Derivative Liabilities (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Liabilities [Abstract]

Schedule of Assumptions Used

The estimated fair values of the derivative liabilities for the conversion options on the 8% Notes issued during the three months ended March 31, 2013 and the warrants issued therewith, were computed by a third party using Monte Carlo simulations based on the following ranges for each assumption:

	At Issuances			March 31, 2013
Volatility		50.0	%		50.0	%
Risk-free interest rate		0.4	%		0.3	%
Dividend yield		0.0	%		0.0	%
Expected life		2.4 to 2.6 years			2.4 years

Financial Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the financial liabilities measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	As of March 31, 2013
							Derivative
							Liabilities at
	Level 1		Level 2		Level 3		Fair Value
8% Convertible promissory notes:
Conversion option	$	-	$	-	$	4,790,000	$	4,790,000
Warrants		-		-		2,310,000		2,310,000
Derivative liabilities - Current		-		-		7,100,000		7,100,000
Placement agent warrants - Non-current		-		-		216,016		216,016
Derivative liabilities - Total	$	-	$	-	$	7,316,016	$	7,316,016

	As of December 31, 2012
							Derivative
							Liabilities at
	Level 1		Level 2		Level 3		Fair Value
8% Convertible promissory notes:
Conversion option	$	-	$	-	$	610,000	$	610,000
Warrants		-		-		220,000		220,000
Derivative liabilities - Current		-		-		830,000		830,000
Placement agent warrants - Non-current		-		-		81,716		81,716
Derivative liabilities - Total	$	-	$	-	$	911,716	$	911,716

Reconciliation of Derivative Liability Used in Determining Fair Value

The following table is a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three months ended March 31, 2013 and 2012:

	For the Three Months Ended March 31, 2013
							Credited to
							Common
	Balance -		Fair Value of				Stock		Balance -
	January 1,		Derivative		Change in		Upon Issuance		March 31,
	2013		Liability		Fair Value		of Warrants		2013
8% Convertible promissory notes:
Conversion option	$	610,000	$	545,425	$	3,634,575	$	-	$	4,790,000
Warrants		220,000		249,151		1,840,849		-		2,310,000
Derivative liabilities - Current		830,000		794,576		5,475,424		-		7,100,000
Placement agent warrants - Non-current		81,716		-		134,300		-		216,016
Derivative liabilities - Total	$	911,716	$	794,576	$	5,609,724	$	-	$	7,316,016

	For the Three Months Ended March 31, 2012
								Credited to
								Common
	Balance -		Fair Value of					Stock			Balance -
	January 1,		Derivative		Change in			Upon Issuance			March 31,
	2012		Liability		Fair Value			of Warrants			2012
12% Convertible revolving credit agreement:
Conversion option	$	113,271	$	-	$	13,800		$	-		$	127,071
10% convertible preferred stock:
Warrants		1,875,463		-		-			(1,875,463	)		-
10% convertible debentures:
Warrants		70,343		-		(10,805	)		(38,093	)		21,445
Derivative liabilities - Current		2,059,077		-		2,995			(1,913,556	)		148,516
Placement agent warrants - Non-current		487,555		-		(242,558	)		-			244,997
Derivative liabilities - Total	$	2,546,632	$	-	$	(239,563	)	$	(1,913,556	)	$	393,513