Through June 30, 2016, we have financed our operations primarily through the issuance of various convertible debentures. For the six months ended June 30, 2016, we received cash proceeds of $375,000 from the issuance of new convertible debentures. Convertible debentures, net of discount, included in current liabilities totaled $2,760,088 and $2,387,981 as of June 30, 2016 and December 31, 2015, respectively.

The following is a schedule of short-term convertible debentures outstanding as of June 30, 2016:

Description	Date	Conversion Price		Original Principal Amount	Unpaid Principal Balance	Term	Interest Rate

Debenture 1	10/10/11	$30.00		$ 25,000	$ 25,000	12 months	14%
Debenture 3	2/17/12	$30.00		10,000	10,000	12 months	14%
Debenture 4	3/9/12	$30.00		5,000	5,000	12 months	14%
Debenture 5	3/19/12	$30.00		5,000	5,000	12 months	14%
Debenture 6	4/29/12	$30.00		5,000	5,000	12 months	14%
Debenture 7	4/25/12	$30.00		10,000	10,000	12 months	14%
Debenture 8	10/9/12	$30.00		5,000	5,000	12 months	14%
Debenture 10	11/15/12	$30.00		5,000	5,000	12 months	14%
Debenture 11	11/20/12	$30.00		2,000	2,000	12 months	14%
Debenture 12	12/11/12	$30.00		2,500	2,500	12 months	14%
Debenture 14	1/5/13	$30.00		2,500	2,500	12 months	14%
Debenture 15	2/5/13	$30.00		2,500	2,500	12 months	14%
Debenture 17	7/23/13	Variable		62,000	62,000	9 months	8%
Debenture 19	7/29/13	$30.00		10,000	10,000	12 months	14%
Debenture 22	9/4/13	Variable		50,000	50,000	12 months	8%
Debenture 31	10/3/13	Variable		3,750	3,750	12 months	8%
Debenture 33	10/25/13	Variable		52,000	52,000	9 months	8%
Debenture 34	10/25/13	Variable		30,000	47,455	9 months	8%
Debenture 36	11/29/13	Variable		30,000	22,800	6 months	15%
Debenture 37	11/29/13	Variable		25,000	25,000	6 months	15%
Debenture 39	12/2/13	Variable		25,000	15,000	6 months	15%
Debenture 47	6/23/13	Variable		35,000	17,500	7 months	10%
Debenture 48	6/23/13	Variable		12,500	12,500	7 months	10%
Debenture 49	1/12/14	Variable		26,000	26,000	12 months	22%
Debenture 50	1/12/14	Variable		60,000	60,000	12 months	12%
Debenture 51	2/3/14	$0.06		50,000	46,600	2 months	14%
Debenture 52	2/18/14	$0.06		5,000	5,000	12 months	14%
Debenture 53	3/17/14	Variable		25,000	23,500	12 months	18%
Debenture 54	3/20/14	Variable		10,000	10,000	12 months	18%
Debenture 55	3/25/14	Variable		10,000	10,000	12 months	18%
Debenture 56	3/28/14	Variable		55,000	55,000	12 months	18%
Debenture 57	4/1/14	$0.0025		50,000	800	6 months	14%
Debenture 58	4/9/14	Variable		75,000	75,000	11 months	18%
Debenture 59	4/10/14	Variable		60,000	60,000	11 months	18%
Debenture 60	4/11/14	Variable		2,272	2,272	11 months	18%
Debenture 61	4/11/14	Variable		40,000	19,475	12 months	15%
Debenture 62	4/16/14	Variable		30,000	8,503	24 months	12%
Debenture 63	4/23/14	$0.04		10,500	10,500	12 months	14%
Debenture 64	5/8/14	$0.06		4,000	4,000	12 months	14%
Debenture 65	5/21/14	Variable		50,000	50,000	12 months	15%
Debenture 68	7/11/14	$0.01		25,000	7,500	12 months	14%
Debenture 70	7/24/14	$0.06		48,360	48,360	12 months	14%
Debenture 73	8/29/14	Variable	67,595		19,966	6 months	5%
Debenture 74	9/3/14	Variable	37,520		37,520	24 months	12%
Debenture 75	9/8/14	$0.01	25,000		25,000	12 months	14%
Debenture 76	9/9/14	$0.01	36,359		36,359	12 months	14%
Debenture 77	9/9/14	$0.0025	8,641		811	12 months	14%
Debenture 78	9/9/14	$0.0025	10,000		10,000	12 months	14%
Debenture 79	9/9/14	$0.0025	10,000		10,000	12 months	14%
Debenture 80	9/9/14	$0.0025	10,000		10,000	12 months	14%
Debenture 81	9/9/14	$0.0025	77,595		73,845	12 months	14%
Debenture 82	9/10/14	$0.01	8,000		8,000	12 months	14%
Debenture 83	9/10/14	$0.01	15,000		15,000	12 months	14%
Debenture 85	9/17/14	Variable	5,000		5,000	6 months	5%
Debenture 87	9/24/14	Variable	140,995		140,995	6 months	5%
Debenture 88	10/1/14	$0.00025	16,378		13,878	12 months	14%
Debenture 90	10/27/14	$0.01	50,000		50,000	12 months	14%
Debenture 92	10/31/14	$0.0025	63,097		63,097	12 months	16%
Debenture 96	3/27/15	Variable	128,460		111,670	12 months	8%
Debenture 97	1/18/15	Variable	7,500		7,500	12 months	14%
Debenture 98	2/12/15	$0.0145	12,500		12,500	12 months	14%
Debenture 99	3/31/15	$0.01	112,972		112,972	12 months	14%
Debenture 100	2/2/15	Variable	79,115		79,115	12 months	12%
Debenture 101	2/2/15	Variable	45,000		45,000	12 months	12%
Debenture 102	2/24/15	$0.0025	10,000		9,000	12 months	14%
Debenture 104	3/12/15	Variable	25,000		25,000	12 months	14%
Debenture 105	3/21/15	$0.0025	30,000		30,000	12 months	14%
Debenture 106	1/5/15	Variable	15,000		15,000	6 months	15%
Debenture 107	1/5/15	Variable	15,000		5,300	6 months	15%
Debenture 109	2/11/15	Variable	25,000		25,000	12 months	8%
Debenture 110	2/26/15	Variable	16,000		16,000	12 months	8%
Debenture 111	3/4/15	Variable	27,500		27,500	12 months	8%
Debenture 112	3/1/15	$0.0015	10,000		10,000	12 months	14%
Debenture 114	4/2/15	Variable	26,947		24,447	12 months	8%
Debenture 115	4/2/15	$0.001	23,660		23,660	12 months	14%
Debenture 116	3/31/15	Variable	14,000		14,000	6 months	15%
Debenture 117	4/14/15	Variable	20,000		20,000	6 months	15%
Debenture 118	4/27/15	Variable	25,000		25,000	12 months	14%
Debenture 119	3/31/15	Variable	14,000		14,000	6 months	15%
Debenture 120	5/27/15	$0.0025	7,500		7,500	12 months	14%
Debenture 121	7/2/15	$0.0025	175,000		175,000	12 months	14%
Debenture 122	7/3/15	Variable	238,894		221,894	12 months	8%
Debenture 126	9/8/15	$0.0025	112,663		112,663	12 months	14%
Debenture 128	9/15/15	$0.0025	10,000		10,000	12 months	14%
Debenture 129	9/8/15	$0.0050	2,000		2,000	12 months	14%
Debenture 130	10/12/15	$0.0050	15,000		15,000	12 months	14%
Debenture 131	10/12/15	$0.0050	20,000		20,000	12 months	14%
Debenture 132	10/15/15	$0.0025	10,750		10,750	12 months	14%
Debenture 134	10/20/15	$0.0050	10,000		10,000	12 months	14%
Debenture 135	12/5/15	$0.0050	10,000		10,000	12 months	14%
Debenture 137	12/18/15	$0.0050	20,000		20,000	12 months	14%
Debenture 138	1/7/16	Variable	50,000		50,000	12 months	14%
Debenture 139	1/11/16	Variable	25,000		25,000	12 months	14%
Debenture 140	1/25/16	Variable	10,000		10,000	12 months	14%
Debenture 141	1/29/16	Variable	125,000		125,000	12 months	16%
Debenture 146	5/10/16	Variable	50,000		50,000	12 months	14%

Total			$ 3,206,523		2,966,957
Less discount					(218,841)

Net					$ 2,748,116

The following is a schedule of long-term convertible debentures outstanding as of June 30, 2016:

The convertible debentures are generally unsecured and bear interest ranging from 5% to 22% per annum, with maturities ranging from six months to two years. The outstanding principal and accrued interest of the debentures are convertible into shares of the Company's common stock at a fixed conversion price ranging from $0.00025 to $30.00 per share or variable discounted pricing based on the market price of the Company's common stock as defined in the debt agreement.

We evaluated the convertible debentures in accordance with ASC Topic 815, "Derivatives and Hedging," and determined that the conversion feature of the convertible promissory notes with variable conversion prices were not afforded the exemption for conventional convertible instruments due to their variable conversion rates. The notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. We elected to recognize the notes under paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. We elected to initially and subsequently measure the notes in their entirety at fair value, with changes in fair value recognized in earnings. We recorded a derivative liability and debt discount representing the imputed interest associated with the embedded derivative.

For those convertible debentures with fixed conversion prices, we recorded a beneficial conversion feature at the inception of the debt to additional paid-in capital and to debt discount where the conversion price was less that the market price of the stock.

At June 30, 2016, the convertible debentures and related accrued interest payable were convertible into approximately 6,698,670,000 shares of our common stock. Based on the assumptions used to estimate the fair value of the derivative liability at June 30, 2016 and assuming all lenders convert the notes payable at the June 30, 2016 conversion prices, the Company would have insufficient authorized shares of common stock to complete the debt conversions.

As of June 30, 2016, $2,062,129 of the convertible debentures were delinquent. We believe we have good relationships with the holders of the delinquent debentures, and we continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due. Several of the convertible debentures have default interest rates that apply when the debentures are delinquent, and we have accrued default interest where applicable. In addition, we have been unable to complete certain conversions of convertible debentures during the year ended December 31, 2015, pending an increase in the number of authorized shares of our common stock, and have accrued applicable penalties as of June 30, 2016 and December 31, 2015.

Accrued interest payable for the convertible debentures, including accrued default interest and penalties, where applicable, totaled $1,982,955 and $1,141,478 as of June 30, 2016 and December 31, 2015, respectively.