Short-term Investments

12 Months Ended

Dec. 31, 2011

Short-term Investments [Abstract]

Short-term Investments

2. Short-term Investments

The Company accounts for short-term investments in accordance with Accounting Standards Codification 320, Investments – Debt and Equity Securities (ASC 320). The Company determines the appropriate classification of all short-term investments as held-to-maturity, available-for-sale or trading at the time of purchase or acquisition and re-evaluates such classification as of each balance sheet date.

In 2005 the Company acquired 25,000 shares of FluoroPharma Series A Preferred Stock that were converted into 25,000 shares of common stock in February 2006. FluoroPharma Medical, Inc. was privately held through 2010 so the Company had been accounting for this investment under the cost method and as such, had ascribed no value to these shares in the Consolidated Balance Sheet as of December 31, 2010.

As a result of FluoroPharma Medical, Inc. starting to trade its shares on a public exchange in September 2011, the Company determined that the shares of FluoroPharma Medical, Inc. acquired in September 2011 in exchange for the 25,000 shares of common stock received in February 2006 should be classified as available-for-sale. These shares are reported at fair value in the Consolidated Balance Sheet as of December 31, 2011 and the unrealized loss of $31,367 associated with these shares is included in other comprehensive loss a component of stockholders’ deficit.

In May 2011 FluoroPharma Medical, Inc. stock began trading on the OTC Bulletin Board (“OTCBB”) under the symbol FPMI.OB. In September 2011, the Company was issued 39,209 restricted shares of FluoroPharma Medical, Inc. common stock with a closing price of $1.88 on September 30, 2011. Although the shares were restricted under Rule 144 and had very light trading volume, they were trading on a public exchange and could no longer be accounted for under the cost method. Taking into consideration the shares trading restrictions and light trading volume, the shares were recorded in the Condensed Consolidated Balance Sheet as of September 30, 2011 at a 20% discount or $1.50 per share. The change in method for valuing these shares from the cost method to the fair value method resulted in the recognition of a gain of $58,814. The closing price per share for these shares as of December 30, 2011 was $.70 or an aggregate value of $27,446.