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NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Description of Business   We are a biopharmaceutical company focused on the acquisition, development and commercialization of innovative and medically important pharmaceutical products for the treatment of cancer and other underserved therapeutic needs. We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest, funding their research and development and eventually either out-licensing or bringing the technologies to market. Currently we are developing TGTX-1101 (ublituximab), a novel, third generation monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. We also hold the development rights to AST-726, a nasally delivered product for the treatment of Vitamin B12 deficiency, and AST-915, an orally delivered treatment for essential tremor.   The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the consolidated financial statements have been included. Nevertheless, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.   On December 29, 2011, the Company entered into and consummated an exchange transaction agreement (the “Exchange Transaction”) with Opus Point Partners, LLC (“Opus”) and TG Biologics, Inc. (formerly known as TG Therapeutics, Inc.) (“TG Bio”). The stockholders of TG Bio received the majority of the voting shares of the Company, therefore, the merger was accounted for as a reverse acquisition whereby TG Bio was the accounting acquirer (legal acquiree) and the Company was the accounting acquiree (legal acquirer) under the acquisition method of accounting. TG Bio was incorporated in Delaware in November 2010, but did not commence operations until April 2011, thus the accompanying consolidated financial statements do not include comparative financial information for the three months ended March 31, 2011.   On April 30, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation to change its name from Manhattan Pharmaceuticals, Inc. (“Manhattan”) to TG Therapeutics, Inc. In conjunction with this change, the subsidiary formerly named TG Therapeutics, Inc. filed a Certificate of Amendment changing its name to TG Biologics, Inc.   Liquidity and Capital Resources   We have incurred operating losses since our inception and expect to continue to incur operating losses for the foreseeable future and may never become profitable. As of March 31, 2012, we have an accumulated deficit of $11,109,164.   Our primary source of cash has been proceeds from the private placement of equity securities. We have not yet commercialized any of our drug candidates and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become profitable. Our ability to achieve profitability depends on a number of factors, including our ability to obtain regulatory approval for our drug candidates, successfully complete any post-approval regulatory obligations and successfully commercialize our drug candidates alone or in partnership. We may continue to incur substantial operating losses even if we begin to generate revenues from our drug candidates.   On December 30, 2011, we completed the first closing of the private placement of our securities, issuing 4,929,523 shares of Company $0.001 par value common stock (“Common Stock “) at a price per share of $2.25 for total gross proceeds, before placement commissions and expenses, of $11,091,425 (the “2011 Equity PIPE”). Investors also received warrants to purchase 1,232,381 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years.   In 2012, we completed two additional closings of the 2011 Equity PIPE. These closings were held on January 31, 2012, and February 24, 2012. In these closings, the Company issued 695,428 shares of our Series A preferred stock (“Company Preferred Stock”) at a price per share of $20.00, for total gross proceeds, before placement commissions and expenses, of $13,908,560. Each share of Company Preferred Stock is convertible into 8.89 shares of Common Stock, provided that such conversion rights are subject to sufficient available authorized shares of Common Stock. Investors also received warrants to purchase 1,545,396 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years. The shares of Company Preferred Stock and warrants sold in these closings were offered and sold to accredited investors, including members of management, without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(2) of the Securities Act, and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, the securities issued in the Offering have not been registered under the Securities Act, and until so registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration.   Our Common Stock is quoted on the OTC Bulletin Board and trades under the symbol “TGTX.OB.”   Reverse Stock Split   On April 30, 2012, the Company effected a reverse split of its Common Stock at a ratio of 56.25 for 1, pursuant to a previously obtained stockholder authorization. All share amounts and per share prices in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the effect of our reverse stock split, on a fifty six and one quarter (56.25) for one (1) basis, unless otherwise indicated.  The exercise price for all stock options and warrants and the conversion price for convertible securities in the accompanying condensed consolidated financial statements have been adjusted to reflect the reverse stock split by multiplying the original exercise or conversion price by fifty six and one quarter (56.25).   Cash and Cash Equivalents   We treat liquid investments with original maturities of less than three months when purchased as cash and cash equivalents.   Research and Development Costs   Research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations, or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract.   In-Process Research and Development   All acquired research and development projects are recorded at their fair value as of the date acquisition. The fair values are assessed annually in the fourth quarter to ascertain if there has been any impairment of the recorded value. If there is an impairment, the asset is written down to its current fair value by the recording of an expense. Impairment testing consists of a comparison of the fair value of the in-process research and development with its carrying amount.   Income Taxes   Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation allowance is then created.   We, and our subsidiaries, file income tax returns in the U.S. Federal jurisdiction and in various states. We have tax net operating loss carryforwards that are subject to examination for a number of years beyond the year in which they were generated for tax purposes. Since a portion of these net operating loss carryforwards may be utilized in the future, many of these net operating loss carryforwards will remain subject to examination.   We recognize interest and penalties related to uncertain income tax positions in income tax expense.   Stock-Based Compensation   We recognize all share-based payments to employees and to non-employee directors as compensation for service on our board of directors as compensation expense in the consolidated financial statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.   For share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.   Basic and Diluted Net (Loss) Income Per Share of Common Stock   Basic net income (loss) per share of Common Stock is calculated by dividing net income (loss) applicable to the Common Stock by the weighted-average number of the Common Stock outstanding for the period. Diluted net loss per share of Common Stock is the same as basic net income (loss) per share of Common Stock since potentially dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either because the Company incurred a net loss during the period presented or because such potentially dilutive securities were out of the money and the Company realized net income during the period presented. The amounts of potentially dilutive securities excluded from the calculation were 14,154,452 at March 31, 2012. During the three months ended March 31, 2012, the Company incurred a net loss; therefore, all of the dilutive securities are excluded from the computation of diluted earnings per share.   Impairment   Long lived assets are reviewed for an impairment loss when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the difference between the carrying value and the estimated fair value.   Goodwill is reviewed for impairment annually or when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit's carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to perform impairment tests annually at December 31 and whenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable.

NOTE 3 - ACQUISITION   On December 29, 2011, the Company completed a reverse acquisition of privately held TG Bio, a Delaware Corporation. The acquisition was effected pursuant to an Exchange Transaction Agreement (the “Agreement”) dated December 29, 2011 by and among the Company, TG Bio and Opus, the largest shareholder of TG Bio. In accordance with the terms of the Agreement, 95% of the holders of common stock of TG Bio (one (1) minority shareholder of TG Bio holding in aggregate 132,000 shares of common stock of TG Bio did not participate) surrendered their TG Bio common stock. The Agreement caused the Company to issue to TG Bio’s shareholders 281,250 shares of Company Preferred Stock. Each share of Company Preferred Stock is convertible into 8.89 shares of the Common Stock provided that such conversion rights are subject to sufficient available authorized shares of Common Stock. The Company Preferred Stock has the same voting rights (on an as-converted basis), and other attributes as Common Stock. The Company Preferred Stock will automatically be exchanged for Common Stock when sufficient authorized shares are available to allow for such conversion. The Company Preferred Stock issued in connection with the Agreement, provided the former TG Bio shareholders with direct and/or indirect ownership of approximately 95% of the Company’s outstanding Company Common Stock immediately following the consummation of the transaction.   The Company Preferred Stock issued (and the underlying Common Stock once converted) are not registered for resale and, therefore, shall remain subject to the rights and restrictions of Rule 144. All Company Preferred Stock received by the TG Bio shareholders in exchange for their shares of TG Bio common stock will not be registered for resale prior to six (6) months following December 29, 2011 and, therefore, shall remain subject to the rights and restrictions of Rule 144 prior to any such registration.   The Company Preferred Stock issued in connection with the agreement provided the former TG Bio shareholders with direct and/or indirect ownership of approximately 95% of the Company’s outstanding common stock as of December 29, 2011. Based on fair value of the Company’s Common Stock of $0.04 per share, the purchase price was $295,933, plus the fair value of restricted stock assumed of $82,305. In connection with the Exchange Transaction, the Company incurred $231,580 of acquisition related costs.   A summary of the purchase price calculation is as follows:   <table style="width: 70%; border-collapse: collapse; font: 10pt times new roman, times, serif; margin-left: 0.5in;" cellspacing="0" cellpadding="0"> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -12.6pt; padding-left: 12.6pt; width: 74%;">Number of shares of Manhattan common stock outstanding at the time of the transaction</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;"> </td> <td style="text-align: right; width: 10%;">131,526</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;"> </td> <td style="text-align: right; width: 10%;"> </td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in;">Multiplied by Manhattan’s fair value of the Common Stock</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;">$</td> <td style="border-bottom: black 1pt solid; text-align: right;">2.25</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;">$</td> <td style="text-align: right; padding-bottom: 1pt;">295,933</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt;">Fair value of restricted stock assumed</td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">82,305</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 12.6pt;">Total purchase price</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="text-align: right; padding-bottom: 2.5pt;"> </td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">378,238</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   The purchase price has been allocated as follows based on the fair values of the assets and liabilities acquired:   <table style="width: 70%; border-collapse: collapse; font: 10pt times new roman, times, serif; margin-left: 0.5in;" cellspacing="0" cellpadding="0"> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.25in; padding-left: 0.25in; width: 87%;">Cash and cash equivalents</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 10%;">10,386</td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.25in; padding-left: 0.25in;">Other assets</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">90,769</td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in;">In-process research and development acquired</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">5,441,840</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.36in;">Total identifiable assets</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">5,542,995</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.25in; padding-left: 0.25in;">Accounts payable and accrued expenses</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">197,191</td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.25in; padding-left: 0.25in;">Notes payable (ICON and Swiss Pharma)</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">939,718</td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in;">5% notes payable and accrued interest</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">4,657,600</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.36in;">Total identifiable liabilities</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">5,794,509</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -0.25in; padding-left: 0.25in;">Net identifiable liabilities</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">(251,514</td> <td style="text-align: left;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in;">Goodwill</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">629,752</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.36in;">Total</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">378,238</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   A valuation was performed to determine the fair value of certain identifiable intangible assets of Manhattan.   The fair value of certain identifiable intangible assets was determined using the income approach. This method starts with a forecast of the expected future net cash flows. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk of achieving the asset’s projected cash flows. The present value of the estimated cash flows are then added to the present value equivalent of the residual value of the asset, if any, at the end of the discrete projection period to estimate the fair value.   The valuations are based on information that is available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by our management. No assurance can be given, however, that the underlying assumptions or events associated with such assets will occur as projected. For these reasons, among others, the actual results may vary from the projected results.   The following supplemental pro forma information presents the financial results as if the transaction had occurred on January 1, 2011 for the three months ended March 31, 2011. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been made on January 1, 2011, nor are they indicative of future results.   <table style="width: 60%; border-collapse: collapse; font: 10pt times new roman, times, serif; margin-left: 0.5in;" cellspacing="0" cellpadding="0"> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Revenue</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; width: 82%;">Net income</td> <td style="padding-bottom: 2.5pt; width: 1%;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right; width: 15%;">3,832,383</td> <td style="text-align: left; padding-bottom: 2.5pt; width: 1%;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Basic and diluted income per common share</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">1.51</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>

NOTE 4 - STOCKHOLDERS' EQUITY   Preferred Stock   Our amended and restated certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, $0.001 par value, with rights senior to those of our common stock, issuable in one or more series. Upon issuance, the Company can determine the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock.   There were 1,108,816 shares of Company Preferred Stock outstanding as of March 31, 2012. In connection with the Exchange Transaction, the Company filed a Certificate of Designation with respect to its Company Preferred Stock with the Secretary of State of the State of Delaware.  The Company Preferred Stock ranks senior to the Common Stock with regard to dividend rights, and has a liquidation preference of $20 per share over the Common Stock and any other junior securities. The Company Preferred Stock is automatically convertible into 8.89 shares of Common Stock provided that, prior to conversion, the Company has sufficient authorized Common Stock to effect such conversion.  The Company Preferred Stock also automatically converts upon a change of control of the Company or the sale of substantially all of the assets of the Company.  The Company Preferred Stock votes on an as-converted basis with the Common Stock.   In conjunction with the reverse split effected on April 30, 2012 (as discussed in Note 1), our Company Preferred Stock automatically converted to 9,856,259 shares of Common Stock as of that date.   Common Stock   Our amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of $0.001 par value common stock.   On December 30, 2011, we completed the first closing of the private placement of our securities, issuing 4,929,523 shares of Common Stock at a price per share of $2.25 for total gross proceeds, before placement commissions and expenses, of $11,091,425 (the “2011 Equity PIPE”). Investors also received warrants to purchase 1,232,381 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years.   In 2012, we completed two additional closings of the 2011 Equity PIPE. These closings were held on January 31, 2012, and February 24, 2012. In these closings, the Company issued 695,428 shares of our Company Preferred Stock at a price per share of $20.00 for total gross proceeds, before placement commissions and expenses, of $13,908,560. Each share of Company Preferred Stock is convertible into 8.89 shares of Common Stock provided that such conversion rights are subject to sufficient available authorized shares of Common Stock. Investors also received warrants to purchase 1,545,396 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years. The shares of Company Preferred Stock and warrants sold in these closings were offered and sold to accredited investors, including members of management, without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(2) of the Securities Act, and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, the securities issued in the offering have not been registered under the Securities Act, and until so registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration. The placement agent received cash commissions equal to 10% of the gross proceeds of the offering, five-year warrants to purchase shares of the Company’s stock equal to 10% of shares sold in the offering, and a non-accountable expense allowance equal to two percent of the gross proceeds of the offering for their expenses.     Equity Incentive Plans   A summary of the status of the Company’s stock options as of March 31, 2012 and changes during the period then ended is presented below:   Stock Options   The following table summarizes stock option activity for the three months ended March 31, 2012:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">   Number of shares </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2"> Weighted- average exercise price </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2"> Weighted- average Contractual Term </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">   Aggregate Intrinsic Value </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: right;" colspan="2"> </td> <td> </td> <td> </td> <td style="text-align: right;" colspan="2"> </td> <td> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2">(in years)</td> <td style="font-weight: bold;"> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; width: 48%;">Outstanding at December 31, 2011</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;"> </td> <td style="text-align: right; width: 10%;">3,379</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 10%;">1,315.62</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;"> </td> <td style="text-align: right; width: 10%;">6.39</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;"> </td> <td style="text-align: right; width: 10%;"> </td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-left: 9pt;">Granted</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-left: 9pt;">Exercised</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-left: 9pt;">Forfeited</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">(2,475</td> <td style="text-align: left;">)</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">720.45</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 9pt;">Expired</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;">—</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Outstanding at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">904</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">2,945.09</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">2.49</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;"> </td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Vested and expected to vest at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">904</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">2,945.09</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">2.49</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Exercisable at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">898</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">2,963.46</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;"> </td> <td style="border-bottom: black 2.5pt double; text-align: right;">2.43</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   As of March 31, 2012, the total compensation cost related to unvested option awards not yet recognized is less than $1,000. The weighted average period over which it is expected to be recognized is approximately 1 year.   Restricted Stock   Certain employees have been awarded restricted Company Preferred Stock. The restricted stock vesting consists of milestone and time-based vesting. The following table summarizes restricted share activity for the three months ended March 31, 2012:   <table style="width: 80%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid;" colspan="2">   Number of Shares Restricted Series  A Preferred Stock(1) </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid;" colspan="2"> Weighted  Average Grant Date  Fair Value </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid;" colspan="2"> Aggregate Intrinsic Value </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="width: 45%;">Outstanding at December 31, 2011</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: right; width: 15%;">129,375</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;">$</td> <td style="text-align: right; width: 15%;">20.00</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: right; width: 15%;"> </td> <td style="width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-left: 9pt;">Granted</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 9pt;">Vested</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-bottom: 1pt; padding-left: 9pt;">Forfeited</td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">—</td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;">—</td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="text-align: right; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.25pt;">Outstanding at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;"> </td> <td style="border-bottom: black 2.25pt double; text-align: right;">129,375</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;">$</td> <td style="border-bottom: black 2.25pt double; text-align: right;">20.00</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;">$</td> <td style="border-bottom: black 2.25pt double; text-align: right;">7,762,500</td> <td style="padding-bottom: 2.5pt;"> </td> </tr> </table>   (1) The restricted Company Preferred Stock listed in the table above was granted in connection with the Exchange Transaction to certain executives as discussed above. Each share of Company Preferred Stock is convertible into 8.89 shares of the Company’s Common Stock, provided that such conversion right is subject to sufficient available authorized shares of the registrant’s common stock.   Total expense associated with restricted stock was $188,509 during the three months ended March 31, 2012.   Warrants   The following table summarizes warrant activity for the three months ended March 31, 2012:   <table style="width: 80%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid;" colspan="2">   Warrants </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid;" colspan="2"> Weighted- average exercise price </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Aggregate Intrinsic Value</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="width: 45%;">Outstanding at December 31, 2011</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: right; width: 15%;">2,118,768</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;">$</td> <td style="text-align: right; width: 15%;">4.62</td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: right; width: 15%;"> </td> <td style="width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="padding-left: 9pt;">Issued</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">2,163,555</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">2.31</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-left: 9pt;">Exercised</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;">—</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right;"> </td> <td> </td> </tr> <tr style="background-color: white; vertical-align: bottom; text-decoration: none;"> <td style="padding-bottom: 1pt; padding-left: 9pt; text-decoration: none;">Expired</td> <td style="padding-bottom: 1pt; text-decoration: none;"> </td> <td style="padding-bottom: 1pt; text-decoration: none;"> </td> <td style="border-bottom: black 1pt solid; text-decoration: none;"> </td> <td style="border-bottom: black 1pt solid; text-align: right; text-decoration: none;">(1,449</td> <td style="padding-bottom: 1pt; text-decoration: none;">)</td> <td style="padding-bottom: 1pt; text-decoration: none;"> </td> <td style="padding-bottom: 1pt; text-decoration: none;"></td> <td style="text-align: right; padding-bottom: 1pt; text-decoration: none;">2,812.50</td> <td style="padding-bottom: 1pt; text-decoration: none;"></td> <td style="padding-bottom: 1pt; text-decoration: none;"></td> <td style="padding-bottom: 1pt; text-decoration: none;"></td> <td style="text-align: right; padding-bottom: 1pt; text-decoration: none;"> </td> <td style="padding-bottom: 1pt; text-decoration: none;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="padding-bottom: 2.25pt;">Outstanding at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;"> </td> <td style="border-bottom: black 2.25pt double; text-align: right;">4,280,874</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;">$</td> <td style="border-bottom: black 2.25pt double; text-align: right;">2.50</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.25pt double;">$</td> <td style="border-bottom: black 2.25pt double; text-align: right;">—</td> <td style="padding-bottom: 2.5pt;"> </td> </tr> </table>   During the three months ended March 31, 2011, as part of the 2011 Equity PIPE, we issued warrants to purchase up to 1,545,396 shares of our Company Common Stock to investors in the 2011 Equity PIPE, none of which have been exercised as of March 31, 2012. The warrants have an exercise price of $2.25 per warrant share. In addition, we issued to the placement agent in the transaction warrants to purchase up to 618,159 shares of our Company Common Stock at an exercise price of $2.48 per warrant share, none of which have been exercised as of March 31, 2012.   Stock-Based Compensation   The fair value of stock options granted is estimated at the date of grant using the Black-Scholes pricing model. The expected term of options granted is derived from historical data and the expected vesting period. Expected volatility is based on the historical volatility of our common stock. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. We have assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. The Company did not grant any stock options during the three months ended March 31, 2012.   The following table summarizes stock-based compensation expense information about stock options and restricted stock for the three months ended March 31, 2012:   <table style="width: 80%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; text-indent: -14.2pt; padding-left: 14.2pt; width: 87%;">Stock-based compensation expense associated with restricted stock</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 10%;">188,509</td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -14.2pt; padding-left: 14.2pt;">Stock-based compensation expense associated with option grants</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -14.2pt; padding-left: 14.2pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">188,509</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>

NOTE 5 – NOTES PAYABLE   The following is a summary of notes payable:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="10">March 31, 2012</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="10">December 31, 2011</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Current portion, net</td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Non- current portion, net</td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Total</td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Current portion, net</td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Non- current portion, net</td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="padding-bottom: 1pt; font-weight: bold;" nowrap="nowrap"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2" nowrap="nowrap">Total</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; width: 40%;">Non-interest Bearing Note Payable, Net</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">—</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">—</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">—</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">200,000</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">—</td> <td style="text-align: left; width: 1%;"> </td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 7%;">200,000</td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left;">Convertible 5% Notes Payable</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">4,664,697</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">4,664,697</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">—</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">4,664,697</td> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">4,664,697</td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt;">ICON Convertible Note</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">677,778</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">677,778</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">677,778</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;"> </td> <td style="text-align: left; padding-bottom: 1pt;"> </td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">677,778</td> <td style="text-align: left; padding-bottom: 1pt;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt;">Total</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">677,778</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">5,342,475</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">877,778</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">5,542,475</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   We assumed the preceding notes payable as the result of the Exchange Transaction. Accordingly, a valuation was performed and these notes have been presented at their fair value on the date of the transaction.   Non-Interest Bearing Note Payable   In October 2009, Manhattan entered into a Settlement Agreement and Mutual Release with Swiss Pharma Contract LTD (“Swiss Pharma”) pursuant to which Manhattan agreed to pay Swiss Pharma $200,000 and issue to Swiss Pharma an interest free promissory note due on October 27, 2011 in the principal amount of $250,000 in full satisfaction of a September 5, 2008 arbitration award. In November 2011, Manhattan renegotiated the $250,000 promissory note due October 27, 2011 in which the amount of the promissory note was reduced to $200,000 and the maturity date was extended to February 15, 2012. This amount was paid on February 14, 2012 in full settlement of this note.   Convertible 5% Notes Payable   On March 8, 2010, Manhattan entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Ariston Pharmaceuticals, Inc., a Delaware corporation ("Ariston") and Ariston Merger Corp., a Delaware corporation and wholly-owned subsidiary of the Company (the "Merger Sub").  Pursuant to the terms and conditions set forth in the Merger Agreement, on March 8, 2010, the Merger Sub merged with and into Ariston (the "Merger"), with Ariston being the surviving corporation of the Merger.  As a result of the Merger, Ariston became a wholly-owned subsidiary of the Company.    The 5% Notes and accrued and unpaid interest thereon are convertible at the option of the holder into Common Stock at the conversion price of $1,125 per share.  Ariston agreed to make quarterly payments on the 5% Notes equal to 50% of the net product cash flow received from the exploitation or commercialization of Ariston’s product candidates, AST-726 and AST-915.  The Company has no obligations under the 5% Notes aside from a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and b) the conversion feature, discussed above. Interest accrues monthly, is added to principal on an annual basis, every March 8, and is payable at maturity.   In connection with the Exchange Transaction in December 2011, the Company performed a valuation of the assets and liabilities of Manhattan immediately prior to the transaction. The cumulative liability including accrued and unpaid interest of these notes was approximately $16,876,000 immediately prior to the Exchange Transaction, $16,883,000 at December 31, 2011, and $17,089,000 at March 31, 2012. As these notes payable are tied directly to net product cash flows derived from the preexisting products of the Company, this note and accrued interest was recorded at fair value as of the date of the Exchange Transaction. No payments have been made on these notes as of March 31, 2012. See Note 2 for further details.   ICON Convertible Note Payable   In connection with the merger with Ariston as discussed above, Ariston satisfied an account payable of $1,275,188 to ICON Clinical Research Limited (“ICON”) through the payment of $275,188 in cash and the issuance of a three-year 5% note payable (the “ICON Note”).  The principal was to be repaid in 36 monthly installments of $27,778 commencing in April 2010.  Interest was payable monthly in arrears.   On March 1, 2011, Ariston entered into an amended and restated convertible promissory note (the “Amended ICON Note”) with ICON. The principal terms of the Amended ICON Note are that monthly payments of principal and interest will be waived for the thirteen month period ended December 31, 2011 (the “Waiver Period”) in exchange for a single payment of $100,000 on March 31, 2011, an increase in the interest on the Amended ICON Note from 5% to 8% per annum during the Waiver Period and a balloon payment on January 31, 2012. The Amended ICON Note is convertible at the option of the holder into the Company’s Common Stock at the conversion price of $562.50 per share. During the three months ended March 31, 2012, the Company recorded $14,852 of interest expense on the Amended ICON Note. At March 31, 2012, the principal amount of the Amended ICON Note was $677,778, of which the entire balance has been classified as current, and interest payable on the Amended ICON Note was $76,793, and is reflected as notes payable, current portion, net, and interest payable, current portion, net, respectively, in the accompanying balance sheet as of March 31, 2012. This note is currently in default as the Company did not make the balloon payment due on January 31, 2012, or the monthly installment payments due in February 2012 and March 2012. The Company is currently attempting to negotiate a settlement or alternative arrangement in satisfaction of this note.

NOTE 6 – LICENSE AGREEMENTS   In April 2011, TG Bio, acquired from LFB Biotechnologies, a fully owned subsidiary of France based LFB S.A., an option (the “License Option”) for exclusive worldwide rights (except France/Belgium) to develop and market ublituximab (“TGTX-1101”), a monoclonal antibody that targets a specific epitope on the B-cell lymphocyte CD20 antigen. In exchange for the License Option, TG Bio issued 132,000 shares of its common stock to LFB.   On January 30, 2012, TG Bio exercised the License Option and entered into an exclusive license agreement with LFB Biotechnologies, GTC Biotherapeutics and LFB/GTC LLC, all wholly-owned subsidiaries of LFB Group, relating to the development of ublituximab (the “License Agreement”). Under the License Agreement, we have acquired the exclusive worldwide rights (exclusive of France/Belgium) for the development and commercialization of TGTX-1101 (ublituximab). To date, we have made no payments to LFB Group and LFB Group is eligible to receive payments of up to an aggregate of approximately $31.0 million upon our successful achievement of certain clinical development, regulatory and sales milestones, in addition to royalty payments on net sales of ublituximab. The license will terminate on a country by country basis upon the expiration of the last licensed patent right or 15 years after the first commercial sale of a product in such country, unless the agreement is earlier terminated.   In connection with the license agreement, our subsidiary TG Biologics issued 7,368,000 shares of its common stock to LFB, and the Company agreed to contribute $15 million, less applicable fees and expenses associated with the financing, to TG Bio to fund the development of ublituximab under the License Agreement in exchange for 7,500,000 shares of TG Bio common stock. The Company recognized approximately $16,578,000 of non-cash research and development expense during the three months ended March 31, 2012 in connection with the issuance of these shares. In addition, in connection with the issuance of 7,368,000 shares of TG Bio common stock, the Company and TG Bio provided LFB Group the option to, in its sole discretion, elect to convert all, and not less than all, of the shares of TG Bio common stock into 7,500,000 shares of the Company’s Common Stock. This option may be exercised by LFB Group at any time before May 14, 2012.   Furthermore, should LFB Group choose to exercise the option for Company Common Stock, the Board of Directors of the Company shall appoint an individual designated by LFB Group to serve as a director of the Company until the next annual meeting of the stockholders and until his or her successor has been duly elected. Thereafter the Board of Directors of the Company shall nominate a designee named by LFB Group for election at each annual meeting of the stockholders until such time as LFB Group owns less than 10% of the outstanding Company Common Stock.

NOTE 7 – RELATED PARTY TRANSACTIONS   On December 30, 2011, OPN Capital Markets (“OPNCM”) and its affiliated broker-dealer, National Securities Corporation (“NSC” and collectively with OPNCM, “National”), both affiliates of National Holdings Corporation (“National Holdings”), entered into a Placement Agency Agreement (the “PAA”) with the Company in connection with the initial closing of the 2011 Equity PIPE, offering of up to $25 million of stock and warrants of the Company.  Pursuant to the PAA, National acted as the Company’s placement agent for 2011 Equity PIPE.   Until April 2012, Michael S. Weiss was a director and Non-Executive Chairman of the Board of Directors of National Holdings.  He is also a stockholder of National Holdings and, when combined with his ownership indirectly through Opus and its affiliates, beneficially owns 23.6% of National Holdings, the parent company of NSC. Mr. Weiss disclaims such beneficiary ownership other than to the extent of his pecuniary interest. In addition, at the time, Opus and NSC were parties to a 50/50 joint venture that shared profits from OPNCM, the investment banking division of NSC that was responsible for managing the Offering. This joint venture was dissolved in April 2012.   The Company completed the initial closing of the 2011 Equity PIPE on December 30, 2011, issuing 4,929,523 shares of Common Stock at a price per share of $2.25 for total gross proceeds, before placement commissions and expenses, of $11,091,425 (the “2011 Equity PIPE”). Investors also received warrants to purchase 1,232,381 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years. The Company completed two additional closings of the 2011 Equity PIPE. These closings were held on January 31, 2012 and February 24, 2012. In these closings, the Company issued 695,428 shares of our Company Preferred Stock (“Preferred Stock”) at a price per share of $20.00 for total gross proceeds, before placement commissions and expenses, of $13,908,560. Each share of Company Preferred Stock is convertible into 8.89 shares of Common Stock provided that such conversion rights are subject to sufficient available authorized shares of Common Stock. Investors will also receive warrants to purchase 1,545,396 shares of Common Stock. The warrants have an exercise price of $2.25 per share and are exercisable for five years.    As placement agent, National received cash commissions equal to 10% of the gross proceeds of the 2011 Equity PIPE, five-year warrants to purchase shares of Company Preferred Stock equal to 10% of shares sold in the 2011 Equity PIPE, and a non-accountable expense allowance equal to two percent of the gross proceeds of the 2011 Equity PIPE for National’s expenses (not including up to $80,000 of National’s legal expenses and any blue sky fees, both of which the Company also reimbursed). In addition to acting as placement, National provided advisory services in connection with the Exchange Transaction and received an advisory fee of $150,000 for such services.

NOTE 8 – SUBSEQUENT EVENTS   On April 30, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation to change its name from Manhattan Pharmaceuticals, Inc. to TG Therapeutics, Inc. In conjunction with this change, the subsidiary formerly named TG Therapeutics, Inc. filed a Certificate of Amendment changing its name to TG Biologics, Inc.   On April 30, 2012, the Company effected a reverse split of its Common Stock at a ratio of 56.25 for 1, pursuant to a previously obtained shareholder authorization. All share amounts and per share prices in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the effect of our reverse stock split, on a fifty six and one quarter (56.25) for one (1) basis, unless otherwise indicated.  The exercise price for all stock options and warrants and the conversion price for convertible securities in the accompanying condensed consolidated financial statements have been adjusted to reflect the reverse stock split by multiplying the original exercise or conversion price by fifty six and one quarter (56.25).

NOTE 2 – FAIR VALUE MEASUREMENTS   We measure certain financial assets and liabilities at fair value on a recurring basis in the financial statements. The hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.5in;"></td> <td style="width: 0.25in;">·</td> <td style="text-align: left;">Level 1 – quoted prices in active markets for identical assets and liabilities;</td> </tr> </table>   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.5in;"></td> <td style="width: 0.25in;">·</td> <td style="text-align: left;">Level 2 – inputs other than Level 1 quoted prices that are directly or indirectly observable; and</td> </tr> </table>   <table style="margin-top: 0pt; width: 100%; font: 10pt times new roman, times, serif; margin-bottom: 0pt;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: top;"> <td style="width: 0.5in;"></td> <td style="width: 0.25in;">·</td> <td style="text-align: left;">Level 3 – unobservable inputs that are not corroborated by market data.</td> </tr> </table>   As of December 31, 2011 and March 31, 2012, the fair values of cash and cash equivalents, other current assets, notes and interest payable, current portion, accounts payable and accrued expenses, and interest payable, noncurrent approximate their carrying value.   Upon the merger between Manhattan and Ariston Pharmaceuticals, Inc. (“Ariston”) in March 2010, Ariston issued $15,452,793 of five-year 5% notes payable (the “5% Notes”) in satisfaction of several note payable issuances.  The 5% Notes and accrued and unpaid interest thereon are convertible at the option of the holder into Common Stock at the conversion price of $1,125 per share.  Ariston agreed to make quarterly payments on the 5% Notes equal to 50% of the net product cash flow received from the exploitation or commercialization of Ariston’s product candidates, AST-726 and AST-915.  The Company has no obligations under the 5% Notes aside from a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and b) the conversion feature, discussed above.   In connection with the Exchange Transaction in December 2011, the Company performed a valuation of the assets and liabilities of Manhattan immediately prior to the transaction. The cumulative liability including accrued and unpaid interest of these notes was approximately $16,876,000 immediately prior to the Exchange Transaction, $16,883,000 at December 31, 2011, and $17,089,000 at March 31, 2012. As these notes payable are tied directly to net product cash flows derived from the preexisting products of the Company, this note and accrued interest was recorded at fair value of $4,664,697 as of the date of the Exchange Transaction. No payments have been made on these notes as of March 31, 2012.   We elected the fair value option for valuing our the 5% Notes upon the completion of the reverse merger with TG Bio, as discussed above. The Company elected the fair value option in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments.   The valuation methods used to estimate the 5% Notes’ fair value was a discounted cash flow model, where the expected cash flows of AST-726 and AST-915 are discounted to the present using a yield that incorporates compensation for the probability of success in clinical development and marketing, among other factors. The discount rate used in this discounted cash flow model approximated 20% at December 31, 2011 and March 31, 2012. The assumptions, assessments and projections of future revenues are subject to uncertainties, are difficult to predict and require significant judgment. The use of different assumptions, applying different judgment to inherently subjective matters and changes in future market conditions could result in significantly different estimates of fair value and the differences could be material to our consolidated financial statements.   The following table provides the fair value measurements of applicable financial liabilities as of December 31, 2011 and March 31, 2012:   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="14">Financial liabilities at fair value  as of December 31, 2011</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 1</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 2</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 3</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Total</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: center;" colspan="2"> </td> <td> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; width: 48%;">5% Notes</td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">—</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">—</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">4,664,697</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">4,664,697</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 0.12in;">Totals</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   <table style="width: 100%; border-collapse: collapse; font: 10pt times new roman, times, serif;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="14">Financial liabilities at fair value  as of March 31, 2012</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 1</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 2</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Level 3</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> <td style="border-bottom: black 1pt solid; text-align: center; font-weight: bold;" colspan="2">Total</td> <td style="padding-bottom: 1pt; font-weight: bold;"> </td> </tr> <tr style="vertical-align: bottom;"> <td style="text-align: left;"> </td> <td> </td> <td style="text-align: center;" colspan="2"> </td> <td> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> <td style="font-weight: bold;"> </td> <td style="text-align: center; font-weight: bold;" colspan="2"> </td> <td style="font-weight: bold;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt; width: 48%;">5% Notes</td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">—</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">—</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">4,664,697</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> <td style="padding-bottom: 1pt; width: 1%;"> </td> <td style="border-bottom: black 1pt solid; text-align: left; width: 1%;">$</td> <td style="border-bottom: black 1pt solid; text-align: right; width: 10%;">4,664,697</td> <td style="text-align: left; padding-bottom: 1pt; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 0.12in;">Totals</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">—</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   The Level 3 amounts above represent the fair value of the 5% Notes and related accrued interest.   The following table summarizes the changes in Level 3 instruments during the three months ended March 31, 2012:   <table style="width: 70%; border-collapse: collapse; font: 10pt times new roman, times, serif; margin-left: 0.5in;" cellspacing="0" cellpadding="0"> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; width: 87%;">Fair value at December 31, 2011</td> <td style="width: 1%;"> </td> <td style="text-align: left; width: 1%;">$</td> <td style="text-align: right; width: 10%;">4,664,697</td> <td style="text-align: left; width: 1%;"> </td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left;">Interest accrued on face value of 5% Notes</td> <td> </td> <td style="text-align: left;"> </td> <td style="text-align: right;">205,297</td> <td style="text-align: left;"> </td> </tr> <tr style="background-color: #ccffcc; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 1pt;">Change in fair value of Level 3 liabilities</td> <td style="padding-bottom: 1pt;"> </td> <td style="border-bottom: black 1pt solid; text-align: left;"> </td> <td style="border-bottom: black 1pt solid; text-align: right;">(205,297</td> <td style="text-align: left; padding-bottom: 1pt;">)</td> </tr> <tr style="background-color: white; vertical-align: bottom;"> <td style="text-align: left; padding-bottom: 2.5pt;">Fair value at March 31, 2012</td> <td style="padding-bottom: 2.5pt;"> </td> <td style="border-bottom: black 2.5pt double; text-align: left;">$</td> <td style="border-bottom: black 2.5pt double; text-align: right;">4,664,697</td> <td style="text-align: left; padding-bottom: 2.5pt;"> </td> </tr> </table>   The change in the fair value of the Level 3 liabilities is reported in other (income) expense in the accompanying condensed consolidated statement of operations.

200000

12257309

20416

12181406

696

12180710

695428

16578000 16578000 20.00 16578000 16875000 163353 193636

-3668

-205297 -205297

11184

18281

9824682

-17396538

-7140448

-10256090