SUBSEQUENT EVENT EFFORTS TO PRESERVE CASH

9 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

E. SUBSEQUENT EVENT – EFFORTS TO PRESERVE CASH

On October 13, 2011, the Company’s Board of Directors (the “Board”) adopted a plan to preserve cash during our ongoing partnering efforts and a reduction from 18 full time employees to four full time employees.  Included in the actions taken, was the termination of the employment of John M. Holliman, III, Executive Chairman, Randolph C. Steer, MD, Ph.D., President and Dana B. Shinbaum, Vice President, Business Development.  Each of these individuals will continue in their prior roles as consultants, rather than as employees and Les M. Taeger, Chief Financial Officer and Senior Vice President will continue as an employee, but at consulting/salary rates reflecting substantial reductions in compensation. All of these officers had also been eligible for an annual bonus based on individual and Company performance goals of up to 40% of their base compensation.  The Board’s actions included cancellation of the Company bonus plan.  Outstanding stock options held by each executive will continue to vest and are exercisable while such executive is serving as a consultant to the Company.

Severance payments authorized by the Board related to changes in employment and compensation totaled approximately $1,700,000, of which approximately $1,362,000 were required by employment agreements.  Most severance payments will occur in the fourth quarter of 2011.  No amounts related to the severance were accrued as of September 30, 2011.