Annual report pursuant to Section 13 and 15(d)

NOTE 7: DERIVATIVE LIABILITIES (Tables)

NOTE 7: DERIVATIVE LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

The Company estimated the fair value of the derivative liabilities using the Black-Scholes option pricing model and the following key assumptions during 2014 and 2013

	2014			2013
Expected dividends		-	%		-	%
Expected term (years)		0.01 – 1.00			0.17 – 5.01
Volatility		171% - 223	%		105% - 155	%
Risk-free rate		0.01% - 0.25	%		0.09% - 1.34	%

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table sets forth by level with the fair value hierarchy the Company’s assets and liabilities measured at fair value as of December 31, 2014 and 2013:

	Level 1		Level 2		Level 3		Total
December 31, 2014:
Derivative liabilities	$	-	$	-	$	1,765,695	$	1,765,695

December 31, 2013:
Derivative liabilities	$	-	$	-	$	355,281	$	355,281

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The below table presents the change in the fair value of the derivative liabilities during the years ended December 31, 2014 and 2013:

Fair value as of December 31, 2012	$	-
Fair value on the date of issuance		426,135
Resolution of derivatives		(40,641	)
Gain on change in fair value of derivatives		(30,213	)
Fair value as of December 31, 2013		355,281
Fair value on the date of issuance recorded as debt discounts		1,645,816
Fair value on the date of issuance recognized as loss on derivatives		1,673,759
Fair value on the date of issuance reclassified from equity		6,026
Resolution of derivatives		(1,685,616	)
Gain on change in fair value of derivatives		(229,571	)
Fair value as of December 31, 2014	$	1,765,695