Common Stock Warrants

9 Months Ended

Sep. 30, 2012

Common Stock Warrants [Abstract]

COMMON STOCK WARRANTS

NOTE G — COMMON STOCK WARRANTS

Albitar Warrant

On January 9, 2012 Dr. Maher Albitar was granted performance incentive warrants to purchase 200,000 shares of the Company’s common stock (the “Albitar Warrants”) at an exercise price per share of $1.43, which was the closing price per share on the last trading day prior to his start date. These warrants are being treated as non-employee consultant warrants and as such are being revalued, with assumptions for meeting performance, at the end of every reporting period using a trinomial lattice model. The Albitar Warrants have a five year term and vest in accordance with the performance criteria as follows:

(i) 80,000 will vest upon the commercial launch of the Company’s gene-based plasma prostate cancer test licensed from Health Discovery Corp (“HDC”) or similar test based on our mutual agreement.

(ii) 40,000 will vest upon the commercial launch of the Company’s gene-based colon cancer test licensed from HDC or similar test based on our mutual agreement.

(iii) 40,000 will vest upon the commercial launch of the Company’s gene-based pancreatic cancer test licensed from HDC or similar test based on our mutual agreement.

(iv) 20,000 will vest upon successful consummation of a sublicensing agreement with an instrument manufacturer to commercialize the cytogenetics automated image analysis technology licenses from HDC.

(v) 20,000 will vest upon successful consummation of a sublicensing agreement with an instrument manufacturer to commercialize the flow cytometry automated image analysis technology licenses from HDC.

In the event of a change of control of the Company in which the consideration payable to common stockholders of the Company has a deemed value of at least $4.00 per share, any unvested portion of the Albitar Warrants will immediately vest in full.

On September 30, 2012 the Albitar Warrants were valued at $342,500 and we recorded approximately $95,800 and $128,000 of stock compensation expense related to the Albitar Warrants for the three and nine months ended September 30, 2012.

Warrant exercises

For the nine months ended September 30, 2012, 650,000 warrants previously issued to members of our board of directors and 348,417 warrants issued in June 2007 as part of a common stock offering were exercised or expired as follows:

Type of Exercise	Warrant Shares		Exercise Price /Share		Cash Received		Common Stock Shares Issued
For cash		175,000	$	1.50	$	262,500		175,000
Cashless net exercise		725,000	$	1.50	$	—		75,066
Expired unexercised		98,417	$	1.50	$	—		—

Warrant activity for the nine months ended September 30, 2012 is summarized as follows:

	Shares			Weighted Average Exercise Price
Warrants outstanding, December 31, 2011		2,156,750		$	1.34
Granted		200,000			1.43
Exercised		(900,000	)		1.50
Expired		(98,417	)		1.50
Cancelled		—			—
Warrants outstanding, September 30, 2012		1,358,333		$	1.24