Notes Payable

9 Months Ended

Sep. 30, 2011

Notes Payable [Abstract]

Notes Payable

NOTE 2 – NOTES PAYABLE

Notes Payable consists of the following (amounts in thousands):

	September 30, 2011
10% convertible promissory note due May 2012 (1)	$	50
7% and 10% convertible promissory notes due March 2012 (2)		150
24% convertible promissory note issued with detachable warrants and no specified maturity date (3)		—
24% convertible promissory note issued with detachable warrants and no specified maturity date (4)		2,000
10% senior promissory notes due April 2012, interest payable semiannually each April and October (5)		21
Zero coupon convertible promissory note due November 2011 (6)		230
24% promissory note due January 2012 (7)		100
Total Notes Payable before discount		2,551
Less: Unamortized discount on notes payable		(103	)
Total Notes Payable	$	2,448

(1) This note was renewed in May 2011. As consideration for the renewal of the note now due in May 2012, detachable warrants to purchase 25,000 shares of our common stock at $0.25 per share were issued. The warrants were vested upon issuance and have a three-year term.

(2) Represents two one-year convertible promissory notes: $100,000 to one individual and $50,000 to one entity. In April 2011, the $100,000 note was renewed, effective March 2011, for an additional one year term at an annual interest rate of 10%. In conjunction with this renewal, we issued a three-year warrant for the purchase of 25,000 additional shares of our common stock at an exercise price of $0.25. Also in April 2011, the $50,000 note was renewed, effective in March 2011, for an additional one year term at an annual interest rate of 7%.

(3) This convertible promissory note for $100,000 was repaid in April 2011.

(4) As of September 30, 2011, interest of approximately $656,000 was due and not yet paid on this promissory note, which was not repaid on its maturity date of June 4, 2011. During the fourth quarter of 2011, we intend to negotiate a resolution to this note.

(5) Represents senior promissory notes issued in June 2011 to two holders of certain of our subordinated debentures.

(6) At this note's most recent maturity date in August 2011, it was replaced by a new note of similar terms with a face value of $230,000 and a maturity date of November 10, 2011. The note was renewed at the same terms until February 29, 2011 at the November 10, 2011 maturity date.

(7) In April 2011, we issued to a shareholder a $100,000 promissory note bearing interest at 24% per annum. At the loan's maturity date in June it was renewed to October 2011. The note was again renewed at the October maturity date until January 1, 2012