v3.5.0.2
13. Assets and Liabilities Measured at Fair Value
 12 Months Ended
Dec. 31, 2014
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value

Recurring Fair Value Measurements

 

Liabilities measured at estimated fair value in the consolidated financial statements on a recurring basis include warrants that contain provisions that protect holders from a decline in the issue price of our common stock or that contain net settlement provisions. These warrants are accounted for as liabilities and are remeasured at fair value at each reporting period end. See Note 10 for specifics on the inputs used in determining fair value. At December 31, 2014, there were no assets that were subject to fair value on a recurring basis. No assets and liabilities were subject to fair value on a recurring basis at December 31, 2013.

 

Liabilities measured at estimated fair value on a recurring basis and their corresponding level within the fair value hierarchy at December 31, 2014 is summarized as follows:

 

Description  Level 1   Level 2   Level 3   Total
Fair Value		 
                     
Warrants  $–   $–   $2,033,495   $2,033,495 

 

The following table presents the liabilities carried on the balance sheet by level within the hierarchy as of December 31, 2014 for which a recurring change in fair value has been recorded during the year ended December 31, 2014.

 

   Balance at December 31, 2013   Acquisition Measurement Date
April 2, 2014		   Issuance   (Gain) Loss Recognized in Earnings from Change in Fair Value   Balance at December 31, 2014 
For the Year Ending December 31, 2014                         
Warrants  $–   $1,668,795   $2,407,930   $(2,043,230)  $2,033,495 

 

The gain recognized from the change in the warrants’ fair value was recorded in the other income (expense) section of the consolidated statements of operations within the financial statement line item of change in fair value of warrants.

 

The fair value of these warrants utilized pricing models that utilized a significant number of nonobservable inputs.

 

Nonrecurring Fair Value Measurements

 

The following table presents the assets carried on the balance sheet by level within the hierarchy as of December 31, 2014 for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2014.

 

Description  December 31, 2013   Level 1   Level 2   Level 3   Total Fair Value   Total Losses 
Goodwill  $–   $–   $–   $–   $–   $20,007,173 
Patents   –    –    –    –    –    1,814,816 
Customer relationships   –    –    –    41,585    41,585    1,038,415 
Domain names   –    –    –    –    –    990,000 
Trade names   –    –    –    –    –    765,000 
Trademarks   –    –    –    907,095    907,095    792,905 
   $–   $–   $–   $948,680   $948,680   $25,408,309 

 

Goodwill and other intangible assets were impaired for a total impairment of approximately $25,408,000 during the year ended December 31, 2014. Income approaches were used to estimate fair value of goodwill and other intangible assets. These valuation techniques utilized a significant number of nonobservable inputs. The impairments are presented within the operating expense section of the consolidated statement of operations.

 

See Note 7 for additional details of goodwill and intangible assets as well as the 2014 impairment losses recognized.