Derivative Financial Instruments

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS

Pursuant to additional financing, in the year ended December 31, 2015 and for the three months ended March 31, 2016 the Company did not enter into any convertible note agreements. Prior convertible notes had conversion prices into common stock that ranged from a discount of 30% to 45% of the lowest closing prices in the 10 to 20 trading days prior to the conversion. Under provisions of ASC Topic 815-40, this conversion feature triggered derivative accounting treatment because the convertible note was convertible into an indeterminable number of shares of common stock. The fair value of the embedded conversion option was required to be presented as a derivative liability and adjusted to fair value at each reporting date, with changes in fair value reported in the condensed consolidated statements of operation.

In the three months ended March 31, 2016, the Company recorded a $8,192 non-cash charge to interest expense (reflective of debt discount amortization), and $2,321 of derivative gains related to adjusting the derivative liability to fair value. At March 31, 2016, the derivative related fair value of debt was $381,161.

The Company calculates the estimated fair values of the liabilities for derivative instruments at each quarter-end using the BSM option pricing model and Stochastic Process Forecasting models (Monte Carlo simulations). Volatility, expected term and risk free interest rates used to estimate the fair value of derivative liabilities are indicated in the table below. The volatility was based on historical volatility, the expected term is equal to the remaining term of the debt and the risk free rate is based upon rates for treasury securities with the same term.

	3 Months Ended March 31, 2016		Year Ended December. 31, 2015
Volatility		91%		87% - 171%
Risk Free Rate		.21%		.1% - 1.75%
Expected Term (years)		0 – 1.05		0 - 3
Dividend Rate		0%		0%