Quarterly report pursuant to sections 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
9 Months Ended
Mar. 31, 2013
FAIR VALUE MEASUREMENTS [Abstract]  
FAIR VALUE MEASUREMENTS
NOTE 5  – FAIR VALUE MEASUREMENTS
 
The Company adopted FASB ASC 820, Fair Value Measurements and Disclosures, for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. FASB ASC 820 defines fair value 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.  FASB ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
 
FASB ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. FASB ASC 820 establishes and prioritizes three levels of inputs that may be used to measure fair value:
 
Level 1 - Quoted prices in active markets for identical assets or liabilities.
 
Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
Level 3 - Inputs that are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.
 
The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2013:
 
                 
   
Carrying Value
   
Level 1
 
Level 2
Level 3
                 
Financial Assets
               
Cash equivalents (1)
  $ 176,914       176,914      
Total financial assets
  $ 176,914       176,914      
                     
   
Carrying Value
   
Level 1
 
Level 2
Level 3
Financial Liabilities
                   
Convertible notes payable (2)
  $ 7,732,226            
7,325,279
Total financial liabilities
  $ 7,732,226            
7,325,279