F. FAIR VALUE OF FINANCIAL
value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal
or most advantageous market in an orderly transaction between market participants on the measurement date. A fair value hierarchy
requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs
required by the standard that the Company uses to measure fair value:
1: Quoted prices in active markets for identical assets or liabilities
2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices
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 related assets or liabilities.
3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities.
financial instruments as of August 31, 2012 consisted of $261,831, of Notes Payable, $121,495 of Convertible Notes payable (net
of discount), $8,000 due to TheraCyte, Inc, $4,349 of Employee Receivables and $39,140 due from an affiliate. The fair value of
all of the Companys financial instruments as of September 30, 2012 were valued according to the Level 3 input. The carrying
amount of the financial instruments is equal to the fair value as determined by the Company.
The Company has determined that there are no
Level 1 or Level 2 inputs for determining the fair value of the Companys financial instruments. Fair value was determined
by the Company utilizing its own assumptions and estimation. There were no transfers between levels for the period presented.