CONVERTIBLE DEBT	6 Months Ended
Jun. 30, 2014
Notes to Financial Statements
Note 5. CONVERTIBLE DEBT	On October 1, 2011, the Company issued a convertible credit line of $500,000 with a 10% interest rate per annum. The amount drawn plus any accrued interest is convertible into shares of the Company’s common stock at a rate of 85% multiplied by the average market price of the previous 30 days trading prior to the conversion. As of June 30, 2014 and December 31, 2013, the amount drawn is $497,440 and $497,440, respectively. The total accrued interest as of June 30, 2014 and December 31, 2013 is $92,304 and $72,157, respectively. See note 4. In accordance with ASC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability. The Company uses the Black-Scholes option pricing model to value the separate derivative liabilities for each of the draws against the credit line. Included in the model are the following assumptions: stock price at valuation date of $0.03 (2013: $0.01-$0.30), exercise price of $0.03 (2013: $0.03-$0.27), dividend yield of zero (2013: zero), years to maturity of 0.50 (2013: 0.08-1 year), a risk free rate of 0.11% (2013: 0.12%-0.16%), and annualized volatility of 294% (2013: 93%-325%). The Company recognized a derivative expense of $0 and $0 during the three and six months ended June 30, 2014 and 2013, respectively. ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as another income or expense item. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with the above convertible debt. During the three and six months ended June 30, 2014, the Company recorded a change in fair market value of derivative liability of $(1,598) and $(120,538) (2013: $7,791 and $69,866), respectively, in relation to the aforementioned credit line. During the three and six months ended June 30, 2014 and 2013, $0 and $0 (2013: $11,688 and $21,229), respectively, of debt discount was amortized.

CONVERTIBLE DEBT

6 Months Ended

Jun. 30, 2014

On October 1, 2011, the Company issued a convertible credit line of $500,000 with a 10% interest rate per annum. The amount drawn plus any accrued interest is convertible into shares of the Company’s common stock at a rate of 85% multiplied by the average market price of the previous 30 days trading prior to the conversion. As of June 30, 2014 and December 31, 2013, the amount drawn is $497,440 and $497,440, respectively. The total accrued interest as of June 30, 2014 and December 31, 2013 is $92,304 and $72,157, respectively. See note 4.

In accordance with ASC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The Company uses the Black-Scholes option pricing model to value the separate derivative liabilities for each of the draws against the credit line. Included in the model are the following assumptions: stock price at valuation date of $0.03 (2013: $0.01-$0.30), exercise price of $0.03 (2013: $0.03-$0.27), dividend yield of zero (2013: zero), years to maturity of 0.50 (2013: 0.08-1 year), a risk free rate of 0.11% (2013: 0.12%-0.16%), and annualized volatility of 294% (2013: 93%-325%). The Company recognized a derivative expense of $0 and $0 during the three and six months ended June 30, 2014 and 2013, respectively.

ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as another income or expense item. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative liability associated with the above convertible debt. During the three and six months ended June 30, 2014, the Company recorded a change in fair market value of derivative liability of $(1,598) and $(120,538) (2013: $7,791 and $69,866), respectively, in relation to the aforementioned credit line. During the three and six months ended June 30, 2014 and 2013, $0 and $0 (2013: $11,688 and $21,229), respectively, of debt discount was amortized.

DEAL A DAY GROUP CORP. 10-Q