Quarterly report pursuant to sections 13 or 15(d)

17. Fair Value Disclosures

17. Fair Value Disclosures
9 Months Ended
Sep. 30, 2013
Notes to Financial Statements  
15. Fair Value Disclosures

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:


Level 1—Quoted prices in active markets for identical assets or liabilities

Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3—No observable pricing inputs in the market


The following table represents the fair value of the liability measured at fair value on a recurring basis:


    Level 1     Level 2     Level 3     Total  
As of September 30, 2013                        
Non-current liabilities:                        
Derivative liability (see note 7)   $ -     $ 1,798,875     $ -     $ 1,798,875  
As of December 31, 2012                                
Non-current liabilities:                                
Derivative liability   $ -     $ 1,066,000     $ -     $ 1,066,000