In June 2010, we entered into a Securities Exchange Agreement with Platinum Montaur Life Sciences, LLC (Montaur), pursuant to which Montaur exchanged their 10% Series A Convertible Senior Secured Promissory Note with an outstanding principal amount of $7,000,000, their 10% Series B Convertible Senior Secured Promissory Note with an outstanding principal amount of $3,000,000, and their 3,000 shares of 8% Series A Cumulative Convertible Preferred Stock for 10,000 shares of Series B Convertible Preferred Stock (the Series B Preferred Stock), convertible into 32,700,000 shares of common stock. The Series B Preferred Stock is convertible at the option of Montaur and carries no dividend requirement. In the event of the liquidation of the Company, the holders of shares of the Series B Preferred Stock have preference over the common stock. After payment of the full liquidation preference amount to which each holder is entitled, such holders of shares of Series B Preferred Stock will not be entitled to any further participation as such in any distribution of the assets of the Company. As consideration for the exchange, the Company issued additional Series B Preferred Stock which is convertible into 1.3 million shares of common stock.

Also in June 2010, we entered into a Securities Exchange Agreement with David C. Bupp, then our President and CEO, and certain members of his family (the Bupp Investors), pursuant to which the Bupp Investors exchanged their 10% Convertible Secured Promissory Note with an outstanding principal amount of $1,000,000 for 1,000 shares of Series C Convertible Preferred Stock (the Series C Preferred Stock), convertible into 3,226,000 shares of common stock. The Series C Preferred Stock had a 10% dividend rate and participated equally with our common stock in liquidation proceeds based upon the number of common shares into which the Series C Preferred Stock was convertible. The exchange of the Montaur Notes, the Series A Preferred Stock and the Bupp Note were treated as extinguishments for accounting purposes. As a result, the Company recognized a loss on extinguishment of debt of $41.7 million, including the write-off of $966,000 in put option derivative liabilities, and recorded a deemed dividend of $8.0 million during the second quarter of 2010. As a result of these exchange transactions, all security interests in the Company's assets held by Montaur and the Bupp Investors were extinguished.

In May 2011, Montaur converted 917 shares of their Series B Preferred Stock into 2,998,590 shares of our common stock under the terms of the Series B Preferred Stock. In July 2012, Montaur converted 3,063 shares of their Series B Preferred Stock into 10,016,010 shares of our common stock under the terms of the Series B Preferred Stock. In November 2012, we entered into a Securities Exchange Agreement with Platinum Partners Value Arbitrage Fund, L.P. (Platinum), an affiliate of Montaur, pursuant to which Platinum exchanged 3,001,860 shares of our common stock owned by Platinum for 918 shares of our Series B Preferred Stock. As of December 31, 2012, there are 6,938 shares of Series B Preferred Stock outstanding which are convertible into 22,687,260 shares of our common stock.

In December 2012, we entered into a Waiver Agreement (the Waiver) pursuant to which Montaur and Platinum, as the sole holders of the Series B Preferred Stock, agreed to irrevocably waive the provisions set forth in the certificate of designations for the Series B Preferred Stock (the Certificate) which provided that all outstanding shares of Series B Preferred Stock would automatically convert into shares of common stock on December 31, 2012. The Waiver will remain in effect until December 31, 2013, upon which date all outstanding shares of Series B Preferred Stock will automatically convert into common stock pursuant to the terms of the Certificate. In addition, we amended the terms of Montaur's Series X warrant to extend the expiration date from April 16, 2013 to December 31, 2013. Also in December 2012, the Series C Preferred Stock held by the Bupp Investors automatically converted into 3,226,000 shares of our common stock under the terms of the Series C Preferred Stock.

During the year ended December 31, 2010, we recorded interest expense of $16,000 related to amortization of the debt discounts and deferred financing costs related to our convertible securities.