Stock Purchase Warrants

6 Months Ended

Jun. 30, 2012

Stock Purchase Warrants [Abstract]

Stock Purchase Warrants [Text Block]

6.   Stock Purchase Warrants

On March 15, 2012, the Company entered into a consulting agreement for a financial communications program, for a period of twelve months that began on February 20, 2012. As compensation for such program, the consultant is paid a monthly fee and will be issued a performance warrant exercisable for 250,000 shares of the Company’s common stock based on achievement of certain milestones. Upon initiation of the program, 50,000 of the performance warrants will vest. The performance warrant is exercisable for a period of two years from the date the agreement was executed for an exercise price equal to the price of the Company’s common stock on the date of execution. Approval of these warrants from NYSE MKT is pending. The expense recorded for the six months ended June 30, 2012 approximated $61,000 and was estimated using the Black-Scholes valuation model. The assumptions used by the Company are summarized in the following table:

Exercise price	$	2.20
Expected dividends		0	%
Expected volatility		108	%
Risk free interest rate		0.37	%
Expected life of warrant		2 years
Expected forfeitures		0	%

On December 20, 2011, the Company entered into a consulting agreement for financial advisory services, for a period of twelve months. As compensation for such services, the consultant is paid a monthly fee and on February 2, 2012, was issued a warrant exercisable for 100,000 shares of the Company’s common stock. The warrant is exercisable upon issuance for a period of five years from the date of issue at an exercise price equal to the price of the Company’s common stock on the date of issue. The fair value of the warrant approximated $200,000 and was measured using the Black-Scholes valuation model. The assumptions used by the Company are summarized in the following table:

Exercise price	$	1.14
Expected dividends		0	%
Expected volatility		174	%
Risk free interest rate		0.71	%
Expected life of warrant		5 years
Expected forfeitures		0	%

On April 6, 2011, the Company entered into a Common Stock Purchase Agreement with an institutional investor. As part of this agreement, the Company issued a warrant to purchase 844,391 shares of common stock. The warrants have an exercise price of $1.00 and a life of fifteen months. The warrants vested immediately and expire August 10, 2012. As of June 30, 2012, 94,391 of these warrants remained outstanding.

On January 28, 2011, the Company entered into a Common Stock Purchase Agreement with three institutional investors. As part of this agreement, the Company issued warrants to purchase 1,428,572 shares of common stock. The warrants have an exercise price of $1.40 and a life of fifteen months. The warrants vested immediately and all warrants were exercised.

On July 2, 2010, the Company entered into a Common Stock Purchase Agreement with a single investor. As part of this agreement, the Company issued warrants to purchase 60,606 shares of common stock to the placement agent, or its permitted assigns. The warrants have an exercise price of $1.32 and a life of 5 years. The warrants vested on January 1, 2011 and expire December 31, 2015. Since these warrants were granted as part of an equity raise, the Company has treated them as a direct offering cost. The result of the transaction has no affect to equity. As of June 30, 2012, there were 18,182 warrants outstanding.

A summary of warrant activities as of June 30, 2012, and for the year ended December 31, 2011, is as follows:

	Warrants			Weighted Average Exercise Price
Balance – December 31, 2010		1,131,078		$	3.49
Granted		2,272,963			1.25
Exercised		(15,615	)		1.03
Expired		(129,240	)		2.08
Balance – December 31, 2011		3,259,186			1.99
Granted		350,000			1.90
Exercised		(1,673,776	)		1.11
Cancelled by cashless exercise		(516,917	)		1.40
Balance – June 30, 2012 – outstanding		1,418,493		$	3.10
Balance – June 30, 2012 – exercisable		1,218,493		$	3.25

The Company recognized $0 and $760,000 in compensation expense relating to stock purchase warrants for the three month periods ended June 30, 2012 and 2011, respectively, and $270,000 and $1.6 million for the six month periods ended June 30, 2012 and 2011.

 The warrants outstanding as of June 30, 2012, are as follows:

Exercise Price		Warrants Outstanding		Warrants Exercisable		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
$	1.00		94,391		94,391		0.11 years	$	93,000
$	1.14		100,000		100,000		4.59 years		84,000
$	1.32		18,182		18,182		3.50 years		12,000
$	2.20		250,000		50,000		1.71 years		-
$	2.22		517,257		517,257		4.41 years		-
$	3.30		61,207		61,207		3.92 years		-
$	3.75		50,000		50,000		3.63 years		-
$	6.36		327,456		327,456		0.36 years		-
			1,418,493		1,218,493		1.81 years	$	189,000