Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity

Stockholders' Equity

(9)   Stockholders' Equity

(a)   Preferred Stock

The Company is authorized to issue 5,000,000 shares of $0.01 par value preferred stock with such designations, rights and preferences as may be determined by the Board of Directors. There were no Preferred Shares issued and outstanding at December 31, 2011 and 2010.

(b)   Common Stock

The Company's stockholders approved an amendment to the Company's corporate Charter at the Annual Shareholder Meeting held in Philadelphia, PA that concluded on December 8, 2011. This amendment increased the Company's authorized shares from 200,000,000 to 350,000,000 with specific limitations and restrictions on the usage of those newly authorized shares.

As of December 31, 2011 and 2010, 135,642,303 shares and 135,241,609, shares were outstanding, respectively.

(c)   Equity Financings

On May 8, 2009, the Company entered into a Letter Agreement with Rodman & Renshaw, LLC ("Rodman") as placement agent, relating to a proposed offering of our securities. The proceeds from the May 10 and 18, 2009 equity transactions are net of all related offering costs, including the fair value of warrants issued.

On May 10, 2009, the Company entered into Securities Purchase Agreements with two institutional investors. Pursuant to the Securities Purchase Agreements, the Company issued to these investors in the aggregate: (a) 13,636,363 shares of our common stock; (b) Series I warrants to purchase an additional 6,136,363 shares of common stock at an exercise price of $1.65 per share ("Series I Warrants"); and (c) Series II warrants to purchase up to 3,000,000 shares of common stock at an exercise price of $1.10 per share ("Series II Warrants", and together with the Series I Warrants, the "Warrants"). The Series I Warrants could be exercised at any time on or after the six month anniversary of the May 18, 2009 closing date of the offering and for a five year period thereafter. The Series II Warrants could be exercised at any time on or after the May 18, 2009 date of delivery of the Series II Warrants and for a period of 45 days thereafter. The outstanding warrants include a cash settlement feature if certain conditions are met. As of December 31, 2011, all Series II Warrants have been exercised and none of the Series I Warrants have been exercised.

Rodman, as placement agent for the May 10, 2009 Securities Purchase Agreements, received Series I Warrants to purchase 750,000 shares of our common stock equal at an exercise price of $1.38 per share. The Series I Warrants can be exercised at any time on or after the six month anniversary of the May 18, 2009 closing date of the offering and for a five year period thereafter. The outstanding warrants include a cash settlement feature if certain conditions are met. Rodman also was entitled to a fee equal to 5.5% of the Series II Warrants that were exercised. In 2009, Rodman received $165,000 in fees with regard to the exercise of the Series II Warrants. As of December 31, 2011, none of the Series I Warrants have been exercised.

On May 18, 2009, the Company entered into Securities Purchase Agreements with two institutional investors. Pursuant to the Securities Purchase Agreements, the Company issued to these investors in the aggregate: (a) 11,906,976 shares of common stock; and (b) warrants to purchase an additional 4,167,440 shares of common stock at an exercise price $1.31 per share ("Warrants"). The Warrants could be exercised at any time on or after their May 21, 2009 date of issuance and for a five year period thereafter. The outstanding warrants include a cash settlement feature if certain conditions are met. As of December 31, 2011, 1,895,000 of these Warrants had been exercised.

Rodman, as placement agent for the May 18, 2009 Securities Purchase Agreements received a placement fee equal to $797,500 as well as Warrants to purchase 654,884 shares of common stock at an exercise price of $1.34375 per share. The Warrants could be exercised at any time on or after the six month anniversary of the May 21, 2009 closing date of the offering and for a five year period thereafter. The outstanding warrants include a cash settlement feature if certain conditions are met. As of December 31, 2011, none of the Warrants have been exercised.

Pursuant to their May 28, 2010 Equity Distribution Agreement (the "Agreement") with Maxim Group LLC ("Maxim"), they established an At-The-Market ("ATM") Equity Program pursuant to which the Company may sell up to 32,000,000 shares of their Common Stock from time to time through Maxim as their sales agent (the "Agent"). Under the Agreement, the Agent is entitled to a commission at a fixed commission rate of 4.0% of the gross sales price per Share sold, up to aggregate gross proceeds of $10,000,000, and, thereafter, at a fixed commission rate of 3.0% of the gross sales price per Share sold. The Company has no obligation to sell any shares under this program, and may at any time terminate the Agreement. During the twelve months ended December 31, 2011, the Company sold no shares through this program and received no net cash proceeds. All sales related to the ATM took place in 2010. As of December 31, 2011, the Company had sold an aggregate of 520,000 shares through the ATM that resulted in net cash proceeds of approximately $293,000 and commissions paid to Maxim of approximately $12,000.

The proceeds from this financing have been used to fund infrastructure growth including manufacturing, regulatory compliance and market development.

(d)   Common Stock Options and Warrants

(i)   Stock Options

The 1990 Stock Option Plan provides for the grant of options to purchase up to 460,798 shares of the Company's Common Stock to employees, Directors, and Officers of the Company and to consultants, advisors, and other persons whose contributions are important to the success of the Company. The recipients of options granted under the 1990 Stock Option Plan, the number of shares to be converted by each option, and the exercise price, vesting terms, if any, duration and other terms of each option shall be determined by the Company's Board of Directors or, if delegated by the Board, its Compensation Committee. No option is exercisable more than 10 years and one month from the date as of which an option agreement is executed. These shares become vested through various periods not to exceed four years from the date of grant. The option price represents the fair market value of each underlying share of Common Stock at the date of grant, based upon the public trading price. This plan is no longer in effect and no further options will be issued from this plan.

Information regarding the options approved by the Board of Directors under the 1990 Stock Option Plan is summarized below:

	2009							2010							2011
	Shares			Option Price		Weighted Average Exercise Price		Shares			Option Price		Weighted Average Exercise Price		Shares			Option Price		Weighted Average Exercise Price
Outstanding, beginning  of year		345,728		$	2.71-4.03	$	3.01		335,728		$	2.71-4.03	$	2.98		262,000		$	2.75-4.03	$	3.05
Granted		0			0		0		0			0		0		0			0		0
Canceled		(10,000	)	$	4.03	$	4.03		(73,728	)	$	2.71		0					0		0
Exercised		0			0		0		0			0		0		0			0		0
Outstanding, end of year		335,728		$	2.71-4.03	$	2.98		262,000		$	2.75-4.03	$	3.05		262,000		$	2.75-4.03	$	3.05
Exercisable		335,728		$	2.71-4.03	$	2.98		262,000		$	2.75-4.03	$	3.05		262,000		$	2.75-4.03	$	3.05
Weighted  average remaining contractual life (years)		3.86 yrs.							2.86 yrs.							1.86 yrs.
Exercised in current and prior years		(27,215	)						(27,215	)						(27,215	)
Available for future grants		0							0							0

In December 1992, the Board of Directors approved the 1992 Stock Option Plan (the 1992 Stock Option Plan) which provides for the grant of options to purchase up to 92,160 shares of the Company's Common Stock to employees, Directors, and Officers of the Company and to consultants, advisors, and other persons whose contributions are important to the success of the Company. The recipients of the options granted under the 1992 Stock Option Plan, the number of shares to be covered by each option, and the exercise price, vesting terms, if any, duration and other terms of each option shall be determined by the Company's Board of Directors. No option is exercisable more than 10 years and one month from the date as of which an option agreement is executed. To date, no options have been granted under the 1992 Stock Option Plan.

The Company's 1993 Employee Stock Purchase Plan (the 1993 Purchase Plan) was approved by the Board of Directors in July 1993. The outline of the 1993 Purchase Plan provides for the issuance, subject to adjustment for capital changes, of an aggregate of 138,240 shares of Common Stock to employees.

The 1993 Purchase Plan is administered by the Compensation Committee of the Board of Directors. Under the 1993 Purchase Plan, Company employees are eligible to participate in semi-annual plan offerings in which payroll deductions may be used to purchase shares of Common Stock. The purchase price for such shares is equal to the lower of 85% of the fair market value of such shares on the date of grant or 85% of the fair market value of such shares on the date such right is exercised. There have been no offerings under the 1993 Purchase Plan to date and no shares of Common Stock have been issued thereunder.

The Equity Plan effective May 1, 2004, authorizes the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and other stock awards. A maximum of 8,000,000 shares of common stock is reserved for potential issuance pursuant to awards under the Equity Incentive Plan. Unless sooner terminated, the Equity Incentive Plan will continue in effect for a period of 10 years from its effective date.

The Equity Plan is administered by the Board of Directors. The Equity Incentive Plan provides for awards to be made to such Officers, other key employees, non-employee directors, consultants and advisors of the Company and its subsidiaries as the Board may select.

Stock options awarded under the Equity Plan may be exercisable at such times (not later than 10 years after the date of grant) and at such exercise prices (not less than fair market value at the date of grant) as the Board may determine. The Board may provide for options to become immediately exercisable upon a "change in control", which is defined in the Equity Incentive Plan to occur upon any of the following events: (a) the acquisition by any person or group, as beneficial owner, of 20% or more of the outstanding shares or the voting power of the outstanding securities of the Company; (b) either a majority of the directors of the Company at the annual Stockholders Meeting has been nominated other than by or at the direction of the incumbent Directors of the Board, or the incumbent Directors cease to constitute a majority of the Company's Board; (c) the Company's stockholders approve a merger or other business combination pursuant to which the outstanding common stock of the Company no longer represents more than 50% of the combined entity after the transaction; (d) the Company's shareholders approve a plan of complete liquidation or an agreement for the sale or disposition of all or substantially all of the Company's assets; or (e) any other event or circumstance determined by the Company's Board to affect control of the Company and designated by resolution of the Board as a change in control.

Information regarding the options approved by the Board of Directors under the Equity Plan is summarized below:

	December 31, 2009							December 31, 2010							December 31, 2011
	Shares			Option Price		Weighted Average Exercise Price		Shares			Option Price		Weighted Average Exercise Price		Shares		Option Price		Weighted Average Exercise Price
Outstanding beginning at year		7,226,090		$	0.68-6.00	$	2.59		6,650,934		$	1.30-6.00	$	2.66		6,640,934	$	1.30-6.00	$	2.66
Granted		0			0		0		0			0		0		0		0		0
Canceled		(281,325	)	$	0.68– 2.20	$	1.86		(10,000	)		2.46		0		0		0		0
Exercised		(293,831	)	$	0.68-2.20	$	1.56		0			0		0		0		0		0
Outstanding end of year		6,650,934		$	1.30-6.00	$	2.66		6,640,934		$	1.30-6.00	$	2.66		6,640,934	$	1.30-6.00	$	2.66
Exercisable		6,604,267		$	1.30-6.00	$	2.66		6,594,267		$	1.30-6.00	$	2.66		6,625,934	$	1.30-6.00	$	2.66
Weighted  average remaining contractual life (years)		6-7 yrs.							5-6 yrs.							4-5 yrs.
Available for future grants		5.575							10,019							10,019

On June 20, 2007, the Stockholders approved the 2007 Equity Incentive Plan at our Annual Shareholder Meeting. This plan, effective June 1, 2007, authorizes the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and other awards. A maximum of 9,000,000 shares of common stock is reserved for potential issuance pursuant to awards under this plan. Unless sooner terminated, this plan will continue in effect for a period of 10 years from its effective date. As of year-end, option awards under this plan were:

	December 31, 2009						December 31, 2010						December 31, 2011
	Shares		Option Price		Weighted Average Exercise Price		Shares		Option Price		Weighted Average Exercise Price		Shares		Option Price		Weighted Average Exercise Price
Outstanding beginning at year		1,450,000	$	2.20	$	2.20		1,530,000	$	0.72-3.05	$	2.19		1,550,000	$	0.72-3.05	$	2.17
Granted		80,000	$	0.72-3.05	$	1.96		20,000	$	0.89	$	0.89		0		0		0
Canceled		0		0		0		0		0		0		0		0		0
Exercised		0		0		0		0		0		0		0		0		0
Outstanding end of year		1,530,000	$	0.72-3.05	$	2.19		1,550,000	$	0.72 –3.05	$	2.17		1,550,000	$	0.72 –3.05	$	2.17
Exercisable		1,530,000	$	0.72-3.05	$	2.19		1,550,000	$	0.72-3.05	$	2.17		1,550,000	$	0.72-3.05	$	2.17
Remaining contractual life		8.1 years						7.81 years						6.81 years
Available for future grants		107,225						19,626						19,626

On June 24, 2009, the Stockholders approved the 2009 Equity Incentive Plan at our Annual Shareholder Meeting. This plan, effective September 15, 2009, authorizes the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and other awards. A maximum of 15,000,000 shares of common stock is reserved for potential issuance pursuant to awards under this plan. Unless sooner terminated, this plan will continue in effect for a period of 10 years from its effective date. As of year-end, option awards under this plan were:

	December 31, 2009						December 31, 2010						December 31, 2011
	Shares		Option Price		Weighted Average Exercise Price		Shares		Option Price		Weighted Average Exercise Price		Shares		Option Price		Weighted Average Exercise Price
Outstanding beginning at year		0		0	$	0		281,250	$	1.42-2.81	$	2.16		1,879,978	$	0.52-2.81	$	.92
Granted		281,250	$	1.42-2.81	$	2.16		1,598,758	$	0.52-2.71	$	0.70		1,310,000	$	0.21-0.55	$	0.38
Canceled		0		0		0		0		0		0		0		0		0
Exercised		0		0		0		0		0		0		0		0		0
Outstanding end of year		281,250	$	1.42-2.81	$	2.16		1,879,978	$	0.52–2.81	$	.92		3,189,978	$	0.21 –2.81	$	0.70
Exercisable at end of year		281,250	$	1.42-2.81	$	2.16		1,879,978	$	0.52-2.81	$	.92		2,856,645	$	0.21-2.81	$	1.57
Remaining contractual life		9.5 years						8.1 years						6.81 years
Available for future grants		13,642,525						11,618,085						9,765,847

(ii) Stock Warrants

Information regarding warrants outstanding and exercisable into shares of common stock is summarized below:

	December 31, 2009							December 31, 2010							December 31, 2011
	Shares			Option Price		Weighted Average Exercise Price		Shares			Option Price		Weighted Average Exercise Price		Shares			Option Price		Weighted Average Exercise Price
Outstanding beginning at year		5,266,187		$	0.35-4.25	$	3.13		11,008,246		$	0.51-3.60	$	1.44		10,983,246		$	0.51-3.60	$        1.61
Granted		15,821,080		$	0.51-1.65	$	1.44		0			0		0		0			0	0
Canceled		(3,347,777	)	$	2.08-4.25	$	3.37		(25,000	)	$	2.50	$	2.50		(5,000	)	$	3.60	$        3.60
Exercised		(6,753,244	)	$	0.35-3.33	$	1.56		0			0		0		0			0	0
Outstanding end of year		11,008,246		$	0.51-3.60	$	1.44		10,983.246		$	0.51 –3.60	$	1.61		10,978.246		$	0.51 –1.65	$        1.55
Exercisable		11,008,246		$	0.51-3.60	$	1.44		10,983,246		$	0.51-3.60	$	1.61		10,978,246		$	0.51-1.65	$        1.55
Weighted average remaining contractual life		4.5 years							3.9 years							2.9 years
Years exercisable		2010-2019							2011-2019							2012-2019

Certain of the stock warrants outstanding are subject to adjustments for stock splits and dividends.

Net proceeds received from the exercise of stock warrants were $6,139,000 for 2009. No warrants were exercised during 2010 or 2011.

(e) Rights Offering

On November 19, 2002, the Board of Directors of the Company declared a dividend distribution of one Right for each outstanding share of Common Stock to stockholders of record at the close of business on November 29, 2002 (the "Record Date"). Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share (a "Unit") of Series A Junior Participating Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") at a Purchase Price of $30.00 per Unit, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and Continental Stock Transfer & Trust Company, as Rights Agent.

Initially, the Rights are attached to all Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a Distribution Date will occur upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 15% or more (or 20% or more for William A. Carter, M.D.) of the outstanding shares of Common Stock (the "Stock Acquisition Date"), other than as a result of repurchases of stock by the Company or certain inadvertent actions by institutional or certain other stockholders or (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a triggering event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.