Warrants

9 Months Ended

Sep. 29, 2012

Interim Financial Statements

Note 7. Warrants [Text Block]

During the nine months ended September 29, 2012, 750,000 warrants with an exercise price of $0.21 per share were exercised and the Company received proceeds of $157,500 from exercise of these warrants. These warrants were issued during the year ended January 1, 2011 pursuant to a subscription agreement entered into by the holders of such warrants and the Company on April 22, 2010.

In addition, during the nine months ended September 29, 2012, a part of the warrants issued to Aegis Capital Corp. and its designees, warrants with an exercise price of $0.85 per share were exercised and the Company issued 4,103 shares of common stock. The warrant holder elected a cashless exercise pursuant to the provisions of the warrants and received 4,103 shares of common stock in lieu of 15,000 shares and a cash payment of $0.85 per share. These warrants were issued during the nine months ended September 29, 2012 as part of Aegis Capital Corp.’s services as a placement agent in conjunction with the registered direct offering concluded during the nine months ended September 29, 2012.

The Company also awarded warrants to purchase 250,000 shares of the Company’s common stock to a certain non-employee during the nine months ended September 29, 2012. The exercise price of these warrants was $0.75 per share and the term for these warrants was 2 years.

At September 29, 2012, the following warrants were outstanding and exercisable:

Warrants granted in connection with :	Weighted Average Exercise Prices		Number Outstanding And Exercisable At September 29, 2012		Weighted Average Remaining Contractual Life
2008 Private placement equity offering	$	3.00		1,718,350		6.6 months
2010 Private placement equity offering	$	0.21		7,803,564		7.7 months
2012 Placement agent commission	$	0.85		285,000		22.1 months
2012 Non-employee award	$	0.75		250,000		22.3 months
	$	0.72		10,056,914		8.3 months