Equity (Tables)

12 Months Ended

Dec. 31, 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, 2011		8,257,650		$	1.20
Granted		3,918,500		$	1.17
Exercised		(490,000	)	$	0.60
Unvested options forfeited		(217,252	)	$	1.10
Vested options expired		(1,135,315	)	$	1.70
Outstanding at December 31, 2011		10,333,583		$	1.17		7.1	$	1,457,218
Vested or expected to vest at December 31, 2011		10,283,583		$	1.17		5.7	$	1,395,223

Outstanding at January 1, 2012		10,333,583		$	1.17
Granted		5,307,500		$	1.90
Exercised		(843,862	)	$	1.25
Unvested options forfeited		(387,171	)	$	1.17
Vested options expired		(795,915	)	$	1.55
Outstanding at December 31, 2012		13,614,135		$	1.42		8.0	$	32,924,881
Vested or expected to vest at December 31, 2012		13,367,278		$	1.41		7.9	$	32,490,930

Summary of stock options outstanding and exercisable

The following is a summary of stock options outstanding for years ended December 31, 2012 and 2011, respectively:

	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 - $0.76		2,372,500		5.3	$	0.66		2,372,500	$	0.66
$0.87 - $1.35		7,048,668		8.6	$	1.15		1,674,638	$	1.15
$1.40 - $2.18		1,958,467		6.8	$	1.68		1,189,459	$	1.68
$2.29 - $3.47		2,177,000		9.7	$	-		-	$	-
$3.49 - $3.85		57,500		10.0	$	-		-	$	-
		13,614,135		8.0	$	1.42		5,236,597	$	1.05

				2011
	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		587,250		2.9	$	0.50		513,268	$	0.50
$0.65 - $1.00		2,967,500		5.7	$	0.79		2,730,224	$	0.79
$1.04 - $1.80		6,228,833		8.8	$	1.30		2,207,005	$	1.45
$2.40		550,000		0.7	$	2.40		550,000	$	2.40
		10,333,583		7.1	$	1.17		6,000,497	$	1.16

Unvested Stock Options Roll Forward

A summary of the status of the Company's unvested stock options as of December 31, 2012 and December 31, 2011 is presented below:


Unvested Stock Options	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at January 1, 2012		4,333,086		$	0.72
Granted		5,307,500		$	1.90
Cancelled/expired		(387,171	)	$	1.17
Vested		(875,877	)	$	1.05
Unvested at December 31, 2012		8,377,538		$	0.96

Unvested Stock Options	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at January 1, 2011		2,679,787		$	0.87
Granted		3,918,500		$	0.63
Cancelled/expired		(1,352,567	)	$	0.59
Vested		(912,634	)	$	0.81
Unvested at December 31, 2011		4,333,086		$	0.72

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:

	Year ended December 31,
	2012			2011
Expected volatility		45.7-64.3	%		57.3-58.1	%
Expected life (in years)		6			6
Expected dividend yield		—			—
Risk-free interest rate		.62%-1.77	%		0.86% - 2.24	%

Summary of warrants outstanding

Common Stock warrants activity and resulting balances for the years ended December 31, 2012 and 2011, are as follows:

	Number of Warrants			Weighted- Average Exercise Price per Warrant		Number of Contingent Warrants			Weighted- Average Exercise Price per Contingent Warrant
Warrants outstanding at January 1, 2011		6,003,924		$	1.21		1,252,990		$	0.01
Issued in connection with private placement of common stock		1,889,161			1.50		1,889,162			0.01
Issued in connection with convertible promissory notes		203,332			1.50		203,332			0.01
Issued in connection with line of credit with related party		—			—		650,000			0.01
Issued in connection with Senior Secured Promissory Notes		1,250,000			0.01		1,250,000			0.01
Placement agent		42,400			1.09		—			—
Warrants outstanding at December 31, 2011		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		(1,249,750	)		0.01		—			—
Contingent warrants related to private placement of common stock		(1,608,802	)		0.01		—			—
Contingent warrants related to line of credit with related party		(325,000	)		0.01		—			—
Callable warrants		(3,288,733	)		1.50		—			—
Other		(1,703,568	)		0.63		—			—
Warrants expired		(10,000	)		1.00		—			—
Warrants redeemed for cashless exercises		(14,789	)		0.53		—			—
Repurchased callable warrants (a)		(56,750	)		1.50		—			—
Warrants outstanding at December 31, 2012		3,129,168		$	1.04		—		$	—

(a)

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

- Definition

Tabular disclosure of option exercise prices, by grouped ranges, including the upper and lower limits of the price range, the number of shares under option, weighted average exercise price and remaining contractual option terms.

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- 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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