Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments

Derivative Financial Instruments
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Note 9 - Derivative Financial Instruments

The balance sheet caption derivative liability consisted of derivative features embedded in exercisable warrants which had a ratchet provision within their agreements. The balance at March 31, 2015 and December 31, 2014 was $nil and $1,577,640, respectively.


The valuation of the derivative liability is determined using a Black-Scholes Model because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the Black-Scholes model at March 31, 2015 and December 31, 2014 include the following:


March 31, 2015         December 31, 2014      
Risk-free interest rate     0 %   Risk-free interest rate     1.65 %
Estimated volatility     0 %   Estimated volatility     232.6 %
Dividend rate   None     Dividend rate   None  
Estimated term in years     0     Estimated term in years     4