Derivative Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

10. Derivative Financial Instruments:

The Company generally does not use derivative instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. However, certain other financial instruments, such as warrants and embedded conversion features that are indexed to the Company’s Common Stock, are classified as liabilities when either: (a) the holder

possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the control of the Company. In such instances, net-cash settlement is assumed for financial accounting and reporting, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded at fair value estimated on the settlement date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate, and then adjusted to fair value at the close of each reporting period.

The following tabular presentation reflects the components of derivative financial instruments as of December 31, 2013, 2012 and 2011.

	2013			2012			2011
Derivative gain (loss) in the accompanying statements of operations is related to the individual derivatives as follows:
Free standing warrants assets, related party	$	(50,300	)	$	(338,500	)	$	(910,231	)
Free standing warrants liabilities		171,528			(5,255,652	)		4,373,684
	$	121,228		$	(5,594,152	)	$	3,463,453

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2013 and December 31, 2012, respectively:

	2013								2012
Fair Value Measurements Using:	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Derivative asset, warrant	$	—	$	—	$	—	$	—	$	—	$	50,300	$	—	$	50,300
Liabilities
Derivative liabilities	$	—	$	4,315,183	$	—	$	4,315,183	$	—	$	4,497,977	$	—	$	4,497,977

The table below provides a reconciliation of the beginning and ending balances for the assets and liabilities measured at fair value using significant observable inputs (Level 2). The table reflects net gains and losses for all financial assets and liabilities categorized as Level 2 as of December 31, 2012 and 2013.

Fair Value Measurements Using Significant Observable Inputs (Level 2)

	Value of Warrants			Number of Warrants
Assets:
Warrant asset as of January 1, 2012	$	388,540			2,000,000
Decrease in fair value of warrants		(338,240	)		—
Warrant asset as of December 31, 2012	$	50,300			2,000,000
Decrease in fair value of warrants		(50,300	)		(2,000,000	)
Warrant asset as of December 31, 2013	$	—			—
Liabilities:
Warrant liability as of January 1, 2012	$	279,302			3,246,301
Decrease due to exercise of warrants		(1,037,237	)		(236,865	)
Expiration of warrants		—			(1,000,000	)
Increase in fair value of warrants		5,255,912			—
Warrant liability as of December 31, 2012	$	4,497,977			2,009,436
Decrease due to exercise of warrants		(11,266	)		(10,000	)
Decrease in fair value of warrants		(171,528	)		—
Warrant liability as of December 31, 2013	$	4,315,183			1,999,436