XML 41 R13.htm IDEA: XBRL DOCUMENT

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with the fair value hierarchy described in Note 1, the following table shows the fair value of the Company’s financial instruments that are required to be measured at fair value as of September 30, 2013 and June 30, 2013:

September 30, 2013 (unaudited)		Level 1				Level 2				Level 3				Total

Cash equivalents		$	192,669			$	-			$	-			$	192,669
Common stock warrant liability, warrants exercisable at $2.6058 from September 18, 2011 through September 18, 2016		$	-			$	-			$	431,541			$	431,541

June 30, 2013		Level 1				Level 2				Level 3				Total

Cash equivalents		$	192,620			$	-			$	-			$	192,620
Common stock warrant liability, warrants exercisable at $2.6058 from September 18, 2011 through September 18, 2016		$	-			$	-			$	650,638			$	650,638

As of September 30, 2013 and June 30, 2013, the fair values of the Company’s Level 1 financial instruments were $192,669 and $192,620, respectively. These financial instruments consist of cash equivalents, including money market accounts. As of September 30, 2013 and June 30, 2013, the Company held no Level 2 financial instruments.

As of September 30, 2013 and June 30, 2013, the fair values of the Company’s Level 3 financial instruments totaled $431,541 and $650,638, respectively. The Level 3 financial instrument consists of common stock warrants issued by the Company in March 2011, which include features requiring liability treatment of the warrants. The fair value of warrants issued in March 2011 to purchase 3.9 million shares of the Company’s common stock is based on valuations performed by an independent third party valuation firm. The fair value was determined using proprietary valuation models using the quality of the underlying securities of the warrants, restrictions on the warrants and security underlying the warrants, time restrictions and precedent sale transactions completed in the secondary market or in other private transactions.

The following table summarizes the changes in fair value of the Company’s Level 3 financial instruments for the three months ended September 30, 2013 and 2012:

		Three months ended
		September 30,
		2013				2012
		(unaudited)				(unaudited)
Beginning balance		$	(650,638	)		$	(918,566	)
Gain due to change in fair value of warrant liabilities, net			219,097				463,133
Ending balance		$	(431,541	)		$	(455,433	)

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details