Derivative Liabilities (Tables)

6 Months Ended

Jun. 30, 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 six months ended June 30, 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			June 30, 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			2.2 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 June 30, 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 June 30, 2013
							Derivative
							Liabilities at
	Level 1		Level 2		Level 3		Fair Value
8% Convertible promissory notes:
Conversion option	$	-	$	-	$	1,520,000	$	1,520,000
Warrants		-		-		540,000		540,000
Derivative liabilities - Current		-		-		2,060,000		2,060,000
Placement agent warrants - Non-current		-		-		122,357		122,357
Derivative liabilities - Total	$	-	$	-	$	2,182,357	$	2,182,357

	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 tables are a reconciliation of the derivative liabilities for which Level 3 inputs were used in determining fair value during the three and six  months ended June 30, 2013 and 2012:

	For the Three Months Ended June 30, 2013
							Credited to
							Common
	Balance -		Fair Value of				Stock		Balance -
	April 1,		Derivative		Change in		Upon Issuance		June 30,
	2013		Liability		Fair Value		of Warrants		2013
8% Convertible promissory notes:
Conversion option	$	4,790,000	$	-	$	(3,270,000)	$	-	$	1,520,000
Warrants		2,310,000		-		(1,770,000)		-		540,000
Derivative liabilities - Current		7,100,000		-		(5,040,000)		-		2,060,000
Placement agent warrants - Non-current		216,016		-		(93,659)		-		122,357
Derivative liabilities - Total	$	7,316,016	$	-	$	(5,133,659)	$	-	$	2,182,357

  

	For the Three Months Ended June 30, 2012
							Credited to
							Common
	Balance -		Fair Value of				Stock		Balance -
	April 1,		Derivative		Change in		Upon Issuance		June 30,
	2012		Liability		Fair Value		of Warrants		2012
12% Convertible revolving credit agreement:
Conversion option	$	127,071	$	-	$	(127,071)	$	-	$	-
10% convertible debentures:
Warrants		21,445		-		(2,504)		(18,941)		-
Derivative liabilities - Current		148,516		-		(129,575)		(18,941)		-
Placement agent warrants - Non-current		244,997		-		(104,539)		-		140,458
Derivative liabilities - Total	$	393,513	$	-	$	(234,114)	$	(18,941)	$	140,458

	For the Six Months Ended June 30, 2013
							Credited to
			Fair Value of				Common Stock
	Balance -		Derivative		Change in		Upon Issuance		Balance -
	January 1, 2013		Liability		Fair Value		of Warrants		June 30, 2013
8% Convertible promissory notes:
Conversion option	$	610,000	$	545,425	$	364,575	$	-	$	1,520,000
Warrants		220,000		249,151		70,849		-		540,000
Derivative liabilities - Current		830,000		794,576		435,424		-		2,060,000
Placement agent warrants - Non-current		81,716				40,641		-		122,357
Derivative liabilities - Total	$	911,716	$	794,576	$	476,065	$	-	$	2,182,357

	For the Six Months Ended June 30, 2012
							Credited to
			Fair Value of				Common Stock
	Balance -		Derivative		Change in		Upon Issuance		Balance -
	January 1, 2012		Liability		Fair Value		of Warrants		June 30, 2012
8% Convertible promissory notes:
Conversion option	$	-	$	-	$	-	$	-	$	-
Warrants		-		-		-		-		-
12% Convertible revolving credit agreement:
Conversion option		113,271		-		(113,271)		-		-
10% convertible preferred stock:
Warrants		1,875,463		-		-		(1,875,463)		-
10% convertible debentures:
Warrants		70,343		-		(13,309)		(57,034)		-
Derivative liabilities - Current		2,059,077		-		(126,580)		(1,932,497)		-
Placement agent warrants - Non-current		487,555		-		(347,097)		-		140,458
Derivative liabilities - Total	$	2,546,632	$	-	$	(473,677)	$	(1,932,497)	$	140,458