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Derivative Liabilities
6 Months Ended
Jun. 30, 2013
Notes  
Derivative Liabilities

DERIVATIVE LIABILITIES

 

The Company accounts for the embedded conversion features included in its convertible instruments. The Company has identified the embedded derivatives related to these convertible loans during the conversion kick in period. During June 30, 2013, the Company determined that these loans became convertible and thus the fair value of the derivative at the kick in period which amounted to $15,000. This amount was charged directly to derivative expense since the debt discount had been calculated and amortized in the prior period.

 

At June30, 2013, the Company marked to market the fair values of the derivative liability amounting to $165,241 and recorded a $81,241 loss.  The fair values of the embedded derivatives were determined using Black Scholes Option Pricing Model based on the following assumptions (1) dividend yield of 0%, (2) expected volatility of 275.45% to 339.78% (3) weighted average risk free rate of 0.11% to 0.15%, expected life of 0.00 to 0.95 year and (5) estimated fair value of the Company’s common stock of $0.0003 to $0.0004 per share.