EQUITY AND SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2012

EQUITY AND SHARE-BASED COMPENSATION [Abstract]

Summary of stock option and warrant activity

A summary of stock option and warrant activity for 2012 and 2011 follows.

	Options							Equity and Liability Warrants
	Shares Under Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding, January 1, 2011		45,485,111		$	0.30		6.8		40,429,578		$	1.27		2.3
Granted		5,204,224			0.22				5,158,916			0.23
Impact of anti-dilution clauses		-		NA					6,303,255		NA
Exercised		-		NA					-		NA
Forfeited, expired or cancelled		(12,100,614	)		0.36				(5,102,385	)		0.74
Outstanding, December 31, 2011		38,588,721			0.27		6.3		46,789,364			1.04		1.7
Granted		5,812,148			0.15				84,756,427			0.10
Impact of anti-dilution clauses		-		NA					103,744,062		NA
Impact of amendment		-		NA					15,642,859		NA
Exercised		-		NA					(5,003,038	)		0.10
Forfeited, expired or cancelled		(10,549,974	)		0.34				(84,575,897	)		0.43
Outstanding, December 31, 2012		33,850,895		$	0.16		6.3		161,353,777		$	0.12		3.5
Exercisable, December 31, 2012		28,704,256		$	0.17		5.9		142,793,777		$	0.13		3.3

Stock granted under 2010 Equity Incentive Plan

Our board of directors adopted our 2010 Equity Incentive Plan (2010 Plan) in February 2010.  A total of 25,000,000 shares of common stock were initially reserved for issuance under the 2010 Plan.  The amount reserved increases annually each January 1st by 5% of the outstanding shares as of the prior December 31st.  Additionally, in 2011 the board approved an 8,000,000 increase in the number of shares of common stock reserved under the plan.  Under the terms of the 2010 Plan, we may grant options to purchase common stock and shares of common stock to officers, directors, employees or consultants providing services on such terms as are determined by the board of directors.  Our board of directors administers the 2010 Plan, determines vesting schedules on plan awards and may accelerate the vesting schedules for award recipients.  The options granted under the 2010 Plan have terms of up to 10 years.

	December 31, 2012
Initially reserved		25,000,000
Additionally reserved - annual increases		19,831,186
Additionally reserved - board action		8,000,000
Options granted since inception, net of forfeited, expired or cancelled		(22,977,927	)
Stock granted since inception		(12,056,309	)
Available for issuance under the 2010 Plan		17,796,950

Share-based compensation expenses included in selling, general and administrative expenses

Share-based compensation expenses related to options are included in selling, general and administrative expenses in the statements of operations, and consisted of the following (in thousands):

	2012		2011
Consultants	$	42	$	14
Directors		285		280
Employees		152		112
Executive officers		444		501
Total share-based compensation expense - options	$	923	$	907

Summary of option activity

The following table summarizes option activity during 2012 and 2011:

	Employees and Directors					Consultants
	Weighted					Weighted
	Average		Shares			Average		Shares			Total
	Exercise		Under			Exercise		Under			Number of
	Price		Options			Price		Options			Options
Outstanding,  January 1, 2011	$	0.41		43,761,576		$	1.46		1,723,535			45,485,111
Granted		0.21		4,404,224			0.31		800,000			5,204,224
Forfeited, expired or cancelled		0.34		(12,067,079	)		10.00		(33,535	)		(12,100,614	)
Exercised	NA			-		NA			-			-
Outstanding, December 31, 2011		0.24		36,098,721			0.76		2,490,000			38,588,721
Granted		0.13		5,612,148			0.08		200,000			5,812,148
Forfeited, expired or cancelled		0.29		(10,049,974	)		1.33		(500,000	)		(10,549,974	)
Exercised	NA			-		NA			-			-
Outstanding, December 31, 2012	$	0.13		31,660,895		$	0.53		2,190,000			33,850,895
Exercisable, December 31, 2012	$	0.14		26,830,930		$	0.56		1,873,326			28,704,256
Exercisable, December 31, 2011	$	0.26		25,914,194		$	0.95		1,773,330			27,687,524

The following are the weighted-average assumptions used in valuing stock options:

Weighted-average assumptions used in valuing stock options

The following are the weighted-average assumptions used in valuing stock options:

	2012			2011
Fair value of options granted	$	0.10		$	0.19
Volatility		109.2	%		101.5	%
Risk free interest rate		0.9	%		0.8	%
Expected life of options (in years)		6.1			5.2
Expected dividends		-			-
Forfeiture rate		5	%		5	%

Summary of information related to outstanding and exercisable options

The following table summarizes information related to outstanding and exercisable options:

	As of December 31, 2012
	Outstanding						Exercisable
Range of Exercise Prices	Shares Under Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
$0.08		22,042,441	$	0.08		7.0		17,212,476	$	0.08		6.7
$0.14		708,075		0.14		9.2		708,075		0.14		9.2
$0.20		6,812,879		0.20		5.6		6,812,879		0.20		5.6
$0.30		3,000,000		0.30		2.0		3,000,000		0.30		2.0
$0.37		687,500		0.37		8.2		370,826		0.37		8.2
$1.21		100,000		1.21		3.0		100,000		1.21		3.0
$1.50		500,000		1.50		0.4		500,000		1.50		0.4
$0.08 to $1.5		33,850,895		0.16		6.3		28,704,256		0.17		5.9

Summary of warrant activity

We have outstanding warrants classified as equity (equity warrants) and as warrant liability (liability warrants).

	Equity Warrants							Liability Warrants
	Shares Under Equity Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Liability Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Balance, January 1, 2011		545,454		$	0.69		2.8		39,884,124		$	1.28		2.3
Granted		5,158,916			0.23				-
Impact of antidilution clauses		-							6,303,255
Exercised		-							-
Forfeited, expired or cancelled		(2,230,000	)		0.23				(2,872,385	)		1.13
Balance, December 31, 2011		3,474,370			0.30		3.5		43,314,994			1.10		1.5
Granted		-			-				84,756,427			0.10
Impact of antidilution clauses		-			-				103,744,062		NA
Impact of amendment		-			-				15,642,859		NA
Exercised		-			-				(5,003,038	)		0.10
Forfeited, expired or cancelled		(2,323,186	)		0.22				(82,252,711	)		0.44
Outstanding, December 31, 2012		1,151,184		$	0.45		2.4		160,202,593		$	0.12	$	3.5
Exercisable, December 31, 2012		1,151,184		$	0.45		2.4		141,642,593		$	0.12	$	3.3

Summary of information related to outstanding and exercisable warrants

The following table summarizes information related to outstanding and exercisable warrants:

		As of December 31, 2012
		Outstanding						Exercisable
Range of Exercise Prices	Type of Warrant	Shares Under Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Warrants		Exercise Price		Remaining Contractual Life (Years)
$0.07-$0.08	Liability		131,397,900	$	0.08		4.2		112,837,900	$	0.08		4.1
$0.23	Equity		605,730		0.23		3.9		605,730		0.23		3.9
$0.33	Liability		28,804,693		0.33		0.3		28,804,693		0.33		0.3
$0.69	Equity		545,454		0.69		0.8		545,454		0.69		0.8
			161,353,777	$	0.12		3.5		142,793,777	$	0.13		3.3