|
Capital Stock
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Dec. 31, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital Stock |
9. CAPITAL STOCK: Common stock – At December 31, 2011, the Company has reserved Common Stock for issuance in relation to the following:
Stock warrants – The Company has 2,884,360 warrants outstanding in connection with the transactions described below and in Notes 6, 7 and 8. The Company has granted a 10-year warrant ("Kingstone Warrants") for 289,187 shares of Common Stock at an exercise price of $4.30 per share to Brett Kingstone. Mr. Kingstone was the chief executive officer of the Company until December 31, 2005 and was the chairman of the board of the Company until March 11, 2009. The warrant was granted on September 9, 2005. On December 7, 2006, the Company closed the private offering to a limited number of accredited investors of approximately 40,360 units at a price of $223 per unit, resulting in gross cash subscriptions of approximately $9 million, and net proceeds to the Company of approximately $8,350,000 (the "Private Placement"). Each unit consisted of 100 shares of common stock, a warrant to purchase 60 shares of common stock exercisable at $2.23 per share, expiring five years from the date of issuance (the "Base Warrants") and a second warrant to purchase 15 shares of common stock exercisable at $3.00 per share, expiring five years from the date of issuance (the "Additional Warrants"). The securities were sold solely to accredited investors in a private placement offering exempt from registration under the Securities Act of 1933, as amended. During the year ended December 31, 2008, all the outstanding Additional Warrants were exercised. During the years ended December 31, 2011 and 2010, 347,422 and 0, respectively, shares under the Base Warrants were exercised. During 2011, the Base Warrants to purchase the remaining 1,726,942 common shares expired unexercised. In connection with the Private Placement, the placement agent was paid $630,000 in cash and received a warrant (the "Placement Agent Warrant") to purchase 322,870 shares of the Company's Common Stock equal to 8% of the quotient obtained by dividing (a) the aggregate gross proceeds received by the Company from the sale of units in the Private Placement, by (b) the exercise price of the Base Warrants issued to purchasers in the Private Placement. The Placement Agent Warrant has the same terms and conditions as the Base Warrants issued to purchasers in the Private Placement. During the year ended December 31, 2009, the Placement Agent exercised 150,000 shares under the Placement Agent Warrant. During 2011, the Placement Agent Warrant to purchase the remaining 172,870 common shares expired unexercised.
In connection with the Private Placement, the Company entered into a Common Stock and Warrant Purchase Agreement with purchasers of the securities that contains customary representations, warranties and covenants. The warrants issued in the Private Placement have a term of five years and contain customary provisions for adjustment to the exercise price in the event of stock splits, combinations and dividends and, in the case of the Base Warrants, include certain cashless-exercise provisions. In connection with the Private Placement, the Company filed a registration statement with the SEC covering the resale of shares of common stock sold in the Private Placement and the shares of common stock underlying the warrants sold in the Private Placement. On June 26, 2008, the Company entered into a Note and Warrant Purchase Agreement (the "2008 Note Purchase Agreement"), with a limited number of stockholders, all of which were accredited investors. Pursuant to the 2008 Note Purchase Agreement, the Company sold an aggregate of $3,500,000 in principal amount of secured promissory notes (the "2008 Notes") and 218,750 warrants (the "2008 Promissory Note Warrants") to purchase shares of the Company's common stock. On November 12, 2008, the 2008 Notes were exchanged for preferred stock and warrants (Note 8). The 2008 Promissory Note Warrants have an exercise price of $6.40 per share and expire three years after the date of issuance. During 2011, the 2008 Promissory Note Warrants to purchase 218,750 common shares expired unexercised. The total number of shares under warrants to purchase common stock as of December 31, 2011 is listed in the table below:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||