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Equity (Tables)

3 Months Ended

Mar. 31, 2013

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, 2013		13,614,135		$	1.42
Granted		2,645,000		$	5.04
Exercised		(170,099	)	$	1.37
Unvested options forfeited		(59,667	)	$	2.32
Vested options expired		(6,666	)	$	1.15
Outstanding at March 31, 2013		16,022,703		$	2.02

Vested at March 31, 2013		6,853,995		$	1.11		6.7	$	27,258,080
Vested or expected to vest at March 31, 2013		15,641,584		$	1.98		8.1	$	48,645,480

(a) Includes forfeiture adjusted unvested shares.

Stock Options Outstanding and Exercisable

Following is a summary of stock options outstanding and exercisable at March 31, 2013:

		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		2,319,500		5.2	$	0.67		2,319,500	$	0.67
$	0.87 - $1.35		7,002,003		8.3		1.19		3,092,797		1.19
$	1.40 - $2.29		1,851,700		6.7		1.63		1,441,698		1.66
$	2.33 - $3.75		2,179,500		9.5		2.75		-		-
$	3.85 - $5.80		2,670,000		9.9		5.03		-		-
			16,022,703		8.1	$	2.02		6,853,995	$	1.11

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:

	Three months ended March 31,
	2013			2012
Expected volatility		64.3	%		58.3	%
Expected life (in years)		6			6
Expected dividend yield		—			—
Risk-free interest rate		0.98%-1.86	%		0.88	%

Allocation of Share-based Compensation

For the three months ended March 31, 2013 and 2012, the Company recognized stock-based compensation as follows:

	Three Months Ended March 31,
	2013		2012
Cost of products sold	$	50,162	$	24,010
Research and development		75,978		71,520
Selling, general and administrative		858,652		405,455
	$	984,792	$	500,985

Summary of Warrants Outstanding

Following is a summary of the warrant activity for the three months ended March 31, 2013:

	Number of Warrants		Weighted- Average Exercise Price per Warrant
Warrants outstanding at January 1, 2013		3,129,168	$	1.04
Warrants exercised:
Contingent warrants related to private placement of common stock		62,500		0.01
Callable warrants		266,666		1.50
Other		456,000		1.15
Warrants outstanding at March 31, 2013		2,344,002	$	1.00

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

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- 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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