4. DERIVATIVE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Derivative Liabilities Ratchet Feature

	Warrants with convertible Debt			Warrants with subscription agreement			Warrants issued for services			Total
Fair value at the commitment date		87,189			259,278			—			346,467
Fair value mark to market adjustment		429,948			323,293			—			753,241
Balances as of December 31, 2014		517,137			582,571			—			1,099,708
Fair value at the commitment date-in the first quarter of 2015		125,708			—			43,704			169,412
Fair value mark to market adjustment		(24,677	)		(17,841	)		(219	)		(42,737	)
Balances as of March 31, 2015		618,168			564,730			43,485			1,226,383

Derivative Liabilities Assumptions Used

	Commitment Date			Remeasurement Date
Expected dividends		0	%		0	%
Expected volatility		150	%		150	%
Expected term		3 years			1.98 – 2.92 years
Risk free interest rate		0.75% - 1.1	%		0.89	%