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Note 2 - Liquidity
6 Months Ended
Jun. 30, 2011
Liquidity Disclosure [Policy Text Block]
2.        Liquidity

The Company’s principal sources of liquidity are cash and cash equivalents of approximately $3,387,000 at June 30, 2011, the $2,500,000 available on the $3,000,000 credit facility detailed below and cash from operations. The Company sustained a net loss of $1,980,000 for the six months ended June 30, 2011, and had working capital of $5,231,000 at June 30, 2011.

The Company’s business operations have been primarily funded over the past two years through private placements of our capital stock.  As described more fully in Notes 8, 10 and 11, we raised an aggregate of $7,213,000 through private placements of equity with accredited investors in 2010 and $5,304,000 in 2009 principally from private equity investors.  In 2010, we also entered into a $3,000,000 line of credit agreement.  The Company may require additional funding and this funding will depend, in part, on the timing and structure of potential business arrangements. If necessary, the Company may continue to seek to raise additional capital through the sale of its equity.  It may be accomplished via a strategic alliance with a third party. There may also be additional acquisition and growth opportunities that may require external financing.  There can be no assurance that such financing will be available on terms acceptable to the Company, or at all.  We also have the ability to defer certain product development and other programs, if necessary.  We believe that our existing capital resources including the remaining $2,500,000 availability under the recently completed line of credit and private placements detailed below will be sufficient to support our current business plan beyond August 2012.

On December 21, 2010, we entered into a Credit Agreement with Amzak Capital Management, LLC (the “Lender”) pursuant to which the Lender has agreed to extend a $3,000,000 credit facility to the Company.  As of June 30, 2011 the outstanding balance on the line of credit was $500,000.  To secure payment of the amounts financed under the Credit Agreement, the Company has granted to the Lender a security interest in and against, generally, all of its tangible and intangible assets, except intellectual property, pursuant to that certain Pledge and Security Agreement with the Lender dated December 21, 2010. In addition, the Company has pledged to the Lender its equity interests in IGEN, Inc., one of the Company’s wholly-owned subsidiaries.

On December 8, 2010, we completed the sale of 5,909,087 shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”), to several accredited investors, as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) at a price of $1.10 per share, or an aggregate of approximately $6,500,000.  The Company paid placement agent fees of $650,000 and issued warrants to purchase 354,546 shares of Common Stock at $1.21 per share. The Common Stock and the Warrants were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and Rule 506 promulgated thereunder.

On March 29, 2010, the Company completed a $1,550,000 private placement with certain investors, including investment funds affiliated with Signet Healthcare Partners, G.P. and Jane E. Hager (the “Series C Offering”). As part of the Series C Offering, the Company issued 1,550 shares of Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock has a par value of $0.01 per share and the holders are entitled to quarterly dividends at an annual rate of 5%, when and if declared by the Board of Directors. Furthermore, each share of Series C Convertible Preferred Stock is convertible into shares of common stock equal to (i) 1,000 plus any accrued and unpaid dividends, divided by (ii) $0.69 (the closing price of the Company’s common stock on the date of issuance of the Series C Convertible Preferred Stock).