Annual report pursuant to section 13 and 15(d)

NOTE 15 - FAIR VALUE MEASUREMENTS

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NOTE 15 - FAIR VALUE MEASUREMENTS
12 Months Ended
Dec. 31, 2011
Fair Value Disclosures [Text Block]
NOTE 15 – FAIR VALUE MEASUREMENTS

The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, capital leases and various short-term borrowings.

The following table provides a summary of the changes in fair value of the Company’s level 3 financial liabilities from December 31, 2010 through December 31, 2011 as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to the liability held at December 31, 2011:

Fair value, December 31, 2010
 
$
(1,177,845
)
Total gains or losses included in earnings:
       
Net change in unrealized gain (loss), net
   
415,856
 
New issuances
   
(104,821)
 
Debt extinguishment
   
767,279
 
Meller promissory note
   
99,531
 
     
-
 
Fair value, December 31, 2011
 
$
-
 

Gains and losses from the change in derivative liabilities are included in other income (expense) on the statement of operations.