Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Embedded Conversion Derivative Liabilities Measured and Recorded at Fair Value on Recurring Basis

The following table presents the embedded conversion derivative liability, the Company’s only financial liability measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2014 (in thousands):

	Level 1		Level 2		Level 3		September 30, 2014

Embedded conversion derivative liability	$	-	$	-	$	517	$	517

Reconciliation of Financial Instruments Recognized at Fair Value

The following table reconciles, for the nine months ended September 30, 2014, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements (in thousands):

Balance of embedded conversion derivative liability as of December 31, 2013	$	6,968
Fair value of embedded conversion derivative liabilities at issuance		433
Gain on fair value adjustments to embedded conversion derivative liability		(684	)
Reductions in fair value due to conversion of convertible debentures into common stock		(6,200	)
Balance of embedded conversion derivative liability at September 30, 2014	$	517

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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