NOTES PAYABLE (Tables) - Dec. 31, 2014

Total

Total

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

Schedule of Notes Payable

Notes payable consist of the following:

	December 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
10 day Note (Board member)		42,500			-
Tonaquint 9% OID Convertible Notes and Warrants		-			87,705
Southridge Convertible Note		-			12,000
Series A1 15% OID Convertible Notes and Warrants		-			81,415
Series A2 15% OID Convertible Notes and Warrants		-			69,571
Series A3 15% OID Convertible Notes and Warrants		11,765			-
Series B OID Convertible Notes and Warrants		56,659			-
1 Year 15% OID Convertible Notes and Warrants		244,565			-
Notes Payable, gross		3,079,469			2,933,691
Less LPA amount		(485,980	)		(505,000	)
Notes Payable, net	$	2,593,489		$	2,488,691

Details of notes payable as of December 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
10 day Note (Board member)		42,500		42,500			None			None	January 2015
Series A3 15% OID Convertible Notes and Warrants		11,765		11,765			None			0.25	January 2015
Series B OID Convertible Notes and Warrants		80,000		56,659			None			0.23	March 2017
1 Year 15% OID Convertible Notes and Warrants		358,824		244,565			None			0.20	Aug. 2015 – Nov. 2015
Notes Payable, gross	$	3,217,069		3,079,469
Less LPA amount				(485,980	)
Notes Payable, net			$	2,593,489

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	$	1,188,900
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 were allocated to the components as follows:

	Proceeds allocated  at issue date
Private Offering Notes	$	152,703
Private Offering Warrants		91,274
Beneficial Conversion feature		52,123
Total	$	296,100

Schedule of Debt Conversion

Presented below is summary information related to the conversion:

Statement of Operations
Loss on conversion of notes	$	58,366
Accelerated interest expense	$	35,109
Balance Sheet
Shares issued		1,682,946
Principal amount of notes converted	$	336,588

1 Year 15% OID 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  November 7, 2014
Expected term		1 year
Volatility		188.31	%
Risk Free Rate		0.11	%

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	$	224,679
Private Offering Warrants		57,854
Beneficial Conversion feature		22,467
Total	$	305,000

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

Schedule of Debt Conversion

As a result of the triggering of the above noted one time anti-dilution provision, the Company reallocated the proceeds of the Notes during the quarter ended December 31, 2014 as follows:

	Proceeds allocated  at issue date
Private Offering Notes	$	46,222
Private Offering Warrants		18,778
Beneficial Conversion feature		-
Total	$	65,000