Note 11 - Warrants

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note Disclosure [Text Block]

11. WARRANTS

Warrants Issued to Investors

The warrants issued in the March 30, 2011 offering are considered financial liabilities due primarily to their anti-dilution protection provisions that allow for the automatic reset of the exercise price upon any future sale of common stock instruments at or below the current exercise price of the warrants. As such, the warrants are required to be adjusted to fair value each reporting period and the change in fair value of the warrant liabilities is classified in other (expense)/income in the statement of operations. The warrants are classified as short-term warrant liabilities in the balance sheet.

The fair value of the warrants was determined using the Black-Scholes-Merton option-pricing model and the following weighted average assumptions were used:

	December 31, 2011
Stock Price	$	0.66
Exercise Price	$	2.56
Expected Volatility		105%
Expected Dividend Yield	None
Expected Term (in years)		4.8
Risk-free Interest Rate		0.77%

As of December 31, 2011, the value of the warrant liability was $0.7 million and the change in fair value during the twelve months ended December 31, 2011 was a gain of $1.3 million.  The gain was recorded as other income in the statement of operations.

The completion of the Share Subscription Agreement with Canon on July 22, 2011 resulted in a change in control.  As such, the company was obligated to holders of May 2009 warrants who requested redemption a total of $530,000.

Warrant activity for the years ended December 31, 2011, 2010 and 2009 is summarized as follows:

In thousands of dollars

	2011							2010						2009
	Warrants			Weighted Average Exercise Price		Aggregate Intrinsic Value		Warrants		Weighted Average Exercise Price		Aggregate Intrinsic Value		Warrants			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at beginning of year		1,757,115		$	4.60	$	-		1,757,115	$	4.60	$	-		170,371		$	16.60	$	-
Issued		1,800,000			2.49				-		-				1,649,245			4.00
Expired		(107,871	)		13.99				-		-				(62,500	)		21.06
Warrant redemption		(972,590	)		3.28				-		-				-			-
Exercised		-			-				-		-				-			-
Outstanding at end of year		2,476,654		$	2.49		-		1,757,115	$	4.60		-		1,757,115		$	4.60		-
Currently exercisable		2,476,654		$	2.49		-		1,757,115	$	4.60		-		1,757,115		$	4.60		-

The following table summarizes information about warrants outstanding at December 31, 2011:

		Warrants Outstanding and Exercisable
Range of Exercise Prices			Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	1.00 to 2.30			676,654		4.4	$	2.30
$	2.31 to 4.00			1,800,000		4.8		2.56
				2,476,654		4.7	$	2.49

The warrants expire on various dates ranging to May 2016.