Fair Value of Financial Instruments:

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Fair Value of Financial Instruments:

3. Fair Value of Financial Instruments:   

Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices that are observable, either directly or indirectly, and reasonably available.

Level 3 – Unobservable inputs which reflect the assumptions that management develops based on available information about the assumptions market participants would use in valuing the asset or liability.

The classification of financial instruments valued at fair value at March 31, 2012 is as follows:

Financial Instruments	Level 1		Total
Cash equivalents	$	19,831,000	$	19,831,000
Securities		264,000		264,000
	$	20,095,000	$	20,095,000

Securities include common stock of $264,000 at March 31, 2012, valued on the last business day of the period at the last available reported sales price on the primary securities exchange (Level 1).

In May 2011, the Financial Accounting Standards Board issued guidance to expand disclosures for Level 3 measurements based on unobservable inputs. The Company adopted this standard in January 2012. The adoption of this standard did not have a material impact on the Company’s disclosures.