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FINANCIAL INSTRUMENTS
6 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 3 - FINANCIAL INSTRUMENTS

Investments in Equity Securities

 

The fair values of the Company's marketable securities are based on quoted market prices and are included in the accompanying condensed consolidated balance sheet under total current assets as available-for sale securities. The Company relied on guidance by the Financial Accounting Standards Board Accounting Standards Codification (ASC) ASC 320-10-25-1 regarding a classification of securities.

 

As of March 31, 2015, the Company's available-for-sale securities consisted of 10,000,000 shares of Arrayit (OTCBB: ARYC) acquired in August 2014 in exchange for the issuance of 10,000,000 common shares of the Company. These shares were exchanged pursuant to a share exchange agreement with Arrayit in August 2014. The Company has determined that its investment is not classified as either trading securities or held to maturity. Furthermore, due to the current liquidity profile of Arrayit shares as traded on the OTC Markets, the Company believes that it can liquidate such securities at any time; therefore these securities are classified as available-for-sale securities. These securities are recorded at fair market value with changes in value classified in the financial statements as unrealized gain/loss in other comprehensive income.

 

The Arrayit shares were quoted at $0.20 per share on the date of issuance and at $0.09 as of March 31, 2015. The Company recorded a $700,000 loss to other comprehensive income for the six months ended March 31, 2015. As of March 31, 2015, the total other comprehensive loss recorded for the Arrayit stock was $1,100,000. As of March 31, 2015, Arrayit is also a majority stockholder of the Company. See Note 5. As of the date of this report, the value of such shares has declined significantly to a de minimis value.