Note 8 - Commitments and Contingencies

6 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Text Block]

(8)       Commitments and contingencies

Government Contracts and Research Grants

Revenue for services performed pursuant to government contracts is recognized when earned, typically when the underlying services or activities are rendered. Invoices are generally submitted monthly. The accuracy and appropriateness of costs charged to government contracts are subject to regulation, audit and possible disallowance by government agencies. Accordingly, costs billed or billable to government customers are subject to potential adjustment upon audit by such agencies.

Grant funding is initially recognized as deferred income and then recorded as revenue to match the costs that they are intended to compensate for. Revenue recognized in relation to these grants was $0.6 million and $0.8 million for the three and six month periods ended December 31, 2012, and $0.1 million and $0.3 million for the three and six month periods ended December 31, 2011, respectively.

Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or executive agencies could materially adversely affect the Company’s financial condition or results of operations if such changes negatively impacted our contract with BARDA. Furthermore, contracts with the U.S. government may be terminated or suspended by the U.S. government at any time, with or without cause. Such contract suspensions or terminations could result in expenses or charges not being reimbursed, or otherwise adversely affect the Company’s financial condition and/or results of operations.