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Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2012
Summary of Significant Accounting Policies [Abstract]  
Revenue Recognition
Revenue Recognition
 
We defer recognition of revenue in accordance with ASC Topic 605 until such time as all of the criteria below have been met:
 
●
persuasive evidence of sales arrangements;

●
delivery has occurred or services have been rendered;

●
the buyer's price is fixed or determinable; and

●
collection is reasonably assured.
 
We expect that some or all of our future licensing agreements will provide for payments to us over an extended period of time. For a licensing agreement with fixed royalty payments, we expect to recognize revenue as amounts become due. For a licensing agreement with variable royalty payments we expect to recognize royalty revenue at the time that the licensees' sales occur; however, because we expect that a licensee may report sales information to us on a delayed basis, we expect our revenue recognition criterion may also be met on a delayed basis.
 
Complex revenue arrangements may require us to make significant judgments, assumptions and estimates about when substantial delivery of contract elements will occur, whether any significant ongoing obligations exist subsequent to contract execution, whether amounts due are collectible and the appropriate period  in which the completion of the earning process occurs. If new information subsequently becomes known to us which causes us to make different judgments, assumptions or estimates regarding material contracts, our financial results may be materially affected.
Earnings Per Share
Earnings Per Share
 
Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period.  Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. During the three months ended March 31, 2012 and 2011, we incurred losses; therefore, the effect of any Common Stock equivalents was anti-dilutive during those periods.
Concentration of Credit Risk and Other Risks and Uncertainties
Concentration of Credit Risk and Other Risks and Uncertainties
 
Our cash and cash equivalents are primarily maintained at two major financial institutions in the United States.  Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits.  A portion of those balances are insured by the Federal Deposit Insurance Corporation, or FDIC.  During the period ended March 31, 2012 and 2011, we had, at times, funds that were uninsured.  The uninsured balance at March 31, 2012, was approximately $18,715 compared to $29,185 at December 31, 2011.  We do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions. We have not experienced any losses on our deposits of cash and cash equivalents.
Derivative Instruments
Derivative Instruments
 
Our Series I Warrants contain an anti-dilution provision which precludes them from being considered indexed to our stock. As a result, the warrants are required to be accounted for as derivative instruments.
 
We recognize derivative instruments as either assets or liabilities on the accompanying Condensed Consolidated Balance Sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives in the accompanying Condensed Consolidated Statements of Operations.
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets
 
On an annual basis we identify and record impairment losses on long-lived assets used in operations when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable.  Recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets' carrying value.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
 
Fair value is the price that would result from an orderly transaction between market participants at the measurement date. A fair value hierarchy prioritizes the inputs used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).  Level 2 measurements utilize observable inputs in markets other than active markets.
 
Our financial instruments are stated at amounts that equal to, or approximate, fair value.  When we approximate fair value, we utilize market data or assumptions that we believe market participants would use in pricing the financial instrument, including assumptions about risk and inputs to the valuation technique.  We use quoted valuation techniques, primarily the income and market approach, that maximize the use of observable inputs and minimize the use of unobservable inputs for recurring fair value measurements.
 
Certificate of deposits: Fair value measured at face value plus accrued interest.
 
Corporate bonds:  Fair value measured at the closing price reported on the active market on which the individual securities are traded.
 
Series I Warrants: Fair value measured by using a Binomial valuation model.  As of March 31, 2012 and December 31, 2011, the assumptions used to measure fair value of our outstanding Series I Warrants carried as derivative liabilities on our condensed consolidated balance sheet for March 31, 2012 included a warrant exercise price of $3.59 per share, a common share price of $23.93, a discount rate of 1.04%, and a volatility of 115%. The assumptions used for December 31, 2011 was a warrant exercise price of $3.59 per share, a common share price of $24.97, a discount rate of 0.83%, and a volatility of 123%.
 
The following tables show our securities' adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category  as of March 31, 2012 and December 31, 2011.
                                                                                                
   March 31, 2012 
Level 1:
 
 
Adjusted Cost
 
 
Unrealized Gains
 
 
Unrealized Losses
 
 
Fair Value
 
Certificates of deposit
 
 
$
3,332
 
 
$
3
 
 
$
-
 
 
$
3,335
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Bonds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
 
 
4,185
 
 
 
13
 
 
 
-
 
 
 
4,198
 
    A 
 
 
7,261
 
 
 
-
 
 
 
(7
)
 
 
7,254
 
BAA
 
 
 
5,179
 
 
 
-
 
 
 
(31
)
 
 
5,148
 
Total Corporate Bonds
 
 
 
16,625
 
 
 
13
 
 
 
(38
)
 
 
16,600
 
                  
Total Investments at Fair Value
 
 
$
19,957
 
 
$
16
 
 
$
(38
)
 
$
19,935
 
 
   December 31, 2011 
Level 1:
 
 
Adjusted Cost
 
 
Unrealized Gains
 
 
Unrealized Losses
 
 
Fair Value
 
Certificates of deposit
 
 
$
2,582
 
 
$
2
 
 
$
-
 
 
$
2,584
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Bonds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AA
 
 
 
2,014
 
 
 
-
 
 
 
(3
)
 
 
2,011
 
       A 
 
 
9,846
 
 
 
-
 
 
 
(3
)
 
 
9,843
 
Total Corporate Bonds
 
 
 
11,860
 
 
 
-
 
 
 
(6
)
 
 
11,854
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Investments at Fair Value
 
 
$
14,442
 
 
$
2
 
 
$
(6
)
 
$
14,438
 

The following tables set forth by level within the fair value hierarchy, our financial instrument liabilities as of March 31, 2012 and December 31, 2011.
 
  March 31, 2012 
 
 
Quoted
Prices in
Active
Markets for
Identical
Assets
 
 
Significant
Other
Observable
Inputs
 
 
Significant
Unobservable
Inputs
 
 
 
 
 
 
(Level 1)
 
 
(Level 2)
 
 
(Level 3)
 
 
Total
 
Series l Warrants
 
$
-
 
 
$
-
 
 
$
4,430
 
 
$
4,430
 
Total
 
$
-
 
 
$
-
 
 
$
4,430
 
 
$
4,430
 
 
  
December 31, 2011
 
 
 
Quoted
Prices in
Active
Markets for
Identical
Assets
 
 
Significant
Other
Observable
Inputs
 
 
Significant
Unobservable
Inputs
 
 
 
 
 
 
(Level 1)
 
 
(Level 2)
 
 
(Level 3)
 
 
Total
 
Series l Warrants
 
$
-
 
 
$
-
 
 
$
4,699
 
 
$
4,699
 
Total
 
$
-
 
 
$
-
 
 
$
4,699
 
 
$
4,699
 
 
The following table sets forth a summary of changes in the fair value of our Level 3 financial instrument liability for the period ended March 31, 2012 and year ended December 31, 2011:
                                                                                                                    
  March 31, 2012   December 31, 2011 
  
Fair Value
Measurements
Using
Significant
Unobservable
Inputs (Level3)
   
Fair Value
Measurements
Using
Significant
Unobservable
Inputs (Level3)
 
Balance December 31, 2011
 $4,699 
Balance December 31, 2010
 $14,364 
Net gain included in loss
  (269 )
Net loss included in earnings
  5,595 
Settlements
  - 
Settlements
  (15,260)
Balance March 31, 2012
 $4,430 
Balance December 31, 2011
 $4,699