v2.4.0.6
Note 4 - Fair Value
 3 Months Ended
Mar. 31, 2013
Fair Value Disclosures [Text Block]
NOTE 4 – FAIR VALUE

Authoritative guidance relating to fair value establishes a framework for measuring fair value and expands disclosure about fair value measurements except as it applies to non-financial assets and non-financial liabilities. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued expenses. The carrying amounts of these financial instruments approximate fair value due to their short maturities. The following is the fair value hierarchy for disclosure of fair value measurements:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 - Inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

In connection with the Embedded Derivative in the Rho Notes discussed below in Note 6 – 2012 Financing, the Company evaluates the fair value measurement of the Embedded Derivative on a recurring basis to determine the appropriate fair value level to classify the Embedded Derivative at each reporting period. This determination requires significant estimates and judgments by the Company. The following table sets forth the Company’s liabilities that were measured at fair value as of March 31, 2013, by level within the fair value hierarchy:

           
Quoted Prices in
                 
           
Active Markets
   
Significant
   
Significant
 
           
for Identical
   
Observable
   
Unobservable
 
           
Assets
   
Inputs
   
Inputs
 
   
March 31, 2013
   
(Level 1)
   
(Level 2)
   
(Level 3)
 
                                 
Liabilities:
                               
                                 
Embedded derivative financial liability to related party stockholders
 
$
250,000
   
$
--
   
$
250,000
   
$
--
 
                                 
Total embedded derivative financial liability to related party stockholders
 
$
250,000
   
$
--
   
$
250,000
   
$
--