Note 9 - Stock Warrants

3 Months Ended

Mar. 31, 2012

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

9. Stock Warrants

Stock Warrants activity for the quarters ended March 31, 2012 and 2011 consisted of:

	2012				2011
	Warrants		Weighted Average Exercise Price		Warrants			Weighted Average Exercise Price
Beginning balance		1,235,877	$	0.35		1,498,377		$	0.36
Stock warrants granted		-		-		-			-
Stock warrants expired		-		-		-			-
Stock warrants exercised		-		-		(262,500	)		0.41
Ending balance		1,235,877	$	0.35		1,235,877		$	0.35

In connection with the private placement of the Company’s Common Stock as more fully described in Note 11, the Company granted Common Stock Warrants to purchase 338,182 and 16,364, respectively, to each of its two placement agents for $1.21 per share which expire on December 8, 2015.

In connection with the Credit Agreement with the Lender as more fully described in Note 8, the Company issued a ten-year warrant to purchase 881,331 shares of the Company’s Common Stock for $.01 per share.

In connection with the private placement offering to certain investment funds affiliated with Signet Healthcare Partners, G.P. (the “Offering”) on March 13, 2009, the Company granted its placement agent for the Offering a Common Stock Warrant to purchase 350,000 shares of common stock for $0.41 per share, which expires on March 13, 2012.  Until stockholder approval of the Offering was obtained, this Common Stock Warrant was exercisable for no more than 88,550 shares.  At the Company’s 2009 annual meeting of stockholders held on May 15, 2009, the Company’s stockholders approved the Offering and accordingly, all shares under the warrant became issuable.  The fair value of the Common Stock Warrant of approximately $102,000 was determined using the Black Scholes model.  The factors used in the calculation are as follows:  expected volatility of 66.8%, expected term of 3 years and risk-free interest rate of 1.36%.   Expected volatility and risk-free interest rates are based upon the expected life of the warrant.  The interest rates used are the yield of a 3-year U.S. Treasury Note as of March 13, 2009.  Of this amount, $82,000 was deemed to be attributable to the issuance of debt and was capitalized as debt issuance costs.  On December 2, 2009, the Common Stock Warrant was amended to include a partial transfer for 87,500 shares of common stock.  On December 2, 2009, the warrant to purchase 87,500 was exercised using the “Cashless Exercise” provision and 51,681 shares of common stock were issued.  On February 25, 2011, the warrant to purchase the remaining 262,500 shares of common stock was exercised using the “Cashless Exercise” provision and 200,646 shares of common stock were issued.