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Note 7 - Fair Values of Financial Instruments
 6 Months Ended
Jun. 30, 2014
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

7.              FAIR VALUES OF FINANCIAL INSTRUMENTS


Cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and notes payable, are carried at, or approximate, fair value because of their short-term nature.


 The fair value of the warrant liabilities were measured using the following assumptions:


Risk-free interest rate

 

0.60%

 

Expected term

2.32

–

 2.36

Expected dividends

  0  

Volatility of stock price

114.5% –

114.7%


The warrant liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various assumptions about of future activities and the Company’s stock prices and historical volatility as inputs.


Compensatory Warrant

       

Fair value at January 1, 2014

  $ 36,370  

Loss on derivative

    6,211  

Transfer to additional paid-in-capital

    (42,581

)

Value at June 30, 2014

    -  
         

Warrant issued under PI SPA

       

Fair value at January 1, 2014

    206,707  

Loss on derivative

    100,512  

Value at June 30, 2014

    307,219  

Balance, June 30, 2014

  $ 307,219