4. DERIVATIVE LIABILITIES (Tables) - Quarterly Report

6 Months Ended

Jun. 30, 2015

Derivative Liabilities

	Warrants with Convertible Debt			Warrants with Issuance of Common Stock			Warrants Issued For Services			Total
Fair value at the commitment date	$	87,189		$	259,278		$	0		$	346,467
Fair value mark to market adjustment		429,948			323,293						753,241
Balances as of December 31, 2014		517,137			582,571			0			1,099,708
Fair value at the commitment date - in first quarter 2015		125,708			0			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
Fair value at the commitment date - in second quarter 2015								51,378			51,378
Reclassified to additional paid-in capital due to amendment of agreements.		(618,168)			(273,161	)		–			(835,593	)
Balances as of June 30, 2015	$	0		$	291,569		$	94,863		$	386,432

Assumptions Used

	Commitment Date		Remeasurement Date
Expected dividends		0%		0%
Expected volatility		150%		150%
Expected term		3-5 years		1.83 – 4.70 years
Risk free interest rate		0.75% - 1.1%		0.89%-1.35%