8. Warrants and Warrant Liabilities

6 Months Ended

Jun. 30, 2011

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

8. Warrants and Warrant Liabilities

In connection with its various financings through December 2008, the Company issued warrants to purchase shares of common stock in conjunction with the sale of its convertible debentures. The Company issued such warrants in December 2006, February 2007, August 2007, March 2008, August 2008 and December 2008. In May 2009, the Company restructured the terms of the then-outstanding debentures and all of the Company’s then-outstanding warrants issued in connections with the Debentures pursuant to the terms of the Amendment Agreement. In connection with the Recapitalization, the Company repurchased all of its then-outstanding debentures and cancelled substantially all of its then-outstanding warrants. See Note 7 – Convertible Debentures.

Under the terms of the Amendment Agreement, the holders of the then-outstanding warrants were granted the right to exchange their outstanding warrants for shares of the Company’s common stock at the rate of 1.063 shares of common stock, subject to adjustment for stock splits and dividends. In exchange, the price-based anti-dilution protection under the warrants was eliminated. Previously the exercise price of the warrants would decrease, and the number of shares issuable upon exercise would increase, generally, each time the Company issued common stock or common stock equivalents at a price less than the exercise price of the warrants. The Amendment Agreement eliminated the potential for future price-based dilution from the warrants, and accordingly, the warrants are no longer a derivative liability and their value as of May 8, 2009, was reclassed to equity.

On July 2, 2010, in connection with the Recapitalization, the Company eliminated all of the warrants is issued in connection with debentures and none of those warrants are outstanding as of December 31, 2010. See Note 7 – Convertible Debentures.

There were 36,661 shares subject to warrants at a weighted average exercise price of $22.5 at June 30, 2011and December 31, 2010.

The following table summarizes information about warrants outstanding at June 30, 2011:

Exercise Prices		Number of Shares Subject to Outstanding Warrants and Exercisable	Weighted Average Remaining Contractual Life (years)
$	2.90	31,152	4.01
$	93.75	1,400	1.92
$	129.75	2,667	1.74
$	144.00	1,042	1.74
$	300.00	400	1.63
		36,661

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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