14. Subsequent events

On July 27, 2011, the Company undertook a $20.4 million underwritten public offering, which closed on August 1, 2011. In the offering, the Company sold and issued 39.2 million shares of common stock at a price of $0.51 per share and warrants at a price of $0.01 per warrant to purchase up to approximately 45.1 million shares of common stock at an exercise price of $0.64 per share. Net of underwriting discounts, legal, accounting and other offering expenses, the Company received proceeds of approximately $19.0 million (without giving effect to any proceeds that may in the future be received by the Company upon the underwriters' exercise of their option to purchase up to an additional 5,880,000 shares of common stock to cover over-allotments). Immediately after the sale, the Company had approximately 149.1 million shares of common stock outstanding, without giving effect to the possible exercise of the warrants sold in the offering or any of our other outstanding warrants or stock options.

On July 8, 2011, the Company effected an increase in the authorized shares of common stock to from 175,000,000 to 250,000,000 shares and an increase in the designated number of shares of Series A Preferred Stock associated with the Company's rights plan from 15,000 to 25,000 shares.

The following selected pro forma balance sheet data is derived from our balance sheet as of June 30, 2011 and gives retroactive effect to the completion of the underwritten offering and the increase in our authorized shares, but does not give effect to other events that occurred since June 30, 2011 and thus may not be indicative of our current financial condition. The information should be read in conjunction with our balance sheet as of June 30, 2011 and related notes.

	Actual as of June 30, 2011			Adjustments Related to July 2011 Financing		Pro Forma as of June 30, 2011
	(Unaudited)			(Unaudited)		(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	7,023,176		$	19,000,000	$	26,023,176
Short-term investments		19,076,620			-		19,076,620
Prepaid and other current assets		2,395,834			-		2,395,834
Total current assets		28,495,630			19,000,000		47,495,630
Non-current assets		693,382			-		693,382
Total assets	$	29,189,012		$	19,000,000	$	48,189,012

LIABILITIES AND STOCKHOLDERS' EQUITY

Total current liabilities	$	6,823,342		$	13,720,000	$	20,543,342


Commitments and contingencies
Stockholders' equity:
Preferred Stock, $0.01 par value, 5,000,000 shares authorized, including 25,000 shares of Series A Junior Participating Preferred Stock; no shares issued and outstanding		-			-		-
Common stock, $0.001 par value, 250,000,000 shares authorized; 149,057,885 shares issued at June 30, 2011		109,858			39,200		149,058
Additional paid-in-capital		230,066,850			5,240,800		235,307,650
Accumulated comprehensive income, net of tax		379,260			-		379,260
Treasury stock, at cost (633,816 shares)		(2,279,238	)		-		(2,279,238	)
Accumulated deficit		(205,911,059	)		-		(205,911,059	)
Total stockholders' equity		22,365,670			5,280,000		27,645,670
Total liabilities and stockholders' equity	$	29,189,012		$	19,000,000	$	48,189,012