Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Balances of Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of liabilities measured at fair value on a recurring basis by level as of June 30, 2014:

	Fair Value Measurements Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
As of June 30, 2014
Derivative liability	$	-	$	-	$	1,064,552	$	1,064,552
Warrant liability		-		-		2,091,631		2,091,631
Total	$	-	$	-	$	3,156,183	$	3,156,183

Changes in Liabilities with Significant Unobservable Inputs (Level 3)

The following table presents changes in the liabilities with significant unobservable inputs (Level 3) for the nine months ended June 30, 2014:

	Warrant		Derivative		Total
	Liability		Liability		Liability
Balance December 31, 2013	$	803,484	$	300,939	$	1,104,423
Liability on issuance of debt and warrants		-		-		-
Change in estimated fair value (1)		1,288,147		763,613		2,051,760
Elimination of liability on conversion		-		-		-
Balance June 30, 2014	$	2,091,631	$	1,064,552	$	3,156,183

(1) Included in the Condensed Statements of Operation on the line “Change in fair value of derivative and warrant liabilities.”

Derivative and Warrant Liabilities

Management used the following inputs to value the Derivative and Warrant Liabilities for the six months ended June 30, 2014:

	Derivative Liability	Warrant Liability
Expected term	6 months - 1 year	5 years
Exercise price	$0.045 - $0.099	$0.075 - $0.1287
Expected volatility	238% to 242%	189% to 190%
Expected dividends	None	None
Risk-free interest rate	0.11% to 0.13%	1.62% to 1.73%
Forfeitures	None	None