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Subsequent Events
6 Months Ended
Jun. 30, 2011
Subsequent Events [Abstract]  
Subsequent Events
Note 11—Subsequent Events
Subsequent to June 30, 2011, 3,577 preferred shares were converted into 7,154,000 common shares and 734,564 warrants were exercised through August 9, 2011. Cash received for the warrants subsequent to June 30, 2011 was $367,282.
The Company announced on August 2, 2011, that it entered into a definitive Securities Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to sell to the purchasers an aggregate of 41,245,822 shares of Company common stock at a purchase price of $0.55 per share in a private placement. Each purchaser will also receive a warrant to purchase 0.35 shares of common stock for every share of common stock acquired in the offering with an exercise price of $0.75 per share and a term of 5 years from issuance. The warrants are callable by the Company if the common stock trades over $1.75 for 20 consecutive trading days at any time after the shares underlying the warrants are registered or eligible for resale pursuant to Rule 144. The aggregate purchase price paid by the purchasers at closing for the common stock and the warrants was $22.7 million. The closing is expected to occur in the near future.
Pursuant to a Registration Rights Agreement between the Company and the purchasers, the Company is required to file a resale registration statement within 30 days that covers the resale of the shares of common stock and the shares of common stock issuable upon the exercise of the warrants.
Since the Company consummated a single offering of at least $10 million, certain note holders are entitled to a mandatory redemption of the outstanding principal plus any interest payable in cash within three business days of the consummation. Approximately 31% of the original note of $6.0 million has a mandatory redemption requiring that approximately $2.5 million including interest will have to be paid within three business days of consummation of the offering. The remaining note holders signed amendments to their notes raising the mandatory redemption for a single offering from $10 million to $30 million.