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Fair Value Measurements
9 Months Ended
Sep. 30, 2011
Fair Value Measurements
5.         Fair Value Measurements

The Company has adopted Fair Value Measurements and Disclosure Topic of the FASB.  This Topic applies to certain assets and liabilities that are being measured and reported on a fair value basis.  The Fair Value Measurements Topic defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements.  This Topic enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Topic requires that financial assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.

Assets/Liabilities Measured at Fair Value on a Recurring Basis

   
Fair Value Measurement at September 30, 2011
        
   
Quoted Price
    
Significant
              
   
in Active Markets
    
Other
    
Significant
        
   
for Identical
    
Observable
    
Unobservable
        
   
Instruments
    
Inputs
    
Inputs
        
   
Level 1
    
Level 2
    
Level 3
    
Total
  
Assets
                        
Money market investment
   $ -     $ 5,918     $ -     $ 5,918  
                                 
Liabilities
                                
Derivative liabilities
     -       9,465       -       9,465  
 
The Company's financial instruments include cash equivalents, accounts payable derivative instruments. Only cash equivalents, and derivatives are carried at their fair value. Due to the short-term maturity of accounts payable, the carrying value of these instruments is a reasonable estimate of their fair value. The derivative liability instruments include warrants denominated in a currency other than the Company’s functional currency and options issued to contractors in a currency other than the functional currency of the Company. The warrants are carried at fair value and calculated using the Black-Scholes option pricing model using the following assumptions; expected dividend 0%; risk-free interest rate of 1.13%-1.32%; expected volatility of 133% - 143%; and a 3.6 or 4.5 year expected life. The options also use the Black Scholes model with the following assumptions: expected dividend 0%; risk-free interest rate of 1.43%-1.64% expected volatility of 121%- 136%; and a 6.1-6.9 year expected life.