DERIVATIVE LIABILITIES

3 Months Ended

Mar. 31, 2015

DERIVATIVE LIABILITIES [Abstract]

DERIVATIVE LIABILITIES

NOTE 12 – DERIVATIVE LIABILITIES

Certain of the Company’s convertible preferred stock and warrants have reset provisions to the exercise price if the Company issues equity or other derivatives at a price less than the exercise price set forth in such convertible perferred stock and warrants. This ratchet provision results in a derivative liability in our financial statements.

Our derivative liabilities increased to $2,253,942 at March 31, 2015 from $20,166 at December 31, 2014.  The expense recognized during the first quarter ended March 31, 2015 was $2,233,776 as compared to the gain recognized of $48,188 for the three months ended March 31, 2014.

The following tabular presentation reflects the components of derivative financial instruments on the Company’s balance sheet at March 31, 2015 and December 31, 2014:

	3/31/2015		12/31/2014
Common stock warrants	$	20,166	$	20,166
Embedded conversion features for convertible debt or preferred shares		2,233,776		-
Total	$	2,253,942	$	20,166
Beginning balance	$	20,166	$	95,049
Change in derivative liability valuation		2,233,776		(74,883	)
Ending balance	$	2,253,942	$	20,166