Quarterly report pursuant to Section 13 or 15(d)

NOTE 5: CONVERTIBLE NOTES AND DETACHABLE WARRANTS

v2.4.0.6
NOTE 5: CONVERTIBLE NOTES AND DETACHABLE WARRANTS
6 Months Ended
Jun. 30, 2012
Debt Disclosure [Text Block]
NOTE 5:                      CONVERTIBLE NOTES AND DETACHABLE WARRANTS

10% Senior Convertible Notes due August 15, 2011

Pursuant to the terms of a Securities Purchase Agreement dated August 14, 2008, the Company issued and sold to a group of institutional investors 10% senior convertible notes in the aggregate principal amount of $5.0 million due August 15, 2011. These notes were convertible at any time prior to August 15, 2011 at a conversion price of $2.24 per share. As part of the Company’s analysis of the convertible debt and related warrants, the Company reviewed and followed the guidance of FASB ASC 718-10, ASC 815-40-15, ASC 470-20-30 and ASC 105-10-05.

As part of the securities purchase agreement, the Company issued to the purchasers of its 10% senior convertible notes due August 15, 2011, warrants to purchase an aggregate of 558,036 shares of common stock at any time prior to August 15, 2011 at a price of $2.24 per share. The warrants were classified in 2008 as equity based on relative fair value. The relative fair value of these warrants was determined in 2008 using the Black-Scholes pricing model.

As of August 15, 2011, the Notes were paid in full and all associated warrants had expired.