Note 4 - Derivative Financial Instruments

12 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Text Block]

4.  DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to adverse movements in foreign currency exchange rates because it conducts business on a global basis and in some cases in foreign currencies.  The Company’s former operations in France were transacted in the local currency and converted into U.S. Dollars based on published exchange rates for the periods reported and were therefore subject to risk of exchange rate fluctuations.

All derivative instruments are recorded as assets or liabilities, as applicable, on the accompanying consolidated balance sheets at fair value.  Changes in the fair value of derivatives are either recorded in income or other comprehensive income, as appropriate.  The gain or loss on derivatives that have not been designated as hedging instruments is included in current income in the period that changes in fair value occur.

In an attempt to mitigate the risk described above, the Company has entered into, from time to time, foreign exchange contracts to purchase a fixed amount of Euros on a fixed date in the future at a fixed rate determined at the contract date.  These derivative financial instruments do not meet the criteria to qualify as hedges.  Changes in the market value of these contracts result in gains or losses recognized in other loss, net in the period of the change.  The Company held no foreign exchange contracts at any point during the years ended December 31, 2012 and 2011, and thus there was no related gain or loss.  For the year ended December 31, 2010, the Company recognized a loss of $62,000 related to a foreign exchange contract.  At December 31, 2012 and 2011, there were no foreign exchange contracts outstanding.