$	18,519		$	9,336

XML

Convertible Promissory Notes (Details Narrative) - USD ($)																				1 Months Ended													3 Months Ended				6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 11, 2015	Aug. 12, 2015	Jul. 23, 2015	Jul. 15, 2015	Jul. 02, 2015	Jun. 15, 2015	Jun. 05, 2015	May. 31, 2015	May. 27, 2015	May. 15, 2015	May. 05, 2015	Apr. 08, 2015	Feb. 11, 2015	Dec. 29, 2014	Dec. 19, 2014	Oct. 27, 2014	Oct. 08, 2014	Apr. 11, 2014	Nov. 30, 2009	Sep. 30, 2015	Aug. 31, 2015	Jul. 31, 2015	Jun. 30, 2015	May. 31, 2015	Apr. 30, 2015	Mar. 31, 2015	Feb. 28, 2015	Jan. 31, 2015	Apr. 30, 2014	Mar. 31, 2014	Jul. 31, 2013	Jun. 30, 2013	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2009	Dec. 31, 2015	Nov. 30, 2014	Oct. 31, 2014	Oct. 30, 2014	Jan. 16, 2014	Dec. 31, 2013	Dec. 11, 2013	Oct. 10, 2013	Aug. 30, 2013	May. 31, 2013	Apr. 02, 2011	Dec. 31, 2008
Note payable mature date																			May 31, 2010
Debt discount amount																				$ 42,759													$ 42,759					$ 42,759		$ 16,296
Note payable bears interest rate																			6.00%
Principal of notes payable																			$ 20,000	126,692													126,692					126,692		176,692
Principal balance of note payable																			$ 20,000	126,692													126,692					126,692		176,692
Original issue discount																																						272,386	$ 17,301
Accrued interest																				60,600													60,600					60,600		43,900			$ 5,000
Amortization of debt discount																																	300,454			$ 98,750		475,654	$ 213,603
April through June 2015 [Member]
Principal of notes payable																				265,281													265,281					265,281
Principal balance of note payable																				265,281													265,281					265,281
Accrued interest																				959													959					959
Unsecured Notes [Member]
Reclassified unsecured notes payable from long-term to short-term																																									$ 45,000
Percentage of reclassified unsecured notes payable from long-term to short-term																																									3.00%
Interest per annum based on default provision																																									12.00%
Common shares conversion price																														$ 0.0001		$ 0.0001																			$ 0.0001
Debt discount amount																																															$ 45,000
Note holder converted into common shares, amount																														$ 990		$ 764
Note holder assigned note balance to third party																																													$ 20,000
Unsecured note payable																				23,246													23,246					23,246		43,246
Unsecured Notes [Member] | Minimum [Member]
Note payable mature date																																									Jan. 31, 2010
Unsecured Notes [Member] | Maximum [Member]
Note payable mature date																																									Apr. 30, 2010
Senior Secured Promissory Notes [Member]
Common shares conversion price								$ 0.003																$ 0.003						$ 0.003																					$ 0.0001		$ 0.50
Debt discount amount																																															$ 17,000
Note holder converted into common shares, amount																								$ 15,246						$ 990	$ 764
Unsecured note payable																				0													0					0		15,246
Senior secured promissory notes																																																					$ 85,500
Note payable bears interest rate																																																				8.00%
Reclassified balance of notes convertible promissory notes from notes payable																															$ 17,000
Note holder converted into common shares																															254,667
Convertible Debenture One [Member]
Common shares conversion price																							$ 0.00096						$ 0.0001					$ 0.00096			$ 0.00096													$ 0.0001
Note holder converted into common shares, amount																							$ 6,500						$ 1,500
Note payable bears interest rate																																																		6.00%
Convertible debenture																				0													0					0				$ 0								$ 8,000
Convertible Debenture Two [Member]
Common shares conversion price																																																	$ 0.00075
Debt discount amount																																																	$ 8,333
Note payable bears interest rate																																																	6.00%
Convertible debenture																				10,000													10,000					10,000		10,000									$ 10,000
Derivative liability and offsetting debt discount																				8,333													8,333					8,333
Convertible Debenture Three [Member]
Common shares conversion price																																																$ 0.0008
Note payable bears interest rate																																																6.00%
Convertible debenture																				25,000													25,000					25,000		25,000								$ 25,000
Derivative liability and offsetting debt discount																																																$ 23,958
Convertible Debenture Four [Member]
Debt discount amount																																														$ 25,000
Note payable bears interest rate																																														6.00%
Convertible debenture																				25,000													25,000					25,000		25,000						$ 25,000
Derivative liability and offsetting debt discount																																														51,848
Derivative liability																																														$ 26,848
Percenatge of convertible debenture converts at lower price rate																																														50.00%
Convertible Debenture Five [Member] | Three Notes [Member]
Common shares conversion price																														$ .0175
Note payable bears interest rate																														8.00%
Convertible debenture																				150,000										$ 50,000			150,000					150,000		150,000
Convertible Debenture Six [Member]
Common shares conversion price																		$ 0.0175
Debt discount amount																		$ 271,285
Note holder converted into common shares, amount																																		$ 171,961	$ 47,651
Note payable bears interest rate																		8.00%
Note holder converted into common shares																																		104,386,160	4,918,166
Convertible debenture																		$ 367,754					6,142											$ 6,142			$ 6,142			300,754
Derivative liability																		266,285
Net of debt discount and deferred financing																																					0			240,820
Original issue discount																		$ 28,965
Convertible Debenture Six [Member] | Third Party One [Member]
Principal of notes payable																																								25,000
Principal balance of note payable																																								25,000
Convertible Debenture Six [Member] | Third Party Two [Member]
Principal of notes payable																											$ 25,000
Principal balance of note payable																											25,000
Convertible Debenture Six [Member] | Third Party Three [Member]
Principal of notes payable																											50,000
Principal balance of note payable																											50,000
Convertible Debenture Six [Member] | Minimum [Member] | January through March 2015 [Member]
Common shares conversion price																		$ 0.0072
Convertible Debenture Six [Member] | Minimum [Member] | April through June 2015 [Member]
Common shares conversion price																		0.00186
Convertible Debenture Six [Member] | Maximum [Member] | January through March 2015 [Member]
Common shares conversion price																		0.027
Convertible Debenture Six [Member] | Maximum [Member] | April through June 2015 [Member]
Common shares conversion price																		$ 0.00216
Convertible Debenture Seven [Member]
Common shares conversion price																						$ 0.00258
Debt discount amount																	$ 75,000			0													0					0		3,130
Note holder converted into common shares, amount								$ 15,000
Note payable bears interest rate																	8.00%
Note holder converted into common shares								9,722,222														26,373,441
Convertible debenture																	$ 81,522			0		$ 66,522											0					0		81,522
Derivative liability																	$ 84,250
Net of debt discount and deferred financing																																						0		3,130
Convertible debenture converts at lower price																	$ 0.0025
Percenatge of convertible debenture converts at lower price rate																	60.00%
Convertible debenture trading price period																	25 days
Original issue discount																	$ 6,522
Convertible Debenture Seven [Member] | Third Party [Member]
Senior secured promissory notes																	$ 15,000
Convertible Debenture Seven [Member] | Minimum [Member]
Common shares conversion price								$ 0.0012																$ 0.0012
Convertible Debenture Seven [Member] | Maximum [Member]
Common shares conversion price								0.00216																$ 0.00216
Convertible Debenture Eight [Member]
Debt discount amount																$ 18,400
Note payable bears interest rate																8.00%
Convertible debenture																$ 21,600				21,600													21,600					21,600		21,600
Derivative liability																$ 311,662
Net of debt discount and deferred financing																																						19,933		4,934
Convertible debenture converts at lower price																$ 0.0025
Percenatge of convertible debenture converts at lower price rate																60.00%
Convertible debenture trading price period																25 days
Original issue discount																$ 1,600
Convertible Debenture Eight [Member]
Common shares conversion price																					$ 0.0027					$ 0.0072									$ 0.0072
Debt discount amount															$ 5,017					26,189													26,189					26,189		20,926
Note holder converted into common shares, amount																					$ 156					$ 1,220
Unsecured note payable																				0													0					0
Note payable bears interest rate															8.00%
Note holder converted into common shares																					2,900,325					4,844,633
Convertible debenture															$ 27,174					27,174	$ 7,625												27,174					27,174		27,174
Derivative liability															$ 5,017
Net of debt discount and deferred financing																																						26,189		20,926
Convertible debenture converts at lower price															$ 0.0025
Percenatge of convertible debenture converts at lower price rate															60.00%
Convertible debenture trading price period															25 days
Original issue discount															$ 2,000
Convertible note holder assigned to another note holder															$ 25,000											$ 4,125									$ 4,125
Accrued interest																					$ 50					$ 3,375									$ 3,375
Convertible Debenture Eight [Member] | April through May 2015 [Member]
Note holder converted into common shares, amount																																						7,320
Unsecured note payable																				7,320													7,320					$ 7,320
Note holder converted into common shares																																						37,148,448
Convertible note holder assigned to another note holder																				38,250													38,250					$ 38,250
Accrued interest																				909													909					909
Convertible Debenture Eight [Member] | Another Note Holder [Member]
Common shares conversion price															$ 0.0162
Note holder converted into common shares, amount														$ 10,773													$ 13,831
Note holder converted into common shares														664,973													4,619,339
Convertible debenture																				0													0					0		14,227
Convertible note holder assigned to another note holder															$ 25,000
Convertible Debenture Eight [Member] | Third Party [Member]
Common shares conversion price																										$ 0.001		$ 0.003							$ 0.001
Note holder converted into common shares, amount																								$ 17,200	$ 17,200	$ 1,300		$ 1,000
Unsecured note payable																				$ 4,989													$ 4,989					$ 4,989		$ 24,489
Note holder converted into common shares																								13,900,000	13,900,000	1,300,000		333,333
Convertible debenture																											$ 50,000
Convertible note holder assigned to another note holder																																												$ 20,000
Accrued interest																																												$ 4,489
Convertible Debenture Eight [Member] | Minimum [Member] | April through May 2015 [Member]
Common shares conversion price																				$ 0.00096													$ 0.00096					$ 0.00096
Convertible Debenture Eight [Member] | Minimum [Member] | Another Note Holder [Member]
Common shares conversion price																											$ 0.0054
Convertible Debenture Eight [Member] | Minimum [Member] | Third Party [Member]
Common shares conversion price								0.0008																$ 0.0008	$ 0.0008
Convertible Debenture Eight [Member] | Maximum [Member] | Another Note Holder [Member]
Common shares conversion price																											$ 0.027
Convertible Debenture Eight [Member] | Maximum [Member] | April through May 2015 [Member]
Common shares conversion price																				0.075													0.075					0.075
Convertible Debenture Eight [Member] | Maximum [Member] | Third Party [Member]
Common shares conversion price								$ 0.00156																$ 0.00156	$ 0.00156
Convertible Debenture Ten [Member]
Common shares conversion price																				$ 0.00138	$ 0.00138												$ 0.00138					$ 0.00138
Debt discount amount													$ 50,348
Note holder converted into common shares, amount																				$ 24,000	$ 10,000
Unsecured note payable																				$ 24,696													$ 24,696					$ 24,696
Note payable bears interest rate													8.00%
Note holder converted into common shares																				17,391,304	7,246,377
Convertible debenture													$ 54,348										$ 58,696											$ 58,696			$ 58,696
Derivative liability and offsetting debt discount													119,940
Derivative liability													$ 69,940
Convertible debenture converts at lower price													$ 0.0025
Percenatge of convertible debenture converts at lower price rate													60.00%
Convertible debenture trading price period													25 days
Original issue discount													$ 4,000
Accrued interest													$ 4,348
Convertible Debenture Eleven [Member]
Debt discount amount												$ 50,000
Note payable bears interest rate												5.00%
Convertible debenture												$ 52,500								$ 52,500													52,500					52,500
Derivative liability and offsetting debt discount												86,506
Derivative liability												36,506
Net of debt discount and deferred financing												$ 5,000																										23,750
Percenatge of convertible debenture converts at lower price rate												55.00%
Convertible debenture trading price period												25 days
Original issue discount												$ 2,500
Convertible Debenture Tweleve [Member]
Debt discount amount											$ 110,000
Note payable bears interest rate											5.00%
Convertible debenture											$ 115,789									115,789													115,789					115,789
Derivative liability and offsetting debt discount											147,775
Derivative liability											37,775
Net of debt discount and deferred financing											$ 10,000																											37,171
Percenatge of convertible debenture converts at lower price rate											70.00%
Convertible debenture trading price period											30 days
Original issue discount											$ 5,789
Convertible Debenture Thirteen [Member]
Debt discount amount										$ 50,000
Note payable bears interest rate										5.00%
Convertible debenture										$ 52,632										52,632													52,632					52,632
Derivative liability and offsetting debt discount										67,171
Derivative liability										$ 17,171
Percenatge of convertible debenture converts at lower price rate										70.00%
Convertible debenture trading price period										30 days
Original issue discount										$ 2,632																												19,737
Convertible Debenture Fourteen [Member]
Debt discount amount									$ 50,000
Note payable bears interest rate									5.00%
Convertible debenture									$ 52,632											52,632													52,632					52,632
Derivative liability and offsetting debt discount									67,171
Derivative liability									$ 17,171
Percenatge of convertible debenture converts at lower price rate									70.00%
Convertible debenture trading price period									30 days
Original issue discount									$ 2,632																													18,275
Convertible Debenture Fifteen [Member]
Debt discount amount							$ 50,000
Note payable bears interest rate							5.00%
Convertible debenture							$ 52,632													52,632													52,632					52,632
Derivative liability and offsetting debt discount							67,171
Derivative liability							$ 17,171
Percenatge of convertible debenture converts at lower price rate							70.00%
Convertible debenture trading price period							30 days
Original issue discount							$ 2,632																															16,228
Convertible Debenture Sixteen [Member]
Debt discount amount						$ 142,500
Note payable bears interest rate						5.00%
Convertible debenture						$ 157,895														157,895													157,895					157,895
Derivative liability and offsetting debt discount						201,512
Derivative liability						59,406
Net of debt discount and deferred financing						$ 1,500
Percenatge of convertible debenture converts at lower price rate						70.00%
Convertible debenture trading price period						30 days
Original issue discount						$ 7,500																																75,832
Convertible Debenture Seventeen [Member]
Debt discount amount					$ 142,500
Note payable bears interest rate					5.00%
Convertible debenture					$ 157,895															157,895													157,895					157,895
Derivative liability and offsetting debt discount					201,512
Derivative liability					$ 59,406
Percenatge of convertible debenture converts at lower price rate					70.00%
Convertible debenture trading price period					30 days
Original issue discount					$ 7,500																																	45,395
Convertible Debenture Eighteen [Member]
Debt discount amount				$ 142,500
Note payable bears interest rate				5.00%
Convertible debenture				$ 157,895																157,895													157,895					157,895
Derivative liability and offsetting debt discount				201,512																707,603													707,603					707,603
Derivative liability				$ 59,406
Convertible debenture trading price period				30 days
Original issue discount				$ 7,500																																		39,145
Convertible Debenture Nineteen [Member]
Debt discount amount			$ 429,439
Convertible debenture			429,439																	429,439													429,439					429,439
Derivative liability			278,164
Derivative expense			$ 707,603
Percenatge of convertible debenture converts at lower price rate			55.00%
Convertible debenture trading price period			30 days
Original issue discount																																						209,226
Convertible Debenture Twenty [Member]
Debt discount amount		$ 142,500
Note payable bears interest rate		5.00%
Convertible debenture		$ 157,895																		157,895													157,895					157,895
Derivative liability		237,303
Derivative expense		$ 95,197
Percenatge of convertible debenture converts at lower price rate		60.00%
Convertible debenture trading price period		30 days
Original issue discount		$ 7,500																																				26,645
Convertible Debenture Twenty One [Member]
Debt discount amount	$ 142,500
Note payable bears interest rate	5.00%
Convertible debenture	$ 157,895																			$ 157,895													$ 157,895					157,895
Derivative liability	286,284
Derivative expense	$ 144,179
Percenatge of convertible debenture converts at lower price rate	60.00%
Convertible debenture trading price period	30 days
Original issue discount	$ 7,500																																					$ 14,145

XML

Convertible Promissory Notes (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Schedule of Convertible Promissory Notes

Convertible promissory notes consisted of the following:

	September 30, 2015			December 31, 2014
Secured convertible promissory notes	$	1,856,804		$	720,269
debt discount liability		(1,002,387	)		(124,527	)
debt discount original issue discount		(42,759	)		(16,296	)
debt discount deferred financing		(7,062	)		(20,417	)
Secured convertible promissory note– net	$	804,596		$	559,029

XML

Going Concern Considerations

9 Months Ended

Sep. 30, 2015

Going Concern Considerations

Going Concern Considerations

NOTE 2 – GOING CONCERN CONSIDERATIONS

The accompanying unaudited consolidated financial statements are prepared assuming the Company will continue as a going concern. At September 30, 2015, the Company had an accumulated deficit of approximately $21 million, a stockholders’ deficit of approximately $5 million and a working capital deficiency of $4,944,626. For the nine months ended September 30, 2015 the net loss totaled $2,375,479. The net cash used in operating activities for the nine months ended September 30, 2015 totaled $808,217 and the net cash used in investing activities totaled $14,453. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon increasing sales and obtaining additional capital and financing. Management intends to attempt to raise funds by way of a public or private offering. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s limited financial resources have prevented the Company from aggressively advertising its products and services to achieve consumer recognition. The unaudited consolidated financial statements do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized shares	1,000,000,000	1,000,000,000
Common stock, issued shares	387,242,229	14,440,933
Common stock, outstanding shares	387,242,229	14,440,933

XML

Accrued Payroll Taxes

9 Months Ended

Sep. 30, 2015

Accrued Payroll Taxes

Accrued Payroll Taxes

NOTE 12 – ACCRUED PAYROLL TAXES

As of September 30, 2015 and December 31, 2014 the Company recorded a liability related to unpaid payroll taxes which includes interest and penalties of approximately $84,000 and $110,000, respectively. The liability was incurred in the years ended December 31, 2007 through December 31, 2010 as a result of the Company not remitting payroll tax liabilities. In August 2013, the Company paid $43,176 and in September 2015, the Company paid $28,281 toward the outstanding payroll tax liabilities. Such amount also includes current payroll tax liabilities and has been included in accrued expenses in the accompanying consolidated financial statements.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 19, 2015
Document And Entity Information
Entity Registrant Name	DIRECTVIEW HOLDINGS INC
Entity Central Index Key	0001441769
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		426,856,343
Trading Symbol	dirv
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015

XML

Segment Reporting

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

NOTE 13 – SEGMENT REPORTING

Although the Company has a number of operating divisions, separate segment data has not been presented as they meet the criteria for aggregation as permitted by ASC Topic 280, “Segment Reporting” (formerly Statement of Financial Accounting Standards (SFAS) No. 131, “Disclosures About Segments of an Enterprise and Related Information”).

Our chief operating decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the CEO is identical to the information presented in the accompanying consolidated statements of operations. Therefore, the Company has determined that it operates in a single operating segment, specifically, web communications services. For the nine months ended September 30, 2015 and the year ended December 31, 2014 all material assets and revenues of the Company were in the United States.

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
NET SALES:
Sales of Product	$ 209,996	$ 77,312	$ 400,080	$ 274,427
Service	59,652	81,235	184,513	139,514
Total Net Sales	269,648	158,547	584,593	413,941
COST OF SALES:
Cost of Product	141,005	70,968	198,207	219,287
Cost of Service	65,594	39,154	136,806	123,431
Total Cost of Sales	206,599	110,122	335,013	342,718
GROSS PROFIT (LOSS)	63,049	48,425	249,580	71,223
OPERATING EXPENSES:
Marketing and Public Relations	145,373	$ 8,452	267,903	$ 112,803
Rent	18,300		76,900
Depreciation	2,158		5,270	$ 1,556
Compensation and Related Taxes	106,341	$ 109,732	357,461	725,746
Other Selling, General and Administrative	168,510	126,598	466,777	378,955
Total Operating Expenses	440,682	244,782	1,174,311	1,219,060
LOSS FROM OPERATIONS	(377,633)	$ (196,357)	(924,731)	$ (1,147,837)
OTHER INCOME (EXPENSES):
Gain (Loss) on conversion of related party loan	$ 5,195		$ (284,805)
Other Income (Expense)		$ (933)		$ 43,171
Gain on Extinguishment of Derivative Liabilities				10,995,882
Change in Fair Value of Derivative Liabilities	$ 156,423	$ 5,599,812	$ 518,096	(13,600,773)
Derivative Expense	(787,628)	(26,848)	(1,042,768)	(26,848)
Amortization of Debt Discount	(300,454)	(98,750)	(475,654)	(213,603)
Interest Expense	(64,368)	(37,588)	(165,617)	(51,970)
Total Other Income (Expense)	(990,832)	5,435,693	(1,450,748)	(2,854,141)
NET INCOME (LOSS)	(1,368,465)	5,239,336	(2,375,479)	(4,001,978)
Less: Net (Income) Loss Attributable to Non-Controlling Interest	(44,862)	6,606	(94,798)	(15,388)
Net Income (Loss) Attributable to DirectView Holdings, Inc.	$ (1,413,327)	$ 5,245,942	$ (2,470,277)	$ (4,017,366)
NET LOSS PER COMMON SHARE:
Basic and Diluted	$ (0.004)	$ 0.01	$ (0.01)	$ (0.01)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and Diluted	364,915,544	369,839,052	206,388,708	324,267,933

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Convertible Promissory Notes

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Convertible Promissory Notes

NOTE 7 – CONVERTIBLE PROMISSORY NOTES

Convertible promissory notes consisted of the following:

	September 30, 2015			December 31, 2014
Secured convertible promissory notes	$	1,856,804		$	720,269
debt discount liability		(1,002,387	)		(124,527	)
debt discount original issue discount		(42,759	)		(16,296	)
debt discount deferred financing		(7,062	)		(20,417	)
Secured convertible promissory note– net	$	804,596		$	559,029

During fiscal 2009, the Company reclassified $45,000 3% unsecured notes payable from long-term to short-term. The maturity of these notes payable ranged from January 2010 to April 2010 and the notes are in default at December 31, 2012. The Company negotiationed with the note holder to extend the maturity date and has accrued 12% interest per annum based on the default provision until such time this note is extended or settled. In May 2013 the Company and the note holder renegotiated the terms of the note to include features that allow the note holder to convert the principal balance of the note into common shares at the conversion price of $.0001. This note included down round (“ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). At issuance of the renegotiated note the Company recorded a debt discount in the amount of $45,000 which has been fully amortized as of December 31, 2013. In June 2013 the note holder converted $764 into common shares at the contractual rate of $.0001per share. In March 2014 the note holder converted an additional $990 into common shares at the contractual rate of $.0001 per share. In October 2014 the note holder assigned $20,000 of the note balance to a third party. The balance of the unsecured note payable amounted to $23,246 as of September 30, 2015 and $43,246 as of December 31, 2014.

Senior secured promissory notes aggregating an original principal of $85,500 were issued in 2008. These notes are payable either in cash or security equivalent at the option of the Company. The notes payable bear 8% interest per annum and are payable on April 1, 2011. The principal and accrued interest is convertible at the option of the note holder into shares of our common stock at a conversion price of $0.50 per share. In July 2013, the Company reclassified the balance of these notes totaling $17,000 to Convertible Promissory Notes from Notes Payable. In May 2013 the Company and the note holder renegotiated the terms of the note to include features that allow the note holder to convert the principal balance of the note into common shares at the conversion price of $.0001.

This note included down round “Ratchet” provisions that resulted in derivative accounting treatment for this note (See note 8). At issuance of the renegotiated note the Company recorded a debt discount in the amount of $17,000 which has been fully amortized as of December 31, 2013. In July 2013 the note holder converted $764 into 254,667 common shares. In March 2014 the note holder converted an additional $990 into common shares at the contractual rate of $.003 per share. In May 2015 the note holder converted the remaining balance of $15,246 into common shares at the contractual rate of $.003 per share. The balance of the unsecured note payable amounted to $0 as of September 30, 2015 and $15,246 as of December 31, 2014.

August 30, 2013 the Company issued an $8,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.0001. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In April 2014 the note holder converted $1,500 into common shares at the contractual rate of $.0001 per share. In June 2015 the note holder converted the remaining balance of $6,500 into common shares at the contractual rate of $.00096 per share. The balance of the convertible debenture is $0 as of September 30, 2015 and as of December 31, 2014.

On October 10, 2013 the Company issued a $10,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.00075. The Company recorded a debt discount of $8,333 upon issuance of this note. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 7). The balance of the convertible debenture is $10,000 as of September 30, 2015 and as of December 31, 2014. In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $8,333 (see Note 8).

On December 11, 2013 the Company issued a $25,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at $.0008. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $23,958 (see Note 8). The balance of this convertible debenture is $25,000 as of September 30, 2015 and as of December 31, 2014.

On January 16, 2014 the Company issued a $25,000 6% convertible debenture with a one year maturity date. This convertible debenture converts at 50% of the lowest trading price during the ten trading days prior to the conversion date. The Company recorded a debt discount of $25,000 with the difference of $26,848 recorded as a derivative expense. The debt discount was amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In connection herewith, the Company recorded a derivative liability and an offsetting debt discount of $51,848 (see Note 8). The balance of this convertible debenture is $25,000 as of September 30, 2015 and as of December 31, 2014.

In March 2014 the Company issued three $50,000 8% convertible debentures with a one year maturity date. Each note is convertible at a contractual rate of $.0175 which exceeded the quoted stock price on the date of the issuance of the convertible debentures. The balance of these three notes was $150,000 as of September 30, 2015 and as of December 31, 2014.

On April 11, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $367,754 with a one year maturity date. This convertible debenture converts at $.0175. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $266,285 and a debt discount of $271,285 (see Note 8). The Company also recorded OID of $28,965. The OID and debt discount are being amortized over the term of the note. This note included down round (“Ratchet”) provisions that resulted in derivative accounting treatment for this note (See note 8). In December 2014 the note holder assigned $25,000 of the principal balance of the note to a third party. In February 2015 the note holder assigned $25,000 and $50,000 of the principal balance of the note to two different third party entities. In the period of January through March 2015 the note holder converted $47,651 into 4,918,166 common shares at the contractual rate ranging from $.0072 to $.027 per share.

In the period of April through June 2015 the note holder converted $171,961 into 104,386,160 common shares at the contractual rate ranging from $.00186 to $.00216 per share. After assignment of $75,000 and the conversions into common shares the balance of this convertible debenture as of June 30, 2015 is $6,142. The balance of the convertible debenture as of December 31, 2014 is $300,754. The balance net of debt discount and deferred financing is $0 and $240,820 as of June 30, 2015 and December 31, 2014, respectively.

On October 8, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $81,522 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $84,250 and a debt discount of $75,000 (see Note 8). The Company also recorded OID of $6,522. The OID and debt discount are being amortized over the term of the note. In April 2015 the note holder assigned $15,000 of the principal balance of the note to a third party. In July 2015 the note holder converted $66,522 into 26,373,441 common shares at the contractual rate of $.00258 per share. The balance of this convertible debenture as of September 30, 2015 is $0 and $81,522 as of December 31, 2014. The balance net of debt discount and deferred financing is $0 and $3,130 as of September 30, 2015 and December 31, 2014, respectively.

In May 2015 a note holder converted a $15,000 assigned note balance into 9,722,222 common shares at a contractual rate ranging from $.0012 to $.00216 leaving the note balance at $0 as of September 30, 2015.

On October 27, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $21,600 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $311,662 and a debt discount of $18,400 (see Note 8). The Company also recorded OID of $1,600. The OID and debt discount are being amortized over the term of the note. The balance of this convertible debenture as of September 30, 2015 and as of December 31, 2014 is $21,600. The balance net of debt discount and deferred financing is $19,933 and $4,934 as of September 30, 2015 and December 31, 2014, respectively.

On December 19, 2014 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $27,174 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $5,017 and a debt discount of $5,017 (see Note 8). The Company also recorded OID of $2,000. The OID and debt discount are being amortized over the term of the note. The balance of this convertible debenture as of September 30, 2015 and as of December 31, 2014 is $27,174. The balance net of debt discount and deferred financing is $26,189 and $20,926 as of September 30, 2015 and December 31, 2014, respectively.

On December 19, 2014 a note holder assigned $25,000 to another note holder. On December 29, 2014 $10,773 was converted into 664,973 shares of common stock at a contractual rate of $.0162. In February 2015 a note holder assigned an additional $25,000 to the same assignee. The note holder converted $13,831 into 4,619,339 common shares at the contractual rate ranging from $.0054 to $.027 per share. In September 2015 the balance of the convertible debenture was written off leaving a balance of $0 and $14,227 as of September 30, 2015 and December 31, 2014, respectively.

In October 2014 a note holder assigned $20,000 of principal balance and $4,489 of an accrued interest balance to a third party. In January 2015 the note holder converted $1,000 into 333,333 common shares at the contractual rate of $.003. In March 2015 the note holder converted $1,300 into 1,300,000 common shares at the contractual rate of $.001. In April and May 2015 the note holder converted $17,200 into 13,900,000 common shares at the contractual rate ranging from $.0008 to $.00156 per share. The balance of the unsecured note payable amounted to $4,989 and $24,489 as of September 30, 2015 and December 31, 2014, respectively.

In February 2015 a note holder assigned $50,000 of principal balance of a convertible debenture to a third party. In March 2015 the note holder converted $4,125 of principal balance, $3,375 of accrued interest and $1,220 of fees into 4,844,633 common shares at the contractual rate of $.0072. In the period of April through May 2015 the note holder converted $38,250 of principle balance, $909 of accrued interest and $7,320 of fees into 37,148,448 common shares at the contractual rate ranging from $.00096 to $.075 per share. In August 2015 the note holder converted $7,625 of principle balance, $50 of accrued interest and $156 of fees into 2,900,325 common shares at the contractual rate of $.0027per share. The balance of the unsecured note payable amounted to $0 as of September 30, 2015.

On February 11, 2015 the Company issued an 8% original issue discount (OID) senior secured convertible promissory note with a principal balance of $54,348 with a one year maturity date. This convertible debenture converts at the lower of $.0025 or 60% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $119,940, a debt discount of $50,348 (see Note 8), and derivative expense of $69,940. The Company also recorded OID of $4,000. The OID and debt discount are being amortized over the term of the note. In June 2015 the note holder assigned the balance of the note and accrued interest of $4,348 to a third party totaling a new note balance of $58,696 as of June 30, 2015. In August 2015 the note holder converted $10,000 of principle balance into 7,246,377 common shares at the contractual rate of $.00138 per share. In September 2015 the note holder converted an additional $24,000 of principle balance into 17,391,304 common shares at the contractual rate of $.00138 per share. The balance of the unsecured note payable amounted to $24,696 as of September 30, 2015.

On April 8, 2015 the Company issued a 5% original issue discount (OID) senior secured convertible promissory note with a principal balance of $52,500 with a one year maturity date. This convertible debenture converts at 55% of the lowest trading price during the 25 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $86,506, a debt discount of $50,000 (see Note 8), and derivative expense of $36,506. The Company also recorded OID of $2,500 and deferred financing of $5,000. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the senior secured convertible promissory note amounted to $52,500 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, OID and deferred financing as of September 30, 2015 amounted to $23,750.

On May 5, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $115,789 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $147,775, a debt discount of $110,000 (see Note 8), and derivative expense of $37,775. The Company also recorded OID of $5,789 and deferred financing of $10,000. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $115,789 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, deferred financing and OID as of September 30, 2015 amounted to $37,171.

On May 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $19,737.

On May 27, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $18,275.

On June 5, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $52,632 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $67,171, a debt discount of $50,000 (see Note 8), and derivative expense of $17,171. The Company also recorded OID of $2,632. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $52,632 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $16,228.

On June 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500 and deferred financing of $1,500. The OID, deferred financing and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount, deferred financing and OID as of September 30, 2015 amounted to $75,832.

On July 1, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $45,395.

On July 15, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 70% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $201,512, a debt discount of $142,500 (see Note 8), and derivative expense of $59,406. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $39,145.

On July 23, 2015 the Company issued a convertible promissory note with a principal balance of $429,439 with a one year maturity date. This convertible debenture converts at 55% of the two lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $707,603, a debt discount of $429,439 (see Note 8), and derivative expense of $278,164. The debt discount is being amortized over the term of the note. The balance of the convertible promissory note amounted to $429,439 as of September 30, 2015. The balance of the convertible promissory note net of debt discount as of September 30, 2015 amounted to $209,226.

On August 12, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $237,303, a debt discount of $142,500 (see Note 8), and derivative expense of $95,197. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $26,645.

On September 11, 2015 the Company issued a 5% original issue discount (OID) convertible promissory note with a principal balance of $157,895 with a one year maturity date. This convertible debenture converts at 60% of the lowest trading price during the 30 days prior to conversion. Due to certain ratchet provisions contained in the convertible promissory note the Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $286,284, a debt discount of $142,500 (see Note 8), and derivative expense of $144,179. The Company also recorded OID of $7,500. The OID and debt discount are being amortized over the term of the note. The balance of the convertible promissory note amounted to $157,895 as of September 30, 2015. The balance of the convertible promissory note net of debt discount and OID as of September 30, 2015 amounted to $14,145.

During the nine months ended September 30, 2015 and 2014, amortization of debt discount amounted to $475,654 and $213,603, respectively.

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Accrued Expenses

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Accrued Expenses

NOTE 6 – ACCRUED EXPENSES

As of September 30, 2015 and December 31, 2014 the Company had accrued expenses of $1,881,620 and $1,565,139 respectively. The following table displays the accrued expenses by category.

	September 30, 2015		December 31, 2014
Operating Expenses	$	22,600	$	8,700
Lease Abandonment		164,375		164,375
Employee Commissions		60,590		60,590
Interest		255,897		213,473
Salaries		1,237,098		981,908
Sales Tax Payable		56,890		25,674
Payroll Liabilities		84,170		110,419
	$	1,881,620	$	1,565,139

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Accrurd Expenses (Tables)

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

The following table displays the accrued expenses by category.

	September 30, 2015		December 31, 2014
Operating Expenses	$	22,600	$	8,700
Lease Abandonment		164,375		164,375
Employee Commissions		60,590		60,590
Interest		255,897		213,473
Salaries		1,237,098		981,908
Sales Tax Payable		56,890		25,674
Payroll Liabilities		84,170		110,419
	$	1,881,620	$	1,565,139

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

NOTE 14 – SUBSEQUENT EVENTS

Subsequent to the quarter ending September 30, 2015 the Company issued 40,088,776 shares of common stock in satisfaction of $46,250 of convertible promissory notes and $2,625 of accrued interest. These notes were converted at contractual rates ranging from $.00116 to $.0023.

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Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 10 – RELATED PARTY TRANSACTIONS

Due to Related Parties

The following related party transactions have been presented on the balance sheet in due to related parties. Additionally, as of September 30, 2015 $82,395 of accrued interest due to related parties has been included in accrued expenses.

During 2007 and 2006, the Company’s principal officer loaned $39,436 and $14,400, respectively to the Company for working capital purposes. This debt carries 3% interest per annum and matured in July 2010. In March 2012, the Company and the principal officer of the Company agreed to change the term of this promissory note into a demand note. In May and June 2015 the Company repaid $16,881 in the principal of this note. During the period of July 1, 2015 through September 30, 2015 the Company repaid the remaining balance of $35,465. The amount due to such related party at September 30, 2015 and December 31, 2014 amounted to $0 and $52,347, respectively. As of December 31, 2014, this note was reflected as due to related party. Accrued interest related to these notes amounted to $4,189 and $4,716 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses in the Company’s balance sheet.

In June 2009, the Company issued a promissory note amounting $22,000 to the Chief Executive Officer of the Company. This note is payable either in cash or security equivalent at the option of the note holder. The note payable bears 12% interest per annum and was payable in June 2010. During 2012, the Company repaid the Chief Executive Officer $11,157 and in July and August 2015 the Company repaid the Chief Executive Officer $10,843 related to this note leaving the balance of the note at $0 as of September 30, 2015. As of December 31, 2014 the balance on this promissory note amounted to $10,843.

Accrued interest on the notes payable to the Chief Executive Officer of the Company amounted to $29,728 and $21,999 as of September 30, 2015 and December 31, 2014, respectively and is included in accrued expenses in the Company’s balance sheet.

The Chief Executive Officer of the Company, from time to time, provided advances to the Company for operating expenses. The Company repays the advances when funds are available. The Company repaid $13,819 to the Chief Executive Officer in the first quarter of 2015. The Chief Executive Officer of the Company loaned the Company $20,984 in the first quarter of 2015. In March 2015 the Company issued the Chief Executive Officer 100,000,000 shares of common stock for the retirement of $10,000 of loans. The Company repaid $10,907 to the Chief Executive Officer and borrowed $2,484 in the second quarter of 2015. The Company repaid $140,330 to the Chief Executive Officer and borrowed $3,412 in the third quarter of 2015. At September 30, 2015 and December 31, 2014 the Company had a payable to the Chief Executive Officer of the Company amounting to $15,144 and $163,320, respectively. These advances are short-term in nature and non-interest bearing.

The Chief Financial Officer of the Company, from time to time, provided advances to the Company for operating expenses. The Company repaid $8,119 to the Chief Financial Officer in the second quarter of 2015. At September 30, 2015 and December 31, 2014, the Company had a payable to the Chief Financial Officer of the Company amounting to $0 and $8,119, respectively. These advances are short-term in nature and non-interest bearing.

During the quarter ended June 30, 2012, the Company issued notes payable to the CFO amounting to $429,439 related to the accrued salaries. In July 2015 the Company repaid the CFO $429,439. As of September 30, 2015 and December 31, 2014 the balance on the notes payable related to the accrued salaries amounted to $0 and $429,439, respectively.

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Derivative Liability

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liability

NOTE 8 – DERIVATIVE LIABILITY

The Company enters into financing arrangements that contain embedded derivative features due to down round (“Ratchet”) provisions or conversion formulas that cause derivative treatment. The Company accounts for these arrangements in accordance with Accounting Standards Codification topic 815, Accounting for Derivative Instruments and Hedging Activities (“ASC 815”) as well as related interpretation of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. The Company determines the fair value of derivative instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument.

We estimate fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered consistent with the objective measuring fair values. In selecting the appropriate technique, we consider, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments we generally use the Black-Scholes model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock. Since derivative financial instruments are initially and subsequently carried at fair values, our income (expense) going forward will reflect the volatility in these estimates and assumption changes. Under the terms of the new accounting standard, increases in the trading price of the Company’s common stock and increases in fair value during a given financial quarter result in the application of non-cash derivative expense. Conversely, decreases in the trading price of the Company’s common stock and decreases in trading fair value during a given financial quarter result in the application of non-cash derivative income.

The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from December 31, 2014 to September 30, 2015:

	Conversion feature derivative liability
Balance at December 31, 2014	$	1,462,984
Recognition of initial derivative liability		2,391,458
Reclass of derivative liability to additional paid in capital due to conversions		(1,196,842	)
Change in fair value included in earnings		(518,096	)
Balance at September 30, 2015	$	2,139,504

Total derivative liability at September 30, 2015 and December 31, 2014 amounted to $2,139,504 and $1,462,984, respectively. The change in fair value included in earnings as income of $518,096 is due in part to the quoted market price of the Company’s common stock decreasing from $.027 at December 31, 2014 to $.0037 at September 30, 2015 coupled with substantially reduced conversion prices due to the effect of “Ratchet” provisions incorporated in convertible notes payable.

The Company used the following assumptions for determining the fair value of the convertible instruments granted under the Black-Scholes option pricing model:

	September 30, 2015
Expected volatility		192 % - 305	%
Expected term		3 – 12 months
Risk-free interest rate		0.0 2% - 0.09	%
Expected dividend yield		0	%

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Stockholders' Deficit

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Stockholders' Deficit

NOTE 9 – STOCKHOLDERS’ DEFICIT

On March 14, 2015 the Company approved a 1-30 Reverse Stock Split (see Note 1).

In January 2015 the Company made four issuances of common shares related to the same note payable. The Company issued 600,000; 633,333; 633,333 and 666,667 shares of common stock at $.0108 for the reduction of $6,480; at $.0108 for the reduction of 6,840; at $.0108 for the reduction of $6,840 and at $.009 for an additional reduction of $6,000 in principal of notes payable.

In January 2015 the Company issued 333,333 shares of common stock at $.003 for the reduction of $1,000 in principal of notes payable.

In January 2015 the Company issued 699,667 shares of common stock at $.0108 for the reduction of $7,556 in principal of notes payable.

In February 2015 the Company issued 700,000; 766,667 and 833,333 shares of common stock at $.009 for the reduction of $6,300; at $.009 for the reduction of $6,900; and at $.0072 for the reduction of $6,000 in principal of notes payable.

In February 2015 the Company made four issuances of common shares related to the same note payable. The Company issued 741,226; 946,793; 1,033,333 and 1,097,767 shares of common stock at $.009 for the reduction of $6,671; at $.009 for the reduction of 8,521; at $.0072 for the reduction of $7,440 and at $.0054 for an additional reduction of $5,928 in principal of notes payable.

In February 2015 the Company issued 116,667 shares of common stock at fair market value of $.018 for $2,100 of services rendered.

In March 2015 the Company made two issuances of common shares related to the same note payable. The Company issued 41,500 and 43,333 shares of common stock at $.027 for the reduction of $1,121 and at $.027 for the reduction of $1,170 in principal of notes payable.

In March 2015 the Company made issuances of common shares related to the same note payable. The Company issued 4,844,633 shares of common stock at $.0072 for the reduction of $8,720 of principal, interest and associated fees.

In March 2015 the Company made two issuances of common shares related to the same note payable. The Company issued 45,833 and 54,780 shares of common stock at $.027 for the reduction of $1,238 and at $.027 for the reduction of $1,479 in principal of notes payable.

In March 2015 the Company issued 1,300,000 shares of common stock at $.001 for the reduction of $1,300 in principal of notes payable.

In the period of April 1, 2015 through June 30, 2015 the Company issued 174,227,554 shares of common stock at contractual rates ranging from $.00096 to $.075 for the reduction of $265,281in principal notes payable, $8,540 in fees and $959 in the reduction of accrued interest (See Note 7).

In May 2015 the Company issued 3,000,000 shares of common stock at fair market value of $.014 per share, based on quoted traded prices, for compensation totaling $42,000.

In the period of July 1, 2015 through September 30, 2015 the Company issued 71,280,788 shares of common stock at contractual rates ranging from $.00138 to $.003 for the reduction of $114,289 in principal of convertible notes payable, $156 in fees and $44,181 in the reduction of accrued interest (See Note 7).

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Barter Revenue

9 Months Ended

Sep. 30, 2015

Notes to Financial Statements

Barter Revenue

NOTE 11 – BARTER REVENUE

The Company provides security systems and associated installation labor in exchange for business services. The Company recognizes revenue from these barter transactions when security systems are installed and recognizes deferred barter costs as other current assets until the barter transaction is completed and then recognizes the appropriate expense. The barter revenue is valued at the fair market value which is the selling price we sell to other third parties. The barter revenue for the nine months ended September 30, 2015 totaled $18,047. The barter revenue for the twelve months ended December 31, 2014 totaled $5,893.

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Accrued Expenses (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Accrued expenses	$ 1,881,620	$ 1,565,139

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Schedule of Concentrations of Credit Risk and Major Customers

During the nine months ended September 30, 2015, three customers accounted for 60% of revenues. The following is a list of percentage of revenue generated by the three customers:

Customer 1	13	%
Customer 2	22	%
Customer 3	25	%
Total	60	%

During the nine months ended September 30, 2014, one customer accounted for 61% of revenues.

As of September 30, 2015, four customers accounted for 74% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers:

Customer 1	10	%
Customer 2	12	%
Customer 3	16	%
Customer 4	36	%
Total	74	%

As of December 31, 2014, three customers accounted for 73% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:

Customer 1	16	%
Customer 2	26	%
Customer 3	31	%
Total	73	%

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Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)		3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 14, 2015	Mar. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Reverse stock split	1 for 30	1 for 30
Non-controlling interest			$ 64,364		$ (30,435)
Federal Deposit Insurance Corporation ("FDIC")			250,000
Accounts receivable net			38,000		38,000
Expenses related to uncollectible accounts receivable			0		$ 20,500
Advertising expenses			$ 267,790	$ 112,803
Shipping costs
Inventory on hand
Impairment charges
Percentage of tax benefit			50.00%
Stock based compensation expense			$ 44,100	$ 431,600
Embedded conversion features			691,296,462		69,694,188
Subsidiaries One [Member]
Majority voting interest			58.00%
Subsidiaries Two [Member]
Majority voting interest			42.00%
Subsidiaries Three [Member]
Majority voting interest			23.00%

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Stockholders' Deficit (Details Narrative) - USD ($)		1 Months Ended				3 Months Ended	9 Months Ended
	Mar. 14, 2015	May. 31, 2015	Mar. 31, 2015	Feb. 28, 2015	Jan. 31, 2015	Mar. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Nov. 30, 2014	Nov. 30, 2009
Reverse stock split	1 for 30					1 for 30
Issuances of common shares related to note payable		3,000,000
Common stock price per share		$ .014					$ 0.0037	$ 0.027
Principal of notes payable							$ 126,692	$ 176,692		$ 20,000
Accrued interest							$ 60,600	$ 43,900	$ 5,000
Stock issued during period share-based compensation		$ 42,000
April through June 2015 [Member]
Issuances of common shares related to note payable							174,227,554
Principal of notes payable							$ 265,281
Convertible notes payable fees							8,540
Accrued interest							$ 959
April through June 2015 [Member] | Minimum [Member]
Common stock price per share							$ 0.00096
April through June 2015 [Member] | Maximum [Member]
Common stock price per share							$ 0.075
July 1, 2015 through September 30, 2015 [Member]
Issuances of common shares related to note payable							71,280,788
Principal of notes payable							$ 114,289
Convertible notes payable fees							156
Accrued interest							$ 44,181
July 1, 2015 through September 30, 2015 [Member] | Minimum [Member]
Common stock price per share							$ .00138
July 1, 2015 through September 30, 2015 [Member] | Maximum [Member]
Common stock price per share							$ .003
Common Stock 1 [Member] | Note Payable 1 [Member]
Issuances of common shares related to note payable			41,500	700,000	600,000
Common stock price per share			$ 0.027	$ 0.009	$ 0.0108	$ 0.027
Principal of notes payable			$ 1,121	$ 6,300	$ 6,480	$ 1,121
Common Stock 1 [Member] | Note Payable 2 [Member]
Issuances of common shares related to note payable			43,333	766,667	633,333
Common stock price per share			$ 0.027	$ 0.009	$ 0.0108	$ 0.027
Principal of notes payable			$ 1,170	$ 6,900	$ 6,840	$ 1,170
Common Stock 1 [Member] | Note Payable 3 [Member]
Issuances of common shares related to note payable				833,333	633,333
Common stock price per share				$ 0.0072	$ 0.0108
Principal of notes payable				$ 6,000	$ 6,840
Common Stock 1 [Member] | Note Payable 4 [Member]
Issuances of common shares related to note payable					666,667
Common stock price per share					$ 0.009
Principal of notes payable					$ 6,000
Common Stock 2 [Member]
Issuances of common shares related to note payable			4,844,633		333,333
Common stock price per share			$ 0.0072		$ 0.003	$ 0.0072
Principal of notes payable			$ 8,720		$ 1,000	$ 8,720
Common Stock 2 [Member] | Note Payable 1 [Member]
Issuances of common shares related to note payable				741,226
Common stock price per share				$ 0.009
Principal of notes payable				$ 6,671
Common Stock 2 [Member] | Note Payable 2 [Member]
Issuances of common shares related to note payable				946,793
Common stock price per share				$ 0.009
Principal of notes payable				$ 8,521
Common Stock 2 [Member] | Note Payable 3 [Member]
Issuances of common shares related to note payable				1,033,333
Common stock price per share				$ 0.0072
Principal of notes payable				$ 7,440
Common Stock 2 [Member] | Note Payable 4 [Member]
Issuances of common shares related to note payable				1,097,767
Common stock price per share				$ 0.0054
Principal of notes payable				$ 5,928
Common Stock 3 [Member]
Issuances of common shares related to note payable					699,667
Common stock price per share				$ 0.018	$ 0.0108
Principal of notes payable					$ 7,556
Common stock issued for services				116,667
Common stock value issued for services				$ 2,100
Common Stock 3 [Member] | Note Payable 1 [Member]
Issuances of common shares related to note payable			45,833
Common stock price per share			$ 0.027			$ 0.027
Principal of notes payable			$ 1,238			$ 1,238
Common Stock 3 [Member] | Note Payable 2 [Member]
Issuances of common shares related to note payable			54,780
Common stock price per share			$ 0.027			$ 0.027
Principal of notes payable			$ 1,479			$ 1,479
Common Stock 4 [Member]
Issuances of common shares related to note payable			1,300,000
Common stock price per share			$ 0.001			$ 0.001
Principal of notes payable			$ 1,300			$ 1,300

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,368,465)	$ 5,239,336	$ (2,375,479)	$ (4,001,978)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation	2,158		5,270	1,556
Common stock issued for compensation			44,100	$ 462,600
Common stock issued for services			9,760
Change in fair value of derivative liabilities	$ (156,423)	$ (5,599,812)	$ (518,096)	$ 13,600,773
Gain on extinguishment of derivative liabilities				$ (10,995,882)
Loss on conversion of related party loan, net	$ (5,195)		$ 284,805
Derivative liability expense	787,628	$ 26,848	1,042,768	$ 26,848
Amortization of debt discount	300,454	98,750	475,654	213,603
Amortization of deferred financing costs			27,354	$ 24,057
Amortization of original issue discount			31,224
(Increase) Decrease in:
Accounts receivable			(218,855)	$ 11,698
Other current assets			$ (10,927)	(12,180)
Other assets				1,586
Increase (Decrease) in:
Accounts payable			$ 54,133	9,754
Accrued expenses			340,072	241,762
Net Cash (Used in) Operating Activities			(808,217)	(415,803)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of leasehold improvements			(14,453)	(12,448)
Net Cash (Used in) Investing Activities			(14,453)	(12,448)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from convertible note payable			1,560,383	485,833
Payments of convertible notes payable			(50,000)	$ (36,759)
Proceeds from related parties			26,940
Proceeds payments to related parties			(665,864)	$ (24,898)
Net Cash Provided by Financing Activities			871,459	424,176
Net Increase in Cash			48,789	(4,075)
Cash - Beginning of Period			13,158	23,469
Cash - End of Period	$ 61,947	$ 19,394	$ 61,947	19,394
Cash paid during the period for:
Interest				$ 12,953
Income Taxes
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in connection with conversion of convertible promissory note			$ 272,386	$ 17,301
Beneficial conversion and derivative liabilities on convertible notes payable				25,000
Initial recognition of derivative liability as debt discount			$ 637,305	$ 318,133

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Short Term Advances

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Short Term Advances

NOTE 5 – SHORT TERM ADVANCES

During the nine months ended September 30, 2015 and the year ended December 31, 2014, an unrelated party advanced funds to the Company used for operating expenses. The advances are payable in cash and are non interest bearing and due on demand. The balance of these short term advances was $146,015 and $146,015 as of September 30, 2015 and December 31, 2014.

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Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Concentrations of Credit Risk and Major Customers (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	74.00%	73.00%
Customer 1 [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	10.00%	16.00%
Customer 2 [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	12.00%	26.00%
Customer 3 [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	16.00%	31.00%
Customer 4 [Member] | Accounts Receivable [Member]
Concentrations of Credit Risk and Major Customers	36.00%
Revenue [Member]
Concentrations of Credit Risk and Major Customers	60.00%
Revenue [Member] | Customer 1 [Member]
Concentrations of Credit Risk and Major Customers	13.00%
Revenue [Member] | Customer 2 [Member]
Concentrations of Credit Risk and Major Customers	22.00%
Revenue [Member] | Customer 3 [Member]
Concentrations of Credit Risk and Major Customers	25.00%

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Derivative Liability (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	May. 31, 2015	Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Liability	$ 2,139,504		$ 1,462,984
Change in fair value included in earnings	$ 518,096
Change in quoted market price of common stock	$ 0.0037	$ .014	$ 0.027

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Organization

Organization

DirectView Holdings, Inc., (the “Company”), was incorporated in the State of Delaware on October 2, 2006. On July 6, 2012 the Company changed its domicile from Delaware and incorporated in the state of Nevada.

The Company has the following four subsidiaries: DirectView Video Technologies Inc., DirectView Security Systems Inc., Ralston Communication Services Inc., and Meeting Technologies Inc.

The Company is a full-service provider of teleconferencing services to businesses and organizations. The Company’s conferencing services enable its clients to cost-effectively conduct remote meetings by linking participants in geographically dispersed locations. The Company’s primary focus is to provide high value-added conferencing services to organizations such as professional service firms, investment banks, high tech companies, law firms, investor relations firms, and other domestic and multinational companies. The Company is also a provider of the latest technologies in surveillance systems, digital video recording and services. The systems provide onsite and remote video and audio surveillance.

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements include the accounts of the Company, three wholly-owned subsidiaries, and a subsidiary with which the Company has a majority voting interest of approximately 58% (the other 42% is owned by non-controlling interests, including 23% which is owned by the Company’s CEO who is a majority shareholder of the Parent Company) as of September 30, 2015. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of subsidiaries applicable to non-controlling interests.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited consolidated financial statements and notes included herein should be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on April 15, 2015.

In the opinion of management, all adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2015, and the results of operations and cash flows for the nine months ending September 30, 2015 have been included. The results of operations for the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year.

All share and per share amounts have been presented to give retroactive effect to a 1 for 30 reverse stock split that occurred in March 2015.

Use of Estimates

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the allowance for doubtful accounts, deferred tax asset valuation allowance, valuation of stock-based compensation, the useful life of property and equipment, valuation of beneficial conversion features on convertible debt and the assumptions used to calculate derivative liabilities.

Non-controlling Interests in Consolidated Financial Statements

Non-controlling Interests in Consolidated Financial Statements

The Company follows ASC 810-10-65, “Non-controlling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51,” (“SFAS No. 160”). This statement clarifies that a non-controlling (minority) interest in a subsidiary is an ownership interest in the entity that should be reported as equity in the consolidated financial statements. It also requires consolidated net income to include the amounts attributable to both the parent and non-controlling interest, with disclosure on the face of the consolidated income statement of the amounts attributed to the parent and to the non-controlling interest. In accordance with ASC 810-10-45-21, the losses attributable to the parent and the non-controlling interest in subsidiary may exceed their interests in the subsidiary’s equity. The excess and any further losses attributable to the parent and the non-controlling interest shall be attributed to those interests even if that attribution results in a deficit non-controlling interest balance. As of September 30, 2015, the Company reflected a non-controlling interest of $64,364 in connection with our majority-owned subsidiary, DirectView Security Systems Inc. as reflected in the accompanying consolidated balance sheets.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of September 30, 2015 and December 31, 2014. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

In addition, FASB ASC 825-10-25 Fair Value Option expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, notes payable and due to related parties approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the notes and convertible promissory notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and the interest payable on the notes approximates the Company’s incremental borrowing rate.

Accounts Receivable

Accounts Receivable

The Company has a policy of reserving for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company uses specific identification of accounts to reserve possible uncollectible receivables. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At September 30, 2015 and December 31, 2014, management determined that an allowance is necessary which amounted to $38,000 at both dates. During the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company recognized $0 and $20,500 respectively of expenses related to uncollectible accounts receivable.

Advertising

Advertising

Advertising is expensed as incurred. Advertising expenses for the nine months ended September 30, 2015 and 2014 was $267,790 and $112,803, respectively.

Shipping Costs

Shipping costs

Shipping costs are included in other selling, general and administrative expenses and was deemed to be not material for the nine months ended September 30, 2015 and 2014, respectively.

Inventories

Inventories

Inventories, consisting of finished goods related to our products are stated at the lower of cost or market utilizing the first-in, first-out method. The Company acquires inventory for specific installation jobs. As a result, the Company orders inventory only as needed for installations and there was an insignificant amount of inventory on hand at September 30, 2015 and December 31, 2014.

Property and Equipment and Leasehold Improvements

Property and equipment and Leasehold Improvements

Property and equipment and leasehold improvements are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Leasehold improvements are amortized on a straight-line basis over the term of the lease.

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

Long-Lived Assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets”. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not consider it necessary to record any impairment charges during the nine months ended September 30, 2015 and 2014.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method as prescribed by ASC Topic 740: Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company’s opinion it is likely that some portion or the entire deferred tax asset will not be realized.

Pursuant to ASC Topic 740-10: Income Taxes related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. The adoption had no effect on the Company’s consolidated financial statements.

Stock Based Compensation

Stock Based Compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the service period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. The Company recorded stock based compensation expense of $44,100 and $431,600 during the nine months ended September 30, 2015 and 2014, respectively.

Revenue Recognition

Revenue recognition

The Company follows the guidance of the FASB ASC 605-10-S99 “Revenue Recognition Overall – SEC Materials. The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectibility is reasonably assured. When a customer order contains multiple items such as hardware, software, and services which are delivered at varying times, the Company determines whether the delivered items can be considered separate units of accounting. Delivered items should be considered separate units of accounting if delivered items have value to the customer on a standalone basis, there is objective and reliable evidence of the fair value of undelivered items, and if delivery of undelivered items is probable and substantially in the Company’s control.

The following policies reflect specific criteria for the various revenues streams of the Company:

Revenue is recognized upon completion of conferencing services. The Company generally does not charge up-front fees and bills its customers based on usage.

Revenue for video equipment sales and security surveillance equipment sales is recognized upon delivery and installation.

Revenue from periodic maintenance agreements is generally recognized ratably over the respective maintenance periods provided no significant obligations remain and collectibility of the related receivable is probable.

Cost of sales includes cost of products and cost of service. Product cost includes the cost of products and freight costs. Cost of services includes labor and fuel expenses.

Concentrations of Credit Risk and Major Customers

Concentrations of Credit Risk and Major Customers

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company places its cash with high credit quality financial institutions. Almost all of the Company’s sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

During the nine months ended September 30, 2015, three customers accounted for 60% of revenues. The following is a list of percentage of revenue generated by the three customers:

Customer 1	13	%
Customer 2	22	%
Customer 3	25	%
Total	60	%

During the nine months ended September 30, 2014, one customer accounted for 61% of revenues.

As of September 30, 2015, four customers accounted for 74% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the four customers:

Customer 1	10	%
Customer 2	12	%
Customer 3	16	%
Customer 4	36	%
Total	74	%

As of December 31, 2014, three customers accounted for 73% of total accounts receivable. The following is a list of percentage of accounts receivable owed by the three customers:

Customer 1	16	%
Customer 2	26	%
Customer 3	31	%
Total	73	%

Related Parties

Related Parties

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

Net Loss Per Common Share

Net Loss per Common Share

Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net earnings per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. At September 30, 2015 the Company had 691,296,462 shares equivalent issuable pursuant to embedded conversion features. At December 31, 2014, the Company had 69,694,188 shares equivalent issuable pursuant to embedded conversion features.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not expect the future adoption of any such pronouncements to have a significant impact on the results of operations, financial condition or cash flow.