Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 10 — STOCKHOLDERS’ EQUITY

STOCK ISSUANCES

     On January 25, 2011 the Company issued 3,200,000 shares of its common stock to a consultant satisfying a $1,344,000 accrual for services rendered in connection with the settlement of certain Woodbridge obligations.

     On February 23, 2011, the Company issued 2,165,000 restricted shares at $0.37 (the closing price as of the date of issuance) to certain employees under the Amended and Restated 2006 Stock Option Plan. The statement of operations and comprehensive loss for the six month period ended June 30, 2011 includes a charge of $801,050 for this compensation.

     During April 2011, the Company issued 2,900,699 shares of its common stock as compensation under its stock option plan. These shares were issued to employees and directors and are restricted for a period of two years from issuance. The Company recorded compensation expense of $756,775 in its statement of operations and comprehensive loss for the six month period ended June 30, 2011, based upon the closing price of the shares on the commitment date.

     On June 20, 2011, the Company issued 7,769,798 shares of its common stock in exchange for the return of 4,219 shares of its preferred stock.

     On June 10, 2011, the Company issued 508,333 shares of its common stock to vendors for services. The shares are restricted for a period of six months. The Company recorded an administrative expense of $76,250 based upon the closing price of the shares on the commitment date.

     During the six month period ended June 30, 2011 the Company issued 25,445,559 shares of its common stock as loan repayments which reduced the balance on the convertible notes by $6,451,972.

WARRANTS

     In addition to the warrants classified as derivatives, the Company has also recognized certain warrants as equity instruments.

     The following table sets forth the outstanding warrants classified as equity instruments as of June 30, 2011:

			Outstanding at								Outstanding at		Exercisable at
Warrants	Price		December 31, 2010		Issued		Exercised		Canceled		June 30, 2011		June 30, 2011
Class B	$	11.00		2,648,029		—		—		—		2,648,029		2,648,029
Class E	$	1.63		1,500,000		—		—		—		1,500,000		1,500,000
Class F	$	1.25		585,000		—		—		—		585,000		585,000
Class H	$	1.30		17,250,000		—		—		—		17,250,000		17,250,000
Class J	$	0.54		1,623,333		—		—		—		1,623,333		1,623,333
Class K	$	0.54		1,157,407		—		—		—		1,157,407		1,157,407

     In the event all outstanding warrants are exercised, including those classified as derivatives and those classified as equity, the Company has adequate shares authorized to meet these obligations.

STOCK OPTIONS

     During the six month period ended June 30, 2011, the Company issued 3,175,699 stock options to employees and directors under its stock option plan. The Company calculated a compensation expense associated with the issuance of these options of $699,444 using the Black-Scholes pricing model. The Company assumed a five year term, risk free interest rate of 1.9%, average volatility of 113.6% and exercise prices of $0.15 to $0.27.

     Stock option activity for the six month period ended June 30, 2011 is as follows:

				Weighted
				Average Exercise		Weighted Average
	Stock			Price per		Remaining
	Options			Share		Life (Years)
Outstanding and exercisable at December 31, 2010		3,643,795		$	1.64		8.8
Granted		2,829,029			.27
Granted		218,679			.22
Granted		129,000			.15
Forfeited		(24,000	)		.61
Outstanding and exercisable at June 30, 2011		6,795,494		$	1.00		8.2