DERIVATIVE INSTRUMENT LIABILITIES

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

NOTE 11. DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities at December 31, 2015, was determined to be $787,438 with the following assumptions: (1) risk free interest rate of 0.14% to 0.878%, (2) remaining contractual life of 0.01 to 1.561years, (3) expected stock price volatility of 107.16% to 322.577%, and (4) expected dividend yield of zero. Based upon the change in fair value, the Company has recorded a loss on derivative instruments for the year ended December 31, 2015, of $285,760 and a corresponding increase in the derivative instruments liability.

	Derivative		Derivative		Loss for
	Liability as of		Liability as of		year ended
	December 31, 2014		December 31, 2015		December 31, 2015
Warrants	$	-	$	1,043,217	$	1,043,217
Amount allocated to note discounts at inception						423,195
Loss for year ended December 31, 2015					$	620,022

The entire amount of derivative instrument liabilities are classified as current due to the fact that settlement of the derivative instruments could be required within twelve months of the balance sheet date.