Related Party Transactions

9 Months Ended

Sep. 30, 2011

Related Party Transactions: [Abstract]

Related Party Transactions:

5. Related Party Transactions:

On December 30, 2009, the Company entered into an Emezine™ Settlement Agreement (the "Settlement Agreement") with Accentia Biopharmaceuticals, Inc., a related party ("Accentia"), Arius One and Accentia Pharmaceuticals, Inc. f/k/a TEAMM Pharmaceuticals Inc., a subsidiary of Accentia. Pursuant to the Settlement Agreement, the Company has received a warrant to purchase 2 million shares of common stock of Accentia's majority-owned subsidiary, Biovest International, Inc. ("Biovest"), from Accentia. Such warrant has an exercise price equal to 120% of the closing bid price of Biovest's common stock as of the date the bankruptcy court overseeing Accentia's Chapter 11 reorganization entered a final order authorizing Accentia to carry out the Settlement Agreement, which was $0.89 per share. The warrant was recorded at December 31, 2009 with a Black-Scholes value of $0.6 million. However, the warrant was not received by the Company until February 17, 2010 (the "Settlement Date"), the date which the bankruptcy court issued the final order authorizing the Settlement Agreement. At the settlement date, the warrant was valued using the Black-Scholes model, which resulted in a gain on settlement of $0.4 million for the nine months ended September 30, 2010, and is included in related party general and administrative in the accompanying condensed consolidated statement of operations. Subsequent to the Settlement Date and prior to the end of the nine months ended September 30, 2010, the stock price of Biovest's common stock increased, resulting in a derivative gain of $0.8 million and is included in derivative (loss) gain in the accompanying condensed consolidated statement of operations. During the nine months ended September 30, 2011, the stock price of Biovest's common stock declined, resulting in a derivative loss of $0.8 million. This derivative loss partially offsets the overall derivative gain that is in the accompanying condensed consolidated statement of operations.