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Note 8 - Fair Value Measurements
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Jan. 31, 2013
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| Fair Value, Measurement Inputs, Disclosure [Text Block] |
8. Fair
Value Measurements
We
follow FASB ASC 820, "Fair Value Measurements and
Disclosures" (“ASC 820”), in connection with
assets and liabilities measured at fair value on a recurring
basis subsequent to initial recognition. The guidance applies
to our derivative liabilities. We had no assets or
liabilities measured at fair value on a non-recurring basis
for any period reported.
ASC
820 requires that assets and liabilities carried at fair
value will be classified and disclosed in one of the
following three categories. We measure the fair value of
applicable financial and non-financial assets based on the
following fair value hierarchy:
Level
1: Quoted market prices in active markets for identical
assets or liabilities.
Level
2: Observable market based inputs or unobservable inputs that
are corroborated by market data.
Level
3: Unobservable inputs that are not corroborated by market
data.
The
hierarchy noted above requires us to minimize the use of
unobservable inputs and to use observable market data, if
available, when determining fair value.
The
fair value of our recorded derivative liabilities is
determined based on unobservable inputs that are not
corroborated by market data, which is a Level 3
classification. We record derivative liabilities on our
balance sheet at fair value with changes in fair value
recorded in our consolidated statements of operations.
The
hierarchy noted above requires the Company to minimize the
use of unobservable inputs and to use observable market data,
if available, when determining fair value. There
were no transfers between Level 1, Level 2 and/or Level 3
during fiscal 2013. Our fair value measurements at the
January 31, 2013 reporting date are classified based on the
valuation technique level noted in the table below (in
thousands):
The
following outlines the significant weighted average
assumptions used to estimate the fair value information
presented, in connection with our outstanding and contingent
warrants issued to Broadwood as described in Note 7 utilizing
the Monte Carlo simulation model:
The
table below sets forth a summary of changes in the fair value
of our Level 3 financial instruments since their inception,
for the six months ended January 31, 2013 (in
thousands):
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