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5. Stockholders' Equity
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12 Months Ended | |||||||||||||||
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Dec. 31, 2011
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| Notes To Financial Statements | ||||||||||||||||
| Stockholders' Equity Note Disclosure [Text Block] |
5. STOCKHOLDERS’
EQUITY
Authorized
Shares
The
Company is authorized to issue two classes of capital stock
consisting of up to 5,000,000 shares of preferred stock, $0.001
par value, and 50,000,000 shares of common stock, $0.001 par
value. On May 4, 2007, the Board of Directors
designated up to 1,761,900 shares of preferred stock as Series A
preferred stock with the following rights and preferences:
On
May 4, 2007, the Company consummated a private placement
financing which included the sale of 1,759,307 shares of
Series A preferred stock at a price of $1.70 per
share. During September and October 2007, an
aggregate of 1,620,907 shares of Series A preferred stock
were converted into an equivalent number of shares of common
stock. Cumulative unpaid dividends and the liquidation
preference relating to the Series A preferred stock at December
31, 2011 was $157,000 and $312,000, respectively. As
of December 31, 2011, 138,400 shares of Series A preferred
stock were outstanding.
Common
Stock Purchase Warrants
On
May 4, 2007, the Company issued warrants to purchase 2,059,307
shares of common stock as a component of the May 2007 private
equity placement. The warrants are exercisable at any
time during the period beginning November 4, 2007 (six
months after their issuance) and ending May 4, 2013 (six
years after their issuance). The exercise price of the
warrants is $5.00 per share. The number of shares of
common stock for which the warrants are exercisable, and the
related exercise price per share, are subject to adjustment only
in the event of stock splits, stock dividends, recapitalizations
and similar events that would affect all stockholders.
On
October 19, 2007, the Company issued warrants to purchase
3,141,499 shares of common stock in connection with a convertible
debentures financing. The warrants consisted of
seven-year warrants to purchase 1,495,952 shares of common stock,
one-year warrants to purchase 1,495,952 shares of common stock,
and five-year warrants to purchase 149,595 shares of common
stock. The term for each of the warrants began six
months and one day after their respective issuance and each have
an exercise price of $3.52 per share. The exercise
price and the number of shares underlying the warrants are
subject to adjustment for stock dividends and splits,
combinations, and reclassifications, certain rights offerings and
distributions to common stockholders, and mergers,
consolidations, sales of all or substantially all assets, tender
offers, exchange offers, reclassifications or compulsory share
exchanges. In addition, subject to certain exceptions,
the exercise price and number of shares underlying the warrants
are subject to anti-dilution adjustments from time to time if the
Company issues its common stock or equivalent securities at below
the exercise price for the warrants. If, at any time
after the earlier of October 19, 2008 and the completion of
the then applicable holding period under Rule 144, there is
no effective registration statement for the underlying shares of
common stock that are then required to be registered, the
warrants may be exercised by means of a cashless
exercise. Such one-year warrants expired unexercised
on April 21, 2009.
At
December 31, 2011, warrants to purchase 3,704,854 shares of
common stock were outstanding. The weighted-average
remaining contractual life of outstanding warrants as of December
31, 2011 was 2.1 years.
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