9. WARRANTS

Warrants issued in connection with the Company's December 2007, January 2009, and August 2009 financings are classified as liabilities as opposed to equity due to their settlement terms. These warrants are non-cash liabilities and the Company is not required to expend any cash to settle these liabilities.

The fair value of these warrants was recorded on the balance sheet at issuance and the warrants are marked to market at each financial reporting period, with changes in the fair value recorded as a gain or loss in the statement of operations. The fair value of the warrants is determined using the Black-Scholes option pricing model, which requires the use of significant judgment and estimates for the inputs used in the model. The following reflects the weighted-average assumptions for each of the periods indicated:


	Year Ended December 31,
	2011			2010			2009
Risk-free interest rate		0.1% - 0.4	%		0.6% - 1.0	%		0.2% - 2.7	%
Expected dividend yield		—	%		—	%		—	%
Expected lives		1.0 -2.7 years			2.0 -3.7 years			0.4 - 4.7 years
Expected volatility		71.8% - 75.6	%		84.7% - 90.1	%		86.0% - 102.1	%
Warrants classified as liabilities		28,948,962			29,409,546			30,203,466
Warrants classified as equity		255,895			255,895			2,129,530
Market value of stock at beginning of year	$	2.12		$	1.46		$	0.66
Market value of stock at end of year	$	0.75		$	2.12		$	1.46

The risk-free interest rate is estimated using an average of treasury bill interest rates that correlate to the prevailing interest rates at the time of the valuation date. The expected dividend yield is zero as the Company has not paid any dividends to date and does not expect to pay dividends in the future. The expected lives are based on the remaining contractual lives of the related warrants at the valuation date. The expected volatility is estimated using historical volatility of the Company's common stock, over a period commensurate with the remaining contractual lives, taking into account factors such as future events or circumstances that could impact volatility. The amounts estimated according to the Black-Scholes option pricing model may not be indicative of the actual values realized upon the exercise of these warrants by the holders.

All other warrants issued by the Company other than the warrants issued in connection with its December 2007, January 2009 and August 2009 financings are classified as equity; the fair value of the warrants was recorded as additional paid-in capital and no further adjustments are made. For 2011, 2010 and 2009, 255,895 shares, 255,895 shares and 2,129,530 shares, respectively, were underlying such warrants.

A summary of the Company's warrant activity with respect to 2011, 2010 and 2009 is as follows:


	For the year ended December 31,
	2011					2010					2009
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Warrants outstanding at beginning of year		29,665,441		$	1.58		32,332,996		$	3.40		10,123,759		$	8.54
Granted		—			—		—			—		24,369,238			1.41
Exercised		(460,584	)		1.39		(308,000	)		1.78		—			—
Expired		—			—		(2,359,555	)		26.50		(2,160,001	)		5.00

Warrants outstanding at end of year		29,204,857		$	1.59		29,665,441		$	1.58		32,332,996		$	3.40

Exercisable at end of year		29,204,857		$	1.59		29,665,441		$	1.58		20,948,808		$	1.60

The following table summarizes information about warrants outstanding at December 31, 2011.


Exercise Price	Outstanding Warrants at December 31, 2011		Weighted Average Remaining Contractual Life (Years)	Exercisable Warrants
$0.0003		16,667	No expiration date		16,667
0.1679		238,228	0.9		238,228
1.14		1,000	No expiration date		1,000
1.16		14,124,202	2.6		14,124,202
1.45		66,142	2.1		66,142
1.78		9,410,310	2.7		9,410,310
2.45		5,348,308	1.0		5,348,308

		29,204,857			29,204,857