• Filing Date: 2018-01-12
  • Form Type: 10-Q
  • Description: Quarterly report
v3.8.0.1
ORGANIZATION AND BASIS OF PRESENTATION (Tables)
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of carrying value and fair value of derivative instruments

The Company has determined that certain outstanding convertible debt instruments include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.

  

   Carrying
Value
   Fair Value Measurements 
Using Fair Value Hierarchy
 
       Level 1   Level 2   Level 3 
Derivative liability – December 31, 2016  $1,525,135   $   $   $1,525,135 
Derivative liability – September 30, 2017  $1,899,414   $   $   $1,899,414 
                     
Balance at December 31, 2016                 $1,525,135 
Revaluation of derivative arising from insufficient shares available for issuance                  (300,766)
New embedded derivatives issued with indebtedness                  2,048,072 
Conversion                  (566,593)
Change in derivative liability during the nine months ended September 30, 2017                  (806,434)
Balance September 30, 2017                 $1,899,414