Equity (Tables)

9 Months Ended

Sep. 30, 2012

Activity with respect to the stock options is summarized as follows:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		10,333,583		$	1.17
Granted		4,203,000		$	1.61
Exercised		(718,998	)	$	1.23
Unvested options forfeited		(225,504	)	$	1.17
Vested options expired		(949,248	)	$	1.55
Outstanding at September 30, 2012		12,642,833		$	1.28		8.0	$	21,096,473

Vested at September 30, 2012		4,953,133		$	1.06		6.4	$	9,362,856
Vested and expected to vest at September 30, 2012 (a)		12,430,387		$	1.27		8.0	$	20,823,954

(a) Includes forfeiture adjusted unvested shares.

Summary of stock options outstanding and exercisable

Following is a summary of stock options outstanding and exercisable at September 30, 2012:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number outstanding		Weighted- Average Remaining Contractual Term (in years)		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$	0.50		505,000		2.2	$	0.50		505,000	$	0.50
$	0.65 - $1.00		2,097,500		6.6	$	0.72		1,946,666	$	0.72
$	1.04 - $1.80		8,840,333		8.5	$	1.29		2,471,467	$	1.43
$	1.99 - $2.84		1,200,000		9.6	$	2.50		30,000	$	2.40
			12,642,833		8.0	$	1.28		4,953,133	$	1.06

Fair value of options valuation assumptions

The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table:

	Nine months ended September 30,
	2012	2011
Expected volatility	45.75 - 64.3%	57.3 - 57.8%
Expected life (in years)	6	6
Expected dividend yield	—	—
Risk-free interest rate	0.62% - 1.62%	0.93% - 2.24%

Summary of warrants outstanding

Following is a summary of warrants outstanding at September 30, 2012:

	Number of Warrants				Weighted- Average Exercise Price per Warrant		Number of Contingent Warrants			Weighted- Average Exercise Price per ContingentWarrant
Warrants outstanding at January 1, 2012		9,388,817			$	1.00		5,245,484		$	0.01
Warrants issued:
Vested contingent warrants related to private placement of common stock		1,672,743			$	0.01		(1,672,743	)	$	0.01
Vested contingent warrants related to line of credit with related party		325,000			$	0.01		(325,000	)	$	0.01
Contingent warrants voided		—				—		(3,247,741	)	$	0.01
Warrants exercised:
Contingent warrants related to convertible note		(1,329,687	)		$	0.01		—			—
Contingent warrants related to private placement of common stock		(1,476,365	)		$	0.01		—			—
Contingent warrants related to line of credit with related party		(325,000	)		$	0.01		—			—
Callable warrants		(3,288,733	)		$	1.50
Other		(1,653,568	)		$	0.60
Warrants redeemed for cashless exercises		(14,789	)		$	0.60		—			—
Repurchased callable warrants		(56,750	)	(a)	$	1.50		—			—
Warrants outstanding at September 30, 2012		3,241,668			$	1.04		—

(a) The Company repurchased the callable warrants at $0.01 per share.

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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