Annual report pursuant to section 13 and 15(d)

22. Fair Value Disclosures

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22. Fair Value Disclosures
 12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
22. 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  
Non-current liabilities:                  
For the year ended December 31, 2013:                      
Derivative liability       $ 10,515,472       $ 10,515,472  
For the year ended December 31, 2012:                      
Derivative liability       $ 1,066,000       $ 1,066,000