FAIR VALUES OF ASSETS AND LIABILITIES

9 Months Ended

Sep. 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 m arket 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.

        The table below presents the changes in Level 3 derivative warrant liability measured at fair value on a recurring basis.

Liabilities:
Derivative warrant liability as of December 31, 2010	$	1,544,996
Total unrealized losses included in net loss (1)		2,191,146
Total realized losses included in net loss (1)		978,678
Total unrealized gains included in net loss (1)		(891,727	)
Total realized gains included in net loss (1)		(19,418	)
Reclassification of derivative warrant liability to additional paid-in capital for derivative warrants exercised		(2,242,431	)
Derivative warrant liability as of September 30, 2011	$	1,561,244

(1) Included in derivative warrant liability gain or loss in the Consolidated Statement of Operations.