SECURED CONVERTIBLE NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2015

Secured Convertible Notes Payable Tables

Significant Assumptions used

At December 31, 2015, the 13,333 ratchet warrants granted at December 31, 2014 were re-valued using the Black-Scholes Pricing Model at $6,633, a decrease in fair value of $116,174 from December 31, 2014 ($122,807).

The significant assumptions utilized by the Company in the valuation of these warrants at December 31, 2015 and 2014 were as follows:

                                                                      2015                  2014

Market Price:                                                 $0.55                 $10.00

Exercise Price:                                               $0.30               $6.00

Volatility:                                                        149%                 144%

Dividend Yield:                                                 zero                  zero

Term in years:                                             3.1 and 4.0         4.1 and 5

Risk Free Rate of Return:                                1.76%                0.165%

The outstanding warrants for 26,884 common shares at December 31, 2015, held by the January and April 2013 private placement investors do not have a cashless exercise and were not affected by the reset provision. The Company re-valued these warrants at December 31, 2015 using the Black-Scholes Pricing Model at $0, a decrease in fair value of $94,115 at December 31, 2014. The decrease in this derivative liability during 2014 amounted to $874,228.

The significant assumptions utilized by the Company in the valuation of these warrants were as follows:

                                                       2015            2014

Market Price:                                   $0.55           $10.00

Exercise Price:                                 $30.00        $30.00

Volatility:                                          149%           144%

Dividend Yield:                                 zero              zero

Term in years:                                   >1         1.3 and 1.02

Risk Free Rate of Return:                1.31%            0.25%

Summary of Convertible Notes

	Face Amount		Unamortized Discount			Carrying Value
December 31, 2014	$	445,000	$	(445,000	)		-
2015 Amortization				445,000		$	445,000
Sept 2015 Issue	$	275,000		(275,000	)		-
2015 Amortization				164,288			164,288
Dec 2015 issue	$	550,000		(550,000	)		-
December 31, 2015		1,270,000	$	(660,712	)	$	609,288