Fair value of financial instruments

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

22. Fair value of financial instruments:

At December 31, 2011 and 2012, the carrying values of financial instruments such as cash and cash equivalents, trade receivables and payables, other receivables and accrued liabilities and the current portion of long-term debt approximated their market values, based on the short-term maturities of these instruments.

As noted in Note 8, the company calculates fair value for its marketable securities based on quoted market prices for identical assets and liabilities which represents Level 1 of ASC 820-10 fair value hierarchy.

At December 31, 2011 and 2012 the fair value of long-term debt and long term receivables was comparable with their carrying values.

The following table presents information about the Company securities based on quoted market prices for identical assets and liabilities for 2012 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

(in thousands)			Fair Value Measured and Recorded Using						Operational		Financial Gain
	Net Carrying Value as of December 31, 2012		Level 1		Level 2		Level 3		Gain (losses) recognized in earnings		(losses) recognized in earnings			Total
Assets
Cash and cash equivalent		2,742		2,742		-		-		-		-			-
Marketable securities		6,413		6,413		-		-		-		-			-
Liabilities
Acquisition liability contingent consideration (a)		24,063		-		-		24,063		14,009		(4,834	)		9,175
Acquisition liability note (b)		5,713		-		-		5,713		794		(880	)		(86	)
Acquisition liability warrant consideration (c)		2,157		-		-		2,157		9,070		838			9,908

The fair value of the financial instruments in connection with the acquisition of Éclat (see note 2 Business Combinations) are estimated as follows:

(a) Acquisition liability deferred consideration: the fair value is estimated using a discounted cash flow model based on probability adjusted projected annual gross profit of each of the products which formed the project portfolio at the time of acquisition of Éclat Pharmaceuticals (Note 16 Long Term Debt).

The fair value of the deferred consideration will change over time in accordance with the changes in market conditions and thus business plan projections as the relate to market size, market share, product pricing, competitive landscape, gross profit margins expected for each of the products.

(b) Acquisition liability Note: the Company uses a probability-weighted discounted cash flow model (see note 16 Long Term Debt).

(c) Acquisition liability warrant consideration: the Company uses a Black-Scholes option pricing model. The fair value of the warrant consideration will change over time depending on the volatility and share price at balance sheet date (see note 16 Long Term Debt).