CONVERTIBLE DEBT	6 Months Ended
Jun. 30, 2015
Convertible Debt
CONVERTIBLE DEBT	NOTE 9 – CONVERTIBLE DEBT During the quarter ended June 30, 2015, the Company issued convertible debentures to investors in the aggregate principal amount of $850,000. The convertible debentures (i) are secured, (ii) bear interest at the rate of 10% per annum, and (iii) are due the earlier of one year from the date of issuance or upon the closing of a debt or equity financing in excess of $2,000,000. The convertible debentures are convertible at any time at the option of the investor into shares of the Company’s common stock that is determined by dividing the amount to be converted by $0.03. However, the conversion prices ranging from $0.03 to $0.055 can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the conversion price. In connection with the issuance of these convertible debentures, the Company also issued to each investor an aggregate of 19,490,909 warrants to purchase shares of the Company common stock. The warrants have an exercise prices ranging from $0.05 to $0.055 per share and expire five years from the date of issuance. However, the exercise price can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the exercise price. Due to the potential adjustment in the conversion price associated with these convertible debentures and the potential adjustment in the exercise price of the warrants, the Company has determined that the conversion feature and warrants are considered derivative liabilities. The embedded conversion feature and the fair value of the warrants was initially calculated to be $2,408,670 and $1,621,454, respectively, which are recorded as a derivative liability as of the date of issuance. The derivative liability was first recorded as a debt discount up to the face amount of the convertible debentures of $850,000 with the remaining $3,180,124 begin charged as a derivative expense because of the excess of derivative expense than the carrying value of the note of $850,000. The Company recognized interest expense of $67,918 during the quarter ended June 30, 2015 related to the amortization of the debt discount. As of June 30, 2015, the convertible notes payable net of note discount is $67,918.

CONVERTIBLE DEBT

6 Months Ended

Jun. 30, 2015

NOTE 9 – CONVERTIBLE DEBT

During the quarter ended June 30, 2015, the Company issued convertible debentures to investors in the aggregate principal amount of $850,000. The convertible debentures (i) are secured, (ii) bear interest at the rate of 10% per annum, and (iii) are due the earlier of one year from the date of issuance or upon the closing of a debt or equity financing in excess of $2,000,000. The convertible debentures are convertible at any time at the option of the investor into shares of the Company’s common stock that is determined by dividing the amount to be converted by $0.03. However, the conversion prices ranging from $0.03 to $0.055 can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the conversion price.

In connection with the issuance of these convertible debentures, the Company also issued to each investor an aggregate of 19,490,909 warrants to purchase shares of the Company common stock. The warrants have an exercise prices ranging from $0.05 to $0.055 per share and expire five years from the date of issuance. However, the exercise price can be adjusted downward if certain conditions take place such as the Company issuing securities for a price less than the exercise price.

Due to the potential adjustment in the conversion price associated with these convertible debentures and the potential adjustment in the exercise price of the warrants, the Company has determined that the conversion feature and warrants are considered derivative liabilities. The embedded conversion feature and the fair value of the warrants was initially calculated to be $2,408,670 and $1,621,454, respectively, which are recorded as a derivative liability as of the date of issuance. The derivative liability was first recorded as a debt discount up to the face amount of the convertible debentures of $850,000 with the remaining $3,180,124 begin charged as a derivative expense because of the excess of derivative expense than the carrying value of the note of $850,000. The Company recognized interest expense of $67,918 during the quarter ended June 30, 2015 related to the amortization of the debt discount. As of June 30, 2015, the convertible notes payable net of note discount is $67,918.