DERIVATIVE INSTRUMENT LIABILITIES

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

NOTE 8. DERIVATIVE INSTRUMENT LIABILITIES

The fair market value of the derivative instruments liabilities at December 31, 2016, was determined to be $5,721,145 with the following assumptions: (1) risk free interest rate of 0.44% to 1.20%, (2) remaining contractual life of 0.01 to 1.40, (3) expected stock price volatility of 444% to 622%, 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, 2016, of $4,157,799 and a corresponding increase in the derivative instruments liability.

	Derivative Liability as of		Derivative Liability as of		Loss for the year ended
	December 31, 2015		December 31, 2016		December 31, 2016
Notes	$	787,438	$	5,721,145	$	4,933,707
Amount allocated to note discounts at inception						775,908
Loss for year ended December 31, 2016					$	4,157,799