At September 30, 2015 the Notes totaled $3.0 million and the derivative liability value was determined to be $833,000. For the fiscal year ended September 30, 2015, gains on derivatives liabilities totaled $162,800.

On December 23, 2015, the Company entered into the Second Amended Note & Warrant Agreement, with each of 16 accredited investors, pursuant to which (i) the aggregate principal amount of Notes available for issuance was increased from $3.0 million to up to $6.0 million, (ii) the maturity date of currently outstanding Notes was extended from March 21, 2016 to December 31, 2017; (iii) the time during which Notes may be issued was extended and (iv) certain warrants were issued to holders of both previously issued and newly issued Notes. Consequently, the existing notes totaling $3 million, plus $121,900 of accrued interest thereon, for an aggregate total debt of $3,121,900 was revalued on December 23, 2015, and on the prior trading day, December 22, 2015, to determine the impact on derivative valuation. On December 22, 2015, the derivative liability of the aggregate debt was determined to be $60,200, which resulted in a write down of $772,800 from the derivative liability balance of $833,000 at September 30, 2015, which resulted in a Gain on Derivative Liabilities of $772,800.

On December 23, 2015, all the Notes were revalued with the maturity date extended to December 31, 2017. The derivative liability value was determined to be $1,022,400 and the offset was booked to other income as a Loss on Extinguishment of Debt, adjustment amount of $962,300.

Pursuant to the Second Amended Note & Warrant Agreement, on December 23 and December 28, 2015, the Company issued to the two purchasers of December 2015 Notes in the aggregate principal amount of $1,000,000 of secured convertible promissory notes. Consequently, on December 31, 2015, notes in the aggregate principal amount of $4 million were revalued, and the derivative liability value was determined to be $2,112,900; the offset was booked to other income as a Loss on Derivative Liability of $761,500.

The Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below:

The net changes in the derivative valuation are summarized in the table below:

The gain and (loss) on the accounting for derivative liabilities for the three months ended December 31, 2015 is summarized in the table below:

The gain and (loss) on the accounting for Extinguishment of Debt for the three months ended December 31, 2015 is summarized in the table below:

(1) For Details Refer to the Warrant Section of Note 6. Stockholders’ Deficit

The net changes in Derivative Liabilities for transactions which were booked to other income resulted in a net gain on derivative liabilities of $11,300 for the three months ended December 31, 2015. The three months ended December 31, 2014, we had a net loss on derivative liabilities of $39,900.

The net changes in Extinguishment of Debt for transactions which were booked to other income resulted in a net loss on extinguishment of debt of $2,337,400 for the three months ended December 31, 2015. For the same period in 2014 we had no similar expenses.

As of December 31, 2015 and September 30, 2015 we had derivative liabilities of $2,112,900 and $833,000 respectively.