FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

5. FAIR VALUES OF FINANCIAL INSTRUMENTS

FASB Accounting Standards Codification (ASC) Section 820, Fair Value Measurements and Disclosures, establishes a three tier level hierarchy for fair value measurements which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions that market participants would use in pricing an asset or liability.

The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
December 31, 2011
Bonds- corporate issuances	$	10,400,905	$	10,400,905	$	–	$	–
Equity securities		–		–		–		–
Short-term investments available for sale, December 31, 2011	$	10,400,905	$	10,400,905	$	–	$	–
December 31, 2010
Bonds- corporate issuances	$	301,632	$	301,632	$	-	$	-
Equity securities		93,924		-		-		93,924
Short-term investments available for sale, December 31, 2010	$	395,556	$	301,632	$	-	$	93,924
Liabilities:
Common stock warrants, December 31, 2011	$	166,398	$	-	$	-	$	166,398
Common stock warrants, December 31, 2010	$	248,131	$	-	$	-	$	248,131

The following is a summary the changes in the common stock equity securities and warrant liability for the years ended December 31, 2011 and 2010:

	Equity Securities			Warrant Liability
Beginning balance, January 1, 2010	$	167,302		$	821,891
Unrealized gain included in other comprehensive (loss) income		(73,378	)		–
Realized gain included in net loss		–			(573,760	)
Ending balance, December 31, 2010		93,924			248,131
Unrealized gain (loss) included in other comprehensive (loss) income		(93,924	)		–
Realized gain included in net loss		–			(81,733	)
Ending balance, December 31, 2011	$	–		$	166,398

The following table shows the Company's investment securities gross unrealized losses and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011 and 2010.  The Company has reviewed individual securities to determine whether a decline in fair value below the amortizable cost basis is other then temporary.

	December 31, 2011
	Less than 12 months					12 months or Longer					Total
Description of Securities	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses
Available for Sale
Bonds	$	10,400,905	$	(168,327	)	$	–	$	–		$	10,400,905	$	(168,327	)
Equity securities		–		(93,924	)		–		(14,449	)		–		(108,373	)
	$	10,400,905	$	(262,251	)	$	–	$	(14,449	)	$	10,400,905	$	(276,700	)

	December 31, 2010
	Less than 12 months					12 months or Longer				Total
	Fair Value		Gross Unrealized Holding Losses			Fair Value		Gross Unrealized Holding Losses		Fair Value		Gross Unrealized Holding Losses
Available for Sale
Bonds	$	301,632	$	–		$	–	$	–	$	301,632	$	–
Equity securities		93,924		(14,449	)		–		–		93,924		(14,449	)
	$	395,556	$	(14,449	)	$	–	$	–	$	395,556	$	(14,449	)