FAIR VALUES OF ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2011

FAIR VALUES OF ASSETS AND LIABILITIES [Abstract]

FAIR VALUES OF ASSETS AND LIABILITIES

(7) FAIR VALUES OF ASSETS AND LIABILITIES

The Company groups its financial assets and liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value, as follows:

Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2: Valuation is based on 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 for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments.

Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts.

The Company uses valuation methods such as the Black-Scholes option pricing model, and assumptions in estimating fair value for the warrants considered to be derivative instruments including, among other factors, the fair value of the underlying stock, risk-free interest rate, volatility, expected life and dividend rates.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	June 30, 2011								December 31, 2010
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Liabilities:
Derivative warrant liability	$	-	$	2,526,177	$	-	$	2,526,177	$	-	$	1,544,996	$	-	$	1,544,996

The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. During the three and six months ended June 30, 2011 and 2010 there were no such other adjustments.