DERIVATIVE INSTRUMENT LIABILITIES

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

NOTE 10. DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities at June 30, 2016, was determined to be $343,839 with the following assumptions: (1) risk free interest rate of .20%, (2) remaining contractual life of .01 years, (3) expected stock price volatility of 304% to 370%, 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 six months ended June 30, 2016, of $1,124,993 and a corresponding increase in the derivative instruments liability.

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.