Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity:

Stock-based compensation

During the six months ended June 30, 2015, a total of 271,614 options to purchase Common Stock with an aggregate fair market value of approximately $1.8 million were granted to Company employees and contractors. 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.

The Company’s stock-based compensation expense is allocated between research and development and selling, general and administrative as follows:

	Three months ended,		Six months ended,
Stock-based compensation expense	June 30, 2015	June 30, 2014	June 30, 2015	June 30, 2014
Research and Development	$1.1	$ —	$1.9	$ —
Selling, General and Administrative	$3.1	$0.4	$5.7	$2.5

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 six months ended June 30, 2015 follows:

Expected price volatility	72.82% -73.33%
Risk-free interest rate	1.44%
Weighted average expected life in years	6 years
Dividend yield	—

Option activity during the six months ended June 30, 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		271,614			10.23
Exercised		(75,050	)		4.04
Forfeitures		(114,237	)		12.57
Outstanding at June 30, 2015		3,278,427		$	5.44	$	10,769

As of June 30, 2015, options exercisable totaled 2,612,446. There was approximately $36.7 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. During the six months ended June 30, 2015, the remaining 284 outstanding warrants were exercised at a price of $3.12 per share.

Earnings Per Share

During the six months ended June 30, 2015 and 2014, outstanding stock options, RSUs, warrants and convertible preferred stock of 9.5 million and 9.7 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 six months ended June 30, 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. There were no grants during the three months ended June 30, 2015. 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 six months ended June 30, 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:
Executive officers		2,102,615			14.63
Directors		—			—
Vested		(712,677	)		14.23
Forfeitures		(65,853	)		11.69
Outstanding at June 30, 2015		4,173,161		$	10.25