(6) Derivative Financial Instruments

9 Months Ended

Dec. 31, 2012

Derivatives and Fair Value [Text Block]

(6) Derivative Financial Instruments

The Company’s derivative financial instruments consist of CEDs that were bifurcated from our Series D Preferred Stock and Secured Notes. The Preferred CED comprises the embedded conversion option and certain other equity-indexed features that were not clearly and closely related to the Series D Preferred Stock in terms of risks. The Secured Note CED comprised certain put features that were not clearly and closely related to the Secured Notes in terms of risks. Derivative financial instruments are carried at fair value. The following table reflects the components of the CEDs and changes in fair value, using the techniques and assumptions described in Note 3:

	Warrant Derivative			Put Derivative			Total
Balances at April 1, 2012	$	3,005,319		$	—		$	3,005,319
Fair value adjustments		53,192			—			53,192
Balances at December 31, 2012	$	3,058,511		$	—		$	3,058,511
Balances at April 1, 2011	$	2, 837,143		$	5,272		$	2,842,415
Fair value adjustments		(1,012,675	)		(5,272	)		(1,017,947	)
Balances at December 31, 2011	$	1,824,468		$	—		$	1,824,468

Fair value adjustments are recorded in other income in the accompanying financial statements. As a result, the Company’s earnings are and will be affected by changes in the assumptions underlying the valuation of the derivative financial instruments. The principal assumptions that have, in the Company’s view, the most significant effects are the Company’s trading market prices, volatilities and risk-adjusted market credit rates.