Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 10 — STOCKHOLDERS’ EQUITY

STOCK ISSUANCES

On January 25, 2011 the Company issued 320,000 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 216,500 restricted shares at $3.70 (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 nine month period ended September 30, 2011 includes a charge of $801,050 for this compensation.

During April 2011, the Company issued 290,070 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 nine month period ended September 30, 2011, based upon the closing price of the shares on the commitment date.

On June 20, 2011, the Company issued 776,980 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 50,833 shares of its common stock to vendors for services. The shares are restricted for a period of six months. The Company reduced the vendor payables by $76,250 based upon the closing price of the shares on the commitment date.

During the nine month period ended September 30, 2011 the Company issued 4,029,373 shares of its common stock as loan repayments which reduced the balance on the convertible notes by $6,412,957.

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 September 30, 2011:

			Outstanding								Outstanding		Exercisable
			at								at		at
			December 31,								September 30,		September 30,
Warrants	Price		2010		Issued		Exercised		Canceled		2011		2011
Class B	$	110.00		264,803		—		—		—		264,803		264,803
Class E	$	16.30		150,000		—		—		—		150,000		150,000
Class F	$	0.50		58,500		—		—		—		58,500		58,500
Class H	$	13.00		1,725,000		—		—		—		1,725,000		1,725,000
Class J	$	5.40		162,333		—		—		—		162,333		162,333
Class K	$	5.40		115,741		—		—		—		115,741		115,741

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.

In August 2011, the Company amended certain provisions of its April 2011 convertible note financing and as a result the Class F Warrants listed above were repriced from $10.25 to $0.50. The Company recorded a charge in its statement of operations for the three months ended September 30, 2011 of $17,333 associated with the modification.

STOCK OPTIONS

During the nine month period ended September 30, 2011, the Company issued 317,570 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 $1.50 to $2.70.

Stock option activity for the nine month period ended September 30, 2011 is as follows:

				Weighted		Weighted
				Average		Average
				Exercise		Remaining
	Stock			Price per		Life
	Options			Share		(Years)
Outstanding and exercisable at December 31, 2010		364,380		$	16.40		8.8
Granted		282,802			2.70
Granted		21,868			2.20
Granted		12,900			1.50
Forfeited		(2,400	)		6.10
Outstanding and exercisable at September 30, 2011		679,550		$	10.00		8.2