Note 8 - Note Payable - Victory Park	6 Months Ended
Jun. 30, 2012
Short-term Debt [Text Block]	NOTE H - NOTE PAYABLE – VICTORY PARK On September 30, 2008, we entered into a financing agreement with Victory Park pursuant to which we borrowed $15,000,000 from Victory Park and, in connection therewith, we issued to Victory Park a three-year senior secured non-convertible term note. In March 2010, we entered into an amended and restated financing agreement with Victory Park. The restated financing agreement amends and restates in its entirety and replaces the financing agreement dated as of September 30, 2008. Under the terms of the restated financing agreement, we issued to Victory Park $33,000,000 aggregate principal amount of three-year, senior secured convertible notes in exchange for the three-year, senior secured non-convertible notes previously issued pursuant to the original financing agreement, in the aggregate principal amount of approximately $19,358,000, and additional net proceeds of approximately $13,642,000 (before debt issuance costs). These convertible notes were purchased at a 2% discount to the face amount. We received net cash proceeds of approximately $11,635,000. The balance of deferred financing costs ($400,000 at June 30, 2012) and note discount ($3,440,000 at June 30, 2012) are being amortized over the three-year term of the new convertible notes to interest expense in accordance with the effective interest rate method. The maturity date of the convertible notes has been extended to March 17, 2013 from September 30, 2011 under the original notes. The convertible notes accrue interest at a rate per annum equal to the greater of the prime rate plus 5% and 15%, which, in the absence of an event of default, shall be capitalized and added to the outstanding principal balance of the convertible notes on each anniversary of the date of issuance other than the maturity date. As a result, $5,797,859 and $5,018,750 in accrued interest was reclassified from accrued interest to notes payable in 2012 and 2011, respectively. Under the terms of the restated financing agreement, we are required to make certain mandatory prepayments to Victory Park. For example, for asset sales, we are required to pay to Victory Park 50% of the net proceeds that we receive; 50% of the net proceeds that we receive from a sale of equity (with certain carve-outs); 100% of the net proceeds that we receive from a debt financing (with certain carve-outs); and 10% of the net proceeds that we receive from certain milestone payments. Victory Park may, in its sole discretion, waive any mandatory prepayments. For the three months ended June 30, 2012 and 2011 we recognized approximately $2,836,000 and $2,265,000, respectively, in cash and non-cash interest expense on these notes. For the six months ended June 30, 2012 and 2011 we recognized approximately $4,813,000 and $4,693,000, respectively, in cash and non-cash interest expense on these notes. The notes are convertible into shares of common stock at the holder’s option. The initial conversion rate, which is subject to adjustment as set forth in the notes, is calculated by dividing the sum of the principal to be converted, plus all accrued and unpaid interest thereon, by $0.70 per share. If we subsequently make certain issuances of common stock or common stock equivalents at an effective purchase price less than the then-applicable conversion price, the conversion price of the notes will be reduced to such lower price. The Victory Park notes are convertible into shares of our common stock and as a result of a reset provision contained in the notes, the conversion feature is considered an embedded derivative that must be marked to fair value each reporting period through the term of the notes. The fair value was determined by utilizing a probability-weighted scenario analysis that incorporates the likelihood of an event that might trigger the reset provision. In order to record the debt at fair value on the date of issuance, the Company recorded a debt discount and corresponding derivative liability of $21,190,000, representing the fair value of the embedded conversion feature on the notes as of such date and recorded the notes at their fair value of $23,810,000 for a total liability of $45,000,000. The $12,000,000 premium over the par value of the $33,000,000 notes is reflected as a reduction in the debt discount, which is being accreted to interest expense based on the effective interest rate method over the remaining term of the notes. The liability for the conversion feature was subsequently marked to market at the end of each quarter. The Company therefore recognized a non-cash expense of $5,430,000 in the three months ended June 30, 2012 and a non-cash gain of $10,670,000 in the three months ended June 30, 2011 and recognized non-cash expense of $2,510,000 and $15,770,000 in the six months ended June 30, 2012 and 2011, respectively, which represents the change in the fair value of the conversion feature of the notes during each period. At June 30, 2012 and December 31, 2011, there was a liability in the accompanying balance sheets representing the fair value of the embedded conversion feature in the amount of $14,980,000 and $12,470,000, respectively. Under the restated financing agreement, we must maintain a cash balance equal to at least $2,500,000 and our cash flow (as defined in the restated financing agreement) must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. The restated financing agreement specifies certain events of default including, without limitation: failure to pay principal or interest; filing for bankruptcy; breach of covenants, representations or warranties; the occurrence of a material adverse effect (as defined in the restated financing agreement); a change in control (as defined in the restated financing agreement); lack of timely filing or effectiveness of a required registration statement; and any material decline or depreciation in the value or market price of the collateral. We are subject to certain cash damages, as set forth in the convertible notes, in the case of a failure to timely convert the notes, and a failure to timely convert is also an event of default, subject to additional remedies. Upon any default, among other remedies, both principal and interest would be accelerated and additional charges would apply. In the event the Company is not now able to achieve management’s projected cash flow forecasts, it may be in violation of its covenants with Victory Park. On May 29, 2012, the Company entered into a letter agreement with Victory Park pursuant to which they agreed to, among other things, waive the financial covenant requirements through September 30, 2012. As a result of our cash balance being less than $2,500,000 as of June 30, 2012, we would have been in default of the minimum cash balance provision had Victory Park not agreed to the waiver. On May 29, 2012, the Company also entered into a letter agreement with Victory Park Management, LLC, as agent ("Agent"). Pursuant to the letter agreement, the Company agreed that if, on or before September 21, 2012 (the "Trigger Date") it has not: (i) entered into a credit facility reasonably acceptable to the Agent pursuant to which the Company has received no less than $28,000,000 in gross cash proceeds; or (ii) sold some or all of its equity investment in Tarsa pursuant to a sale reasonably acceptable to Agent, or pursuant to a dividend from Tarsa, entry into a merger by Tarsa or some other Tarsa-related transaction on terms reasonably acceptable to Agent, obtained proceeds and used such proceeds to pay the Levy Parties in accordance with the Agreement prior to the Trigger Date, then the Agent, the lenders and their affiliates shall have the right, but not the obligation, between the Trigger Date and September 30, 2012, to finance the payment to the Levy Parties. If the Agent or its affiliates exercise the right to make such loan, such loan shall be an obligation under the amended and restated financing agreement, dated as of March 16, 2010, between the Company, the lenders thereto and the Agent. Such loan will be evidenced by additional promissory notes, which notes shall be on the same terms as the loans evidenced by the existing notes issued by the Company to the lenders, except that the additional notes shall be immediately convertible at a conversion price equal to the average closing price of Company's common stock (on the OTCBB) during the sixty trading days prior to the date of the letter agreement. As previously disclosed, the Company is in discussions with Victory Park. However, there can be no assurance that the Company will be able to reach agreement with Victory Park regarding its debt obligations or on any other matter.

Note 8 - Note Payable - Victory Park

6 Months Ended

Jun. 30, 2012

NOTE H - NOTE PAYABLE – VICTORY PARK

On September 30, 2008, we entered into a financing agreement with Victory Park pursuant to which we borrowed $15,000,000 from Victory Park and, in connection therewith, we issued to Victory Park a three-year senior secured non-convertible term note.

In March 2010, we entered into an amended and restated financing agreement with Victory Park. The restated financing agreement amends and restates in its entirety and replaces the financing agreement dated as of September 30, 2008.

Under the terms of the restated financing agreement, we issued to Victory Park $33,000,000 aggregate principal amount of three-year, senior secured convertible notes in exchange for the three-year, senior secured non-convertible notes previously issued pursuant to the original financing agreement, in the aggregate principal amount of approximately $19,358,000, and additional net proceeds of approximately $13,642,000 (before debt issuance costs). These convertible notes were purchased at a 2% discount to the face amount. We received net cash proceeds of approximately $11,635,000. The balance of deferred financing costs ($400,000 at June 30, 2012) and note discount ($3,440,000 at June 30, 2012) are being amortized over the three-year term of the new convertible notes to interest expense in accordance with the effective interest rate method. The maturity date of the convertible notes has been extended to March 17, 2013 from September 30, 2011 under the original notes. The convertible notes accrue interest at a rate per annum equal to the greater of the prime rate plus 5% and 15%, which, in the absence of an event of default, shall be capitalized and added to the outstanding principal balance of the convertible notes on each anniversary of the date of issuance other than the maturity date. As a result, $5,797,859 and $5,018,750 in accrued interest was reclassified from accrued interest to notes payable in 2012 and 2011, respectively.

Under the terms of the restated financing agreement, we are required to make certain mandatory prepayments to Victory Park. For example, for asset sales, we are required to pay to Victory Park 50% of the net proceeds that we receive; 50% of the net proceeds that we receive from a sale of equity (with certain carve-outs); 100% of the net proceeds that we receive from a debt financing (with certain carve-outs); and 10% of the net proceeds that we receive from certain milestone payments. Victory Park may, in its sole discretion, waive any mandatory prepayments.

For the three months ended June 30, 2012 and 2011 we recognized approximately $2,836,000 and $2,265,000, respectively, in cash and non-cash interest expense on these notes. For the six months ended June 30, 2012 and 2011 we recognized approximately $4,813,000 and $4,693,000, respectively, in cash and non-cash interest expense on these notes.

The notes are convertible into shares of common stock at the holder’s option. The initial conversion rate, which is subject to adjustment as set forth in the notes, is calculated by dividing the sum of the principal to be converted, plus all accrued and unpaid interest thereon, by $0.70 per share. If we subsequently make certain issuances of common stock or common stock equivalents at an effective purchase price less than the then-applicable conversion price, the conversion price of the notes will be reduced to such lower price.

The Victory Park notes are convertible into shares of our common stock and as a result of a reset provision contained in the notes, the conversion feature is considered an embedded derivative that must be marked to fair value each reporting period through the term of the notes. The fair value was determined by utilizing a probability-weighted scenario analysis that incorporates the likelihood of an event that might trigger the reset provision. In order to record the debt at fair value on the date of issuance, the Company recorded a debt discount and corresponding derivative liability of $21,190,000, representing the fair value of the embedded conversion feature on the notes as of such date and recorded the notes at their fair value of $23,810,000 for a total liability of $45,000,000. The $12,000,000 premium over the par value of the $33,000,000 notes is reflected as a reduction in the debt discount, which is being accreted to interest expense based on the effective interest rate method over the remaining term of the notes. The liability for the conversion feature was subsequently marked to market at the end of each quarter. The Company therefore recognized a non-cash expense of $5,430,000 in the three months ended June 30, 2012 and a non-cash gain of $10,670,000 in the three months ended June 30, 2011 and recognized non-cash expense of $2,510,000 and $15,770,000 in the six months ended June 30, 2012 and 2011, respectively, which represents the change in the fair value of the conversion feature of the notes during each period. At June 30, 2012 and December 31, 2011, there was a liability in the accompanying balance sheets representing the fair value of the embedded conversion feature in the amount of $14,980,000 and $12,470,000, respectively.

Under the restated financing agreement, we must maintain a cash balance equal to at least $2,500,000 and our cash flow (as defined in the restated financing agreement) must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. The restated financing agreement specifies certain events of default including, without limitation: failure to pay principal or interest; filing for bankruptcy; breach of covenants, representations or warranties; the occurrence of a material adverse effect (as defined in the restated financing agreement); a change in control (as defined in the restated financing agreement); lack of timely filing or effectiveness of a required registration statement; and any material decline or depreciation in the value or market price of the collateral. We are subject to certain cash damages, as set forth in the convertible notes, in the case of a failure to timely convert the notes, and a failure to timely convert is also an event of default, subject to additional remedies. Upon any default, among other remedies, both principal and interest would be accelerated and additional charges would apply. In the event the Company is not now able to achieve management’s projected cash flow forecasts, it may be in violation of its covenants with Victory Park.

On May 29, 2012, the Company entered into a letter agreement with Victory Park pursuant to which they agreed to, among other things, waive the financial covenant requirements through September 30, 2012. As a result of our cash balance being less than $2,500,000 as of June 30, 2012, we would have been in default of the minimum cash balance provision had Victory Park not agreed to the waiver. On May 29, 2012, the Company also entered into a letter agreement with Victory Park Management, LLC, as agent ("Agent"). Pursuant to the letter agreement, the Company agreed that if, on or before September 21, 2012 (the "Trigger Date") it has not: (i) entered into a credit facility reasonably acceptable to the Agent pursuant to which the Company has received no less than $28,000,000 in gross cash proceeds; or (ii) sold some or all of its equity investment in Tarsa pursuant to a sale reasonably acceptable to Agent, or pursuant to a dividend from Tarsa, entry into a merger by Tarsa or some other Tarsa-related transaction on terms reasonably acceptable to Agent, obtained proceeds and used such proceeds to pay the Levy Parties in accordance with the Agreement prior to the Trigger Date, then the Agent, the lenders and their affiliates shall have the right, but not the obligation, between the Trigger Date and September 30, 2012, to finance the payment to the Levy Parties. If the Agent or its affiliates exercise the right to make such loan, such loan shall be an obligation under the amended and restated financing agreement, dated as of March 16, 2010, between the Company, the lenders thereto and the Agent. Such loan will be evidenced by additional promissory notes, which notes shall be on the same terms as the loans evidenced by the existing notes issued by the Company to the lenders, except that the additional notes shall be immediately convertible at a conversion price equal to the average closing price of Company's common stock (on the OTCBB) during the sixty trading days prior to the date of the letter agreement. As previously disclosed, the Company is in discussions with Victory Park. However, there can be no assurance that the Company will be able to reach agreement with Victory Park regarding its debt obligations or on any other matter.

- Definition

The entire disclosure for short-term debt.

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