Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 31, 2012	Apr. 30, 2012
Document and Entity Information
Entity Registrant Name	AASTROM BIOSCIENCES INC
Entity Central Index Key	0000887359
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		38,755,642
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 36,733	$ 5,530
Receivables	11	9
Other current assets	453	636
Total current assets	37,197	6,175
Property and equipment, net	1,467	1,564
Total assets	38,664	7,739
Current liabilities:
Accounts payable and accrued expenses	3,384	2,963
Accrued employee benefits	1,398	1,042
Current portion of long-term debt	40	40
Warrant liabilities	17,525	16,625
Total current liabilities	22,347	20,670
Long-term debt	29	40
Total liabilities	22,376	20,710
Series B-1 non-voting convertible preferred stock, no par value; shares authorized and reserved - zero and 39, respectively; shares issued and outstanding - zero and 12, respectively	38,012
Shareholders' deficit:
Common stock, no par value; shares authorized - 150,000; shares issued and outstanding - 38,635 and 38,756, respectively	229,868	228,877
Deficit accumulated during the development stage	(251,592)	(241,848)
Total shareholders' deficit	(21,724)	(12,971)
Total liabilities, convertible preferred stock and shareholders' deficit	$ 38,664	$ 7,739

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Common Stock, shares authorized	150,000	150,000
Common Stock, shares issued	38,756	38,635
Common Stock, shares outstanding	38,756	38,635
Series B-1 non-voting convertible preferred stock
Preferred stock, shares authorized	39
Preferred stock, shares reserved	39
Preferred stock, shares issued	12
Preferred stock, shares outstanding	12

Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Shares outstanding equals shares issued minus shares held in treasury and other adjustments, if any.

+ References+ Details

- Definition

The maximum number of securities classified as temporary equity that are permitted to be issued by an entity's charter and bylaws. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

- Definition

The number of securities classified as temporary equity that have been sold (or granted) to the entity's shareholders. Securities issued include securities outstanding and securities held in treasury. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

- Definition

The number of securities classified as temporary equity that have been issued and are held by the entity's shareholders. Securities outstanding equals securities issued minus securities held in treasury. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References+ Details

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		276 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Revenues:
Product sales and rentals	$ 2	$ 9	$ 1,879
Research and development agreements			2,105
Grants			9,901
Total revenues	2	9	13,885
Costs and expenses:
Cost of product sales and rentals	2	2	3,043
Research and development	6,796	4,372	197,501
Selling, general and administrative	1,762	1,895	86,610
Total costs and expenses	8,560	6,269	287,154
Loss from operations	(8,558)	(6,260)	(273,269)
Other income (expense):
(Increase) decrease in fair value of warrants	(900)	1,254	11,389
Other income			1,249
Interest income	6	20	10,778
Interest expense	(3)	(2)	(482)
Total other income (expense)	(897)	1,272	22,934
Net loss	(9,455)	(4,988)	(250,335)
Accretion of convertible preferred stock	289		1,257
Net loss attributable to common shareholders	$ (9,744)	$ (4,988)	$ (251,592)
Net loss per share attributable to common shareholders (Basic and Diluted) (in dollars per share)	$ (0.25)	$ (0.13)
Weighted average number of common shares outstanding (Basic) (in shares)	38,742	38,617
Weighted average number of common shares outstanding (Diluted) (in shares)	38,742	38,617

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended		276 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Operating activities:
Net loss	$ (9,455)	$ (4,988)	$ (250,335)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	179	134	7,677
Loss on property held for resale			110
Amortization of discounts and premiums on investments			(1,704)
Stock compensation expense	815	616	14,700
Increase (decrease) in fair value of warrants	900	(1,254)	(11,389)
Inventory write downs and reserves			2,240
Stock issued pursuant to license agreement			3,300
Provision for losses on accounts receivable			204
Changes in operating assets and liabilities:
Receivables	(2)	7	(260)
Inventories			(2,335)
Other current assets	183	(13)	(433)
Accounts payable and accrued expenses	421	(592)	3,152
Accrued employee benefits	356	(329)	1,398
Net cash used for operating activities	(6,603)	(6,419)	(233,675)
Investing activities:
Organizational costs			(73)
Purchase of short-term investments			(217,041)
Maturities of short-term investments			218,745
Property and equipment purchases	(82)	(148)	(7,299)
Proceeds from sale of property held for resale			400
Net cash used for investing activities	(82)	(148)	(5,268)
Financing activities:
Net proceeds from issuance of preferred stock	37,723		89,370
Net proceeds from issuance of common stock and warrants	176	4	184,884
Payments received for stock purchase rights and other, net			3,500
Proceeds from long-term debt			751
Principal payments under long-term debt obligations	(11)	(64)	(2,811)
Other, net			(18)
Net cash provided by (used for) financing activities	37,888	(60)	275,676
Net increase (decrease) in cash and cash equivalents	31,203	(6,627)	36,733
Cash and cash equivalents at beginning of period	5,530	31,248
Cash and cash equivalents at end of period	36,733	24,621	36,733
Supplemental cash flow information
Accretion of convertible preferred stock	$ 289		$ 1,257

Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Aastrom Biosciences, Inc. was incorporated in March 1989 (Inception), began employee-based operations in 1991, and is in the development stage. The Company operates its business in one reportable segment — research and product development involving the development of patient specific cell products for use in regenerative medicine.

Successful future operations are subject to several technical hurdles and risk factors, including satisfactory product development, timely initiation and completion of clinical trials, regulatory approval and market acceptance of the Company’s products and the Company’s continued ability to obtain future funding.

The Company is subject to certain risks related to the operation of its business and development of its products and product candidates. The Company believes that it will have adequate liquidity to finance its planned operations, including development of its products and product candidates, via its cash on hand as of March 31, 2012 of $36,733,000 until at least December 31, 2012. While the Company’s budgeted cash usage and operating plan for 2012 does not currently contemplate taking additional actions to reduce the use of cash over the next nine months, the Company could, if necessary, delay or forego certain budgeted discretionary expenditures such as anticipated hiring plans or certain non-critical research and development expenditures, as well as slow down or delay certain clinical trial activity (without jeopardizing our Phase 3 clinical trial for CLI). On a longer-term basis, the Company will need to raise additional funds in order to complete its product development programs, complete clinical trials needed to market its products, and commercialize these products. The Company cannot be certain that such funding will be available on favorable terms, if at all. Some of the factors that will impact the Company’s ability to raise additional capital and its overall success include: the rate and degree of progress for its product development, the rate of regulatory approval to proceed with clinical trial programs, the level of success achieved in clinical trials, the requirements for marketing authorization from regulatory bodies in the United States and other countries, the liquidity and market volatility of the Company’s equity securities, regulatory and manufacturing requirements and uncertainties, technological developments by competitors, and other factors. If the Company cannot raise such funds, it may not be able to develop or enhance products, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements, which would likely have a material adverse impact on the Company’s business, financial condition and results of operations.

Basis of Presentation

3 Months Ended

Mar. 31, 2012

Basis of Presentation

Basis of Presentation

2. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the financial position and results of operations as of and for the periods indicated. The results of operations for the three months ended March 31, 2012, are not necessarily indicative of the results to be expected for the full year or for any other period. The December 31, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the period ended December 31, 2011, as filed with the SEC.

The consolidated financial statements include the accounts of Aastrom and its wholly-owned subsidiary, Aastrom Biosciences GmbH, located in Berlin, Germany and Aastrom Biosciences, SL, located in Barcelona, Spain (collectively, the Company). All inter-company transactions and accounts have been eliminated in consolidation. The subsidiaries are not a significant component of the consolidated financial statements as each has ceased operations and had limited operations historically.

Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

The Company measures certain assets and liabilities at fair value on a recurring basis. Fair value represents the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

· Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;

· Level 2 inputs: Inputs, other than quoted prices included in Level 1 that are observable either directly or indirectly; and

· Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

See Note 5 for disclosures related to the fair value of the Company’s warrants. The Company does not have any other assets or liabilities on the balance sheet as of March 31, 2012 that are measured at fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Stock-Based Compensation

4. Stock-Based Compensation

The Company issues nonqualified and incentive stock options as well as other equity awards pursuant to its 2009 Omnibus Incentive Plan, as amended (Option Plan). Such awards pursuant to the Option Plan may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants.

During the three months ended March 31, 2012, the Company granted 100,000 service-based options to purchase common stock. These options were granted with exercise prices equal to the fair value of the Company’s stock at the grant date, vest over four years and expire after ten years. The weighted average grant-date fair value of service-based options granted under the Company’s Option Plan during the three months ended March 31, 2011 and 2012 was $1.52 and $1.22, respectively.

The net compensation costs recorded for the service-based stock options related to employees and directors were approximately $616,000 and $815,000 for the quarters ended March 31, 2011 and 2012, respectively.

The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the weighted average assumptions noted in the following table.

	Quarter Ended March 31,
Service-Based Stock Options	2011	2012

Expected dividend rate	0%	0	%
Expected stock price volatility	74.0% - 78.9%	73.9	%
Risk-free interest rate	2.7%	1.41	%
Expected life (years)	6.0 - 6.3	6.3

The following table summarizes the activity for service-based stock options for the indicated periods:

Service-Based Stock Options	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2011	8,079,667		$	2.38	8.4	$	674,000
Granted	100,000		$	1.85
Exercised	(120,417	)	$	1.46		$	50,229
Forfeited or expired	(128,392	)	$	1.90
Outstanding at March 31, 2012	7,936,587		$	2.39	8.4	$	1,216,884
Exercisable at March 31, 2012	2,875,879		$	2.91	7.7	$	477,271

As of March 31, 2012 there was $3,778,000 of total unrecognized compensation cost related to non-vested service-based stock options granted under the Option Plan. That cost is expected to be recognized over a weighted-average period of 2.8 years.

The total fair value of options vested during the quarter ended March 31, 2011 and 2012 was $376,000 and $836,000, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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+ Details

Stock Purchase Warrants

3 Months Ended

Mar. 31, 2012

Stock Purchase Warrants

Stock Purchase Warrants

5. Stock Purchase Warrants

The Company has historically issued warrants to purchase shares of the Company’s common stock in connection with certain of its common stock offerings. The following warrants were outstanding at March 31, 2012, and include provisions that could require cash settlement of the warrants or have anti-dilution price protection provisions requiring each to be recorded as liabilities of the Company at the estimated fair value at the date of issuance, with changes in estimated fair value recorded as non-cash income or expense in the Company’s statement of operations in each subsequent period:

(i) warrants to purchase an aggregate of 740,131 shares of the Company’s common stock, issued on October 17, 2007 in connection with the Company’s registered direct offering, exercisable from April 18, 2008 through April 17, 2013 at an exercise price of $12.72 per share, all of which remained outstanding as of March 31, 2012;

(ii) Class A warrants to purchase an aggregate of 4,882,228 shares of the Company’s common stock, issued on January 21, 2010 in connection with the Company’s registered public offering, exercisable for a five year period commencing on July 21, 2010 at an exercise price of $2.52 per share (as adjusted from $2.97 per share for the anti-dilution provision triggered in the December 2010 financing), 4,525,978 of which remained outstanding as of March 31, 2012; and

(iii) warrants to purchase an aggregate of 10,000,000 shares of the Company’s common stock, issued on December 15, 2010 in connection with the Company’s registered public offering, exercisable for a five year period commencing on December 15, 2010 at an exercise price of $3.22 per share, all of which remained outstanding as of March 31, 2012.

The Class A warrants and the December 2010 warrants are measured using the Monte Carlo valuation model, while the October 2007 warrants are measured using the Black-Scholes valuation model. Both of the methodologies are based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent the Company’s best estimates, however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liabilities and the change in estimated fair value of the warrants could be materially different.

Inherent in both the Monte Carlo and Black-Scholes valuation models are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The Monte Carlo model is used for the Class A warrants and the December 2010 warrants to value the potential future exercise price adjustments triggered by the anti-dilution provisions as well as the value of the put feature of the December 2010 warrants. These both require Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and fundamental transactions. The other assumptions used by the Company are summarized in the following tables:

October 2007 Warrants	December 31, 2011			March 31, 2012
Closing stock price	$	1.82		$	2.02
Expected dividend rate	0		%	0		%
Expected stock price volatility	93.6		%	50.9		%
Risk-free interest rate	0.1		%	0.2		%
Expected life (years)	1.25			1.00

January 2010 Class A Warrants	December 31, 2011			March 31, 2012
Closing stock price	$	1.82		$	2.02
Expected dividend rate	0		%	0		%
Expected stock price volatility	86.1		%	76.2		%
Risk-free interest rate	0.5		%	0.6		%
Expected life (years)	3.50			3.25

December 2010 Warrants	December 31, 2011			March 31, 2012
Closing stock price	$	1.82		$	2.02
Expected dividend rate	0		%	0		%
Expected stock price volatility	83.6		%	84.9		%
Risk-free interest rate	0.6		%	0.7		%
Expected life (years)	3.96			3.71

The following table summarizes the change in the estimated fair value of the Company’s warrant liabilities (in thousands):

Warrant Liabilities
Balance at December 31, 2011	$	16,625
Increase in fair value	900
Balance at March 31, 2012	$	17,525

Series B Convertible Preferred Stock

3 Months Ended

Mar. 31, 2012

Series B Convertible Preferred Stock

Series B Convertible Preferred Stock

6. Series B Convertible Preferred Stock

On March 9, 2012, the Company completed the sale of 12,308 shares of Series B-1 Non-Voting Convertible Preferred Stock (Series B-1 Preferred Stock) at an offering price of $3,250 per share. The Company received $37,723,000 in net proceeds from the sale of the shares of Series B-1 Preferred Stock, after offering expenses. In addition to the Series B-1 Preferred Stock, which was issued at the closing, the Company also authorized Series B-2 Voting Convertible Preferred Stock (Series B-2 Preferred Stock) and the Company refers to the Series B-1 Preferred Stock and Series B-2 Preferred Stock as the Series B Preferred Stock. The Series B-1 Preferred Stock is not entitled to vote on matters on which the common shareholders are generally entitled to vote. The Series B-2 Preferred Stock will be entitled to vote with the holders of the common stock as a single class, with each share of Series B-2 Preferred Stock having the number of votes equal to the number of shares of common stock issuable upon conversion of such Series B-2 Preferred Stock. Any holder of Series B-1 Preferred Stock may exchange its shares for shares of Series B-2 Preferred Stock on a one-for-one basis if the shareholder approval required in accordance with Nasdaq Marketplace Rule 5635(b) has been obtained, subject to certain terms and limitations. The Series B Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank on parity with any other class or series of the Company capital stock that the Company may issue in the future which is designated as being on parity with the Series B Preferred Stock, and rank senior to our common stock and Series A preferred stock. The Series B Preferred Stock is convertible, at the option of the holder thereof at any time after the five year anniversary of the closing of the offering, into shares of our common stock at a conversion price of $3.25 per share of common stock, subject to the Company obtaining the shareholder approval required in accordance with Nasdaq Marketplace Rule 5635(b). At any time after the five year anniversary of issuance, the Company may elect to convert any or all outstanding shares of Series B Preferred Stock into shares of our common stock, subject to certain limitations. Dividends on the Series B Preferred Stock will be cumulative and compound daily, at a rate of 11.5% per annum, payable upon conversion, liquidation, redemption or other similar events, and payable in Series B-1 Preferred Stock until the five year anniversary of issuance. Following the five year anniversary of issuance and until the earlier of the tenth anniversary of the issuance and the date no Series B Preferred Stock remain outstanding, dividends will accrue at a rate of 8% per annum and will be payable in cash or Series B-1 Preferred Stock, at our option. Unless prohibited by Michigan law governing distributions to shareholders, the Series B-1 Preferred Stock shall be redeemable at the option of holder of the Series B-1 Preferred Stock commencing at any time after the five year anniversary of issuance, liquidation, winding up, dissolution or other similar events, subject to certain terms and limitations.

The Series B Preferred Stock does not, in its entirety, require liability classification and has been evaluated for embedded features to determine if those features require bifurcation and separate classification as derivative liabilities. The Series B Preferred Stock host contract was evaluated for equity or mezzanine classification based upon the nature of the redemption and conversion features. Generally, any feature that could require cash redemption for matters not within the Company’s control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. The Series B Preferred Stock has been recorded in the mezzanine section and will be accreted to its redemption value through charges to stockholders’ equity (deficit) using the effective interest method.

The Series B Preferred Stock was initially recorded at fair value of the security as of the issuance date of the private placement, net of issue costs of $2,279,000. The carrying value of the Series B Preferred Stock presented as mezzanine equity in the consolidated financial statements is $38,012,000 as of March 31, 2012. The Company is required to accrete the carrying value of the Series B Preferred Stock to its redemption value of $71,103,000 by charges to accumulated deficit using the effective interest method. Subsequent to March 31, 2012, the Company obtained shareholder approval in accordance with Nasdaq Marketplace Rule 5635(b), which allowed 12,308 shares of B-1 Preferred Stock to exchange for 12,308 shares of B-2 Preferred Stock on May 3, 2012. As such, the redemption value as of May 3, 2012 is $31,102,000.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 14: http://www.xbrl.org/2003/role/presentationRef

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Reference 15: http://www.xbrl.org/2003/role/presentationRef

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Reference 19: http://www.xbrl.org/2003/role/presentationRef

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Reference 21: http://www.xbrl.org/2003/role/presentationRef

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+ Details

Net Loss Per Common Share

3 Months Ended

Mar. 31, 2012

Net Loss Per Common Share

Net Loss Per Common Share

7. Net Loss Per Common Share

Basic earnings (loss) per share is calculated using the two-class method, which is an earnings allocation formula that determines earnings (loss) per share for the holders of the Company’s common shares and holders of the Series B Preferred Stock. The Series B Preferred Stock shares contain participation rights in undistributed earnings, but do not share in the losses of the Company. Therefore, in the event of a loss from continuing operations, the Series B Preferred Stock is not considered in the calculation of basic loss per share.

Net loss per common share is computed using the weighted-average number of common shares outstanding during the period. Common equivalent shares are not included in the diluted per share calculation where the effect of their inclusion would be anti-dilutive. The aggregate number of common equivalent shares (related to options, warrants and preferred stock) that have been excluded from the computations of diluted net loss per common share at March 31, 2011 and 2012 were 24,941,000 and 35,632,110, respectively.

- Definition

The entire disclosure for earnings per share.

+ References+ Details