DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITY

As a result of having warrants which are outstanding, issued in connection with a 2012 Credit Facility (which was terminated in October 2014), the Company is required to record the changes in the value of these derivative warrants through their expirations in November 2017. Additionally as indicated in Note 5 above, Notes and Warrants issued in connection with the Company’s January and May 2016 financing, included certain price/conversion features, which require them to be accounted for as derivatives.

The table below presents the changes in the derivative liability, which is measured at fair value on a recurring basis and classified as Level 3 in fair value hierarchy:

	06/30/16			12/31/15
Derivative liabilities as of January 1	$	127,000		$	208,155
Secured convertible note derivatives:
Warrants		2,147,574			—
Embedded conversion feature in Notes		3,173,896			—
Loss (gain) on revaluation		(761,950	)		(81,155	)
Derivative liabilities as of end of period	$	4,686,520		$	127,000

None of the derivative warrants were exercised in 2016 or 2015 pursuant to cashless exercise provisions.