Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity:

Stock-based compensation

During the three months ended March 31, 2015, a total of 87,693 options to purchase Common Stock with an aggregate fair market value of approximately $0.8 million were granted to Company employees. The options granted have a term of 10 years from the grant date and vest ratably over a three year period. The fair value of each option is amortized as compensation expense evenly through the vesting period. During the three months ended March 31, 2015, stock-based compensation expense was recorded as $0.8 million in research and development and $2.7 million in selling, general and administrative, in the accompanying 2015 condensed consolidated statement of operations. The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on implied volatilities from historical volatility of the Common Stock, and other factors estimated over the expected term of the options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The weighted average for key assumptions used in determining the fair value of options granted during the three months ended March 31, 2015 follows:

Expected price volatility	73.29	%
Risk-free interest rate	1.37	%
Weighted average expected life in years	6 years
Dividend yield	—

Option activity during the three months ended March 31, 2015 was as follows:

	Number of Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding at January 1, 2015		3,196,100		$	4.32
Granted in 2015:
Officers and Directors		—			—
Others		87,693			13.17
Exercised		(38,454	)		3.41
Forfeitures		(71,237	)		10.22
Outstanding at March 31, 2015		3,174,102		$	5.39	$	18,025

As of March 31, 2015, options exercisable totaled 2,633,424. There was approximately $40.3 million of unrecognized compensation cost related to non-vested share-based compensation awards, including options and restricted stock units (“RSUs”) granted. These costs will be expensed through 2018.

Warrants

The Company has granted warrants to purchase shares of Common Stock. Warrants may be granted to affiliates in connection with certain agreements. Warrants outstanding at March 31, 2015 totaled 284, with an exercise price of $3.12 per share.

Earnings Per Share

During the three months ended March 31, 2015 and 2014, outstanding stock options, RSUs, warrants and convertible preferred stock of 9.4 million and 10.7 million, respectively, were not included in the computation of diluted earnings per share, because to do so would have had an antidilutive effect.

Recovery of Stockholder Short Swing Profit

In February 2015, an executive officer of the Company paid a total of approximately $0.006 million to the Company, representing the disgorgement of short swing profits under Section 16(b) under the Exchange Act. The amount was recorded as additional paid-in capital.

Restricted Stock Units

During the three months ended March 31, 2015, approximately 2.1 million RSUs were granted to members of the Company’s senior management, with a fair market value of approximately $30.8 million. The fair value of restricted units is determined using quoted market prices of the Common Stock and the number of shares expected to vest. These RSUs were issued under the Company’s 2011 Equity Incentive Plan, as amended, and vest in equal installments over three years.

Restricted stock activity during the three months ended March 31, 2015 was as follows:

	Number of Restricted Shares			Weighted Average Fair Market Value Per RSU
Outstanding at January 1, 2015		2,849,076		$	6.08
Granted in 2015:
Executive officers		2,102,615			14.63
Directors		—			—
Vested		(694,269	)		14.39
Forfeitures		(65,853	)		11.69
Outstanding at March 31, 2015		4,191,569		$	10.12