CONVERTIBLE DEBT	9 Months Ended
Sep. 30, 2015
Convertible Debt
CONVERTIBLE DEBT	NOTE 10 – CONVERTIBLE DEBT During the nine months ended September 30, 2015, the Company issued convertible debentures to investor’s in the aggregate principal amount of $2,212,095. The convertible debentures (i) are secured, (ii) bear interest at the rate of 10 - 12% 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 to $0.10. However, the certain convertible 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 31,734,243 warrants to purchase shares of the Company common stock. The warrants have an exercise prices ranging from $0.05 to $0.15 per share and expire five years from the date of issuance. However, the exercise price of certain warrants 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 certain of these convertible debentures and the potential adjustment in the exercise price of certain 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 $3,078,221 and $2,457,385, 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 with the remaining $4,538,040 being charged as a financing cost expense because of the excess of derivatives was more than the carrying value of the note. The Company recognized interest expense of $421,524 during the nine months ended September 30, 2015 related to the amortization of the debt discount. As of September 30, 2015, the convertible notes payable net of note discount is $262,158.

CONVERTIBLE DEBT

9 Months Ended

Sep. 30, 2015

NOTE 10 – CONVERTIBLE DEBT

During the nine months ended September 30, 2015, the Company issued convertible debentures to investor’s in the aggregate principal amount of $2,212,095. The convertible debentures (i) are secured, (ii) bear interest at the rate of 10 - 12% 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 to $0.10. However, the certain convertible 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 31,734,243 warrants to purchase shares of the Company common stock. The warrants have an exercise prices ranging from $0.05 to $0.15 per share and expire five years from the date of issuance. However, the exercise price of certain warrants 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 certain of these convertible debentures and the potential adjustment in the exercise price of certain 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 $3,078,221 and $2,457,385, 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 with the remaining $4,538,040 being charged as a financing cost expense because of the excess of derivatives was more than the carrying value of the note. The Company recognized interest expense of $421,524 during the nine months ended September 30, 2015 related to the amortization of the debt discount. As of September 30, 2015, the convertible notes payable net of note discount is $262,158.