DERIVATIVE LIABILITIES

6 Months Ended

Jun. 30, 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 preferred stock and warrants. This ratchet provision results in a derivative liability in our financial statements.

Our derivative liabilities increased to $899,530 at June 30, 2015 from $20,166 at December 31, 2014.  The expense recognized during the first six months ended June 30, 2015 was $1,422,308 as compared to the gain recognized of $34,383 for the six months ended June 30, 2014.

The following tabular presentation reflects the components of derivative financial instruments on the Company’s balance sheet at June 30, 2015 and December 31, 2014:

	6/30/2015			12/31/2014
Common stock warrants	$	129,923		$	20,166
Embedded conversion features for convertible debt or preferred shares		769,607			-
Total	$	899,530		$	20,166
Beginning balance	$	20,166		$	95,049
Change in derivative liabilities due to settlements		(542,944	)		-
Change in derivative liability valuation		1,422,308			(74,883	)
Ending balance	$	899,530		$	20,166