NOTE 3- EQUITY:

During the three months ended March 31, 2014, the Company granted stock options to employees and directors to purchase a total of 1,286,932 shares of the Company's common stock. The options have exercise prices ranging from $2.97-$3.23 per share, which were the fair market value of the Company's common stock on the date of each respective grant. The options are subject to a three-year vesting period, with one-third of such awards vesting each year.

In calculating the fair value of the above options the Company used the following assumptions: dividend yield of 0% and expected term of 5.5-6.5 years; expected volatility of 66.8%-67.9%; and risk-free interest rate of 1.64%-2.01%.

The fair value of the above options, using the Black-Scholes option-pricing model, was approximately $2.4 million.

During the three months ended March 31, 2014, the Company granted a total of 445,240 restricted shares of the Company's common stock to employees. The shares are subject to a three-year vesting period, with one-third of such awards vesting each year.

The fair value of the above restricted shares was approximately $1.4 million.