NOTE L – Fair Value

The Company has categorized its assets and liabilities recorded at fair value based upon the fair value hierarchy specified by GAAP. All assets and liabilities are recorded at historical cost which approximates fair value, and therefore, no items were valued according to these inputs.

The levels of fair value hierarchy are as follows:

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Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access;

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Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals; and

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Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category. All assets and liabilities are at cost which approximates fair value and there are not items that were required to be valued on a non-recurring basis.

The following liabilities were valued at fair value as of December 31, 2014 and 2013. No other items were valued at fair value on a recurring or non-recurring basis as of December 31, 2014 and 2013.


December 31, 2014		Fair Value Measurements Using
	Carrying
	Value	Level 1	Level 2	Level 3		Total
Derivative Liabilities	$ ––	$ ––	$ ––	$	168,248	$	168,248

Total		$ ––	$ ––	$	168,248	$	168,248

December 31, 2013		Fair Value Measurements Using
	Carrying
	Value	Level 1	Level 2	Level 3		Total
Derivative Liabilities	$ ––	$ ––	$ ––	$	189,871	$	189,871

Total		$ ––	$ ––	$	189,871	$	189,871