Marketable Securities

6 Months Ended

Mar. 31, 2013

Marketable Securities

Marketable Securities

Note D — Marketable Securities

As of March 31, 2013, the Company had $6.5 million invested in high quality, investment grade U.S. treasury bills. At September 30, 2012, the Company’s marketable securities included $6.8 million invested in high quality, investment grade debt securities, consisting of $6.3 million invested in U.S. treasury bills and $0.5 million invested in CDs. The Company is reporting an unrealized gain of $550 related to the treasury bills investment as of March 31, 2013; the unrealized gain was $1,821 at September 30, 2012.

Marketable securities are classified as available for sale and are carried at fair value, with unrealized gains or losses included as a separate component of shareholders’ equity. The cost and fair value of available-for-sale securities were as follows:

	Cost		Unrealized Gain		Fair Value
March 31, 2013	$	6,499,350	$	550	$	6,499,900
September 30, 2012	$	6,777,874	$	1,821	$	6,779,695

Gains and losses recognized are recorded in Other income (expense), in the consolidated statements of operations.  Gains and losses from the sale of investments are calculated based on the specific identification method.

The Company applies the accounting standards set forth in Accounting Standards Codification (ASC) 820, Fair Value Measurement, for financial assets and liabilities that are re-measured and reported at fair value at each reporting period. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that fair value measurements be classified and disclosed using one of the following three categories:

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets 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; or

Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.

Following is a summary of the valuation techniques for assets and liabilities recorded in the consolidated condensed balance sheets at fair value on a recurring basis:

CD’s: CD investments are classified using Level 1 inputs, and fair values are determined by reference to similar financial instruments for which quoted market prices are available on the active market.

U.S. treasury bills: U.S. treasury bills are classified using Level 1 inputs, and fair values are determined by reference to quoted market prices for U.S. treasury bills on the active market.