NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2014

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Notes Payable

Notes payable consist of the following:

	March 31,  2014			December 31,  2013
90 day Convertible Notes (Chairman of the Board)	$	2,498,980		$	2,518,000
24 month Convertible Notes ($100,000 to Board member)		225,000			225,000
Tonaquint 9% OID Convertible Notes and Warrants		118,536			87,705
Southridge Convertible Note		12,000			12,000
Series A1 15% OID Convertible Notes and Warrants		100,076			81,415
Series A2 15% OID Convertible Notes and Warrants		91,127			69,571
Series A3 15% OID Convertible Notes and Warrants		37,007			-
Series B OID Convertible Notes and Warrants		34,272			-
Notes Payable, gross		3,116,998			2,933,691
Less LPA amount		(485,980	)		(505,000	)
Notes Payable, net	$	2,631,018		$	2,488,691

Details of notes payable as of March 31, 2014 are as follows:

	Principal Amount		Carrying Value			Cash Interest Rate			Common Stock Conversion Price		Maturity Date
90 day Convertible Notes (Chairman of the Board)	$	2,498,980	$	2,498,980			6	%	$	1.05	Various 2014
24 month Convertible Notes ($100,000 to Board member)		225,000		225,000			6	%		1.05	March 2014 - June 2014
Tonaquint 9% OID Convertible Notes (1)		112,500		118,536			7	%		0.30	May 2014
Southridge Convertible Note		12,000		12,000			None			75% of closing bid	June 2014
Series A1 15% OID Convertible Notes and Warrants		149,412		100,076			None			0.20	August 2014
Series A2 15% OID Convertible Notes and Warrants		134,236		91,127			None			0.25	September 2014
Series A3 15% OID Convertible Notes and Warrants		64,706		37,007			None			0.25	January 2015
Series B OID Convertible Notes and Warrants		80,000		34,272			None			0.35	March 2017
Notes Payable, gross	$	3,276,834		3,116,998
Less LPA amount				(485,980	)
Notes Payable, net			$	2,631,018

  (1) Original terms noted above. The Company executed a debt settlement agreement with Tonaquint during the first quarter of 2014, cash-settled the warrant during the first quarter of 2014 and cash-settled the note during the second quarter of 2014. See further discussion below under "Tonaquint 9% Original Issue Discount Convertible Notes and Warrants".

Schedule of 90 day Convertible Notes

The Company has issued 90-day notes payable to borrow funds from a director, now the chairman of our Board, as follows:

2013	$	1,188,980
2012		1,210,000
2011		100,000
Total	$	2,498,980

Series A 15% Original Issue Discount Convertible Notes and Warrants [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Estimated Fair Value of Notes Assumptions

We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions:

	Warrants (Tranche 1)- November 15, 2013			Warrants (Tranche 2)- December 30, 2013			Warrants (Tranche 3)- February 14, 2014
Expected term		2 years			2 years			2 years
Volatility		180.02	%		184.38	%		184.88	%
Risk Free Rate		0.31	%		0.39	%		0.32	%

Schedule of Proceeds of Notes Allocation

The proceeds of the Notes issued during the three months ended March 31, 2014 were allocated to the components as follows:

	Proceeds allocated at issue date
Private Offering Notes	$	32,390
Private Offering Warrants		14,845
Beneficial Conversion feature		7,765
Total	$	55,000

Series B Original Issue Discount Convertible Notes and Warrants [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Estimated Fair Value of Notes Assumptions

We estimated the fair value of the warrants on the issue date using a Black-Scholes pricing model with the following assumptions:

	Warrants March 20, 2014
Expected term		4 years
Volatility		151.52	%
Risk Free Rate		1.32	%

Schedule of Proceeds of Notes Allocation

The proceeds of the Notes were allocated to the components as follows:

	Proceeds allocated at issue date
Private Offering Notes	$	34,272
Private Offering Warrants		26,811
Beneficial Conversion feature		3,917
Total	$	65,000