NOTE 4 - EQUITY:

During the nine months ended September 30, 2014, the Company granted stock options to employees and directors to purchase a total of 1,826,515 shares of the Company's common stock. The options have exercise prices ranging from $2.38-$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 63.7%-67.9%; and risk-free interest rate of 1.64%-2.18%.

The fair value of the above options, using the Black-Scholes option-pricing model, was approximately $3.3 million.

During the nine months ended September 30, 2014, the Company granted a total of 652,757 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 $1.9 million.

During the three months ended September 30, 2014, the Company sold 948,000 shares of its common stock pursuant to its at-the-market (ATM) issuance sales agreement with MLV & Co. LLC. These sales resulted in net proceeds to the Company of approximately $2.2 million.