Schedule of Notes Payable

Notes payable consist of the following:

	June 30, 2015			December 31, 2014
90 day Convertible Notes (Chairman of the Board)	$	2,498,980		$	2,498,980
24 month Convertible Notes ($100,000 to Board member)		225,000			225,000
10 day Note (Board member)		—			42,500
Series A3 15% OID Convertible Notes and Warrants		14,353			11,765
Series B OID Convertible Notes and Warrants		62,289			56,659
1 Year 15% OID Convertible Notes and Warrants		548,525			244,565
Notes Payable, gross		3,349,147			3,079,469
Less LPA amount		(485,980	)		(485,980	)
Notes Payable, net	$	2,863,167		$	2,593,489

Details of notes payable as of June 30, 2015 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
Series A3 15% OID Convertible Notes and Warrants		11,765	⁽¹⁾		14,353	⁽¹⁾		None			0.25		January 2015
Series B OID Convertible Notes and Warrants		80,000			62,289			None			0.23		March 2017
1 Year 15% OID Convertible Notes and Warrants		661,177			548,525			None			0.20		Aug. 2015 – Feb. 2016
Notes Payable, gross	$	3,476,922			3,349,147
Less LPA amount					(485,980	)
Notes Payable, net				$	2,863,167

(1) Includes $2,588 of accrued loss on conversion of OID note.

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
Expected term	2 years
Volatility	184.88	%
Risk Free Rate	0.32	%

Schedule of Debt Conversion

Presented below is summary information related to the conversion:

Statement of Operations
Loss on conversion of notes	$	43,288
Accelerated interest expense	$	35,109

Balance Sheet
Shares issued as of June 30, 2014		798,825
Shares to be issued subsequent to June 30, 2014		529,415
Principal amount of notes converted	$	265,648

Presented below is summary information related to the conversion:

Statement of Operations
Loss on conversion of notes	$	2,588
Accelerated interest expense	$	—

Balance Sheet
Shares issued		—

Principal amount of notes converted	$	11,765

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

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	$	197,521
Private Offering Warrants		46,097
Beneficial Conversion feature		13,382
Total	$	257,000

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

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

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