Note 3—Equity

Private Placement

In January 2011, the Company placed 17,858 shares of common stock (in the form of CDIs) for proceeds, net of transaction costs, of $99.

In July 2011, the Company placed 572,222 shares of common stock (in the form of CDIs) for proceeds, net of transaction costs, of $4,597.

In September 2011, the Company placed 349,444 shares of common stock (in the form of CDIs) for proceeds, net of transaction costs, of $2,838.

In February 2012, the Company placed 256,875 shares of common stock (in the form of CDIs) for proceeds, net of transaction costs, of $2,061.

Public Offering

On August 15, 2012 we sold 2,875,000 shares of common stock in a public offering at a price of $7.00 per share and on August 20, 2012, we sold 94,800 shares of common stock upon the exercise of an over-allotment option by our underwriters, at a price of $7.00 per share. Proceeds in the public offering and exercise of the over-allotment option, net of transaction costs, were $18,552 in the aggregate.

Stock Options

The Company recognized share-based compensation expense related to stock options and grants of common stock to employees, directors and consultants of $1,248 and $939 during the years ended December 31, 2012 and 2011, respectively. The following table summarizes the stock-based compensation expense which was recognized in the Consolidated Statements of Operations for the years ended December 31, 2012 and 2011:

	December 31, 2012		December 31, 2011
Selling, general and administrative	$	806	$	621
Research and development	442		318
Total	$	1,248	$	939

As of December 31, 2012 and December 31, 2011, the total compensation cost related to all non-vested awards not yet recognized was $4,099 and $4,582, respectively. This amount is expected to be recognized over the remaining weighted-average period of 8.61 years as of December 31, 2012 and 9.21 years as of December 31, 2011.

The Company has granted stock options to certain employees and directors under the Amended and Restated 2002 Stock Plan and the 2011 Equity Incentive Plan (collectively, the “Plans”). The Plans are designed to assist in the motivation and retention of employees and to recognize the importance of employees to the long-term performance and success of the Company. The Company has also granted stock options to certain consultants outside of the Plans. The majority of the options to purchase common stock vest on the anniversary of the date of grant, which ranges from one to four years. Additionally, certain stock options vest upon the closing price of the Company’s common stock reaching certain minimum levels, as defined in the agreements. Finally, certain other stock options vest upon the meeting of certain Company milestones, such as the signing of specific agreements and the completion of the Company’s anticipated listing on a U.S. stock exchange. As of December 31, 2012, the Company expects that all such market and performance conditions will be met. Share-based compensation expense related to these awards is recognized on a straight-line basis over the related vesting term. It is the Company’s policy to issue new shares upon the exercise of options.

The following is a summary of the Plan and non-Plan stock option activity during the year ended December 31, 2012 and 2011.

	Options Outstanding	Weighted Average Exercise Price		Remaining Average Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2010	126,698	$	28.00	7.26	$	819
2011 Grants	794,926	7.64
2011 Exercises	1,560	6.58
2011 Forfeitures/expirations	33,231	13.02
Outstanding, December 31, 2011	886,833	10.05		9.21	62,674
Exercisable at December 31, 2011	184,296	18.74		7.64	24,013
2012 Grants	284,875	6.63
2012 Exercises	3,990	3.10
2012 Forfeitures/expirations	54,473	7.65
Outstanding, December 31, 2012	1,113,244	9.47		8.61	1,163
Exercisable at December 31, 2012	418,439	$	13.08	7.76	$	1,163

The aggregate intrinsic value is defined as the difference between the market value of the Company’s common stock (based on the trading price of the Company’s CDIs on ASX) as of the end of the period and the exercise price of the in-the-money stock options. The total intrinsic value of stock options exercised during the years ended December 31, 2012 and 2011 was $14 and $3, respectively. Of the 694,805 non-vested options at December 31, 2012, none were held by consultants. Total cash proceeds from exercised options were $12 and $10 for the years ended December 31, 2012 and 2011, respectively.

The weighted-average fair value of stock options granted during the years ended December 31, 2012 and 2011 was $4.97 and $6.62, respectively.

The fair value of each stock option is estimated at the grant date using the Black-Scholes option pricing model. The Company has not historically paid dividends to its stockholders, and currently does not anticipate paying any cash dividends in the foreseeable future. As a result the Company has assumed a dividend yield of 0%. The 2011 risk free interest rate is based upon the rates of U.S Treasury bins with a term equal to the expected term of the option. The expected term of the stock options to purchase common stock is based upon the outstanding contractual expected life of the stock option on the date of grant. The Company used the following weighted-average assumptions in calculating the fair value of options granted during the years ended December 31, 2012 and 2011.

	Year ended December 31
	2012		2011
Expected dividend yield	0	%	0	%
Risk-free interest rate	1.52	%	1.43	%
Expected volatility	101	%	100	%
Expected life (in years)	5.0		6.5

Warrants

Warrants to purchase 1,663,253 and 1,496,032 shares of common stock were outstanding at December 31, 2012 and 2011, respectively.

As part of the private placement completed during 2011, the Company issued (i) 10,623 warrants to purchase common stock at an exercise price of AU$8.00 per share, with a stated life of five years, and (ii) 276,501 warrants to purchase common stock at an exercise price of AU$11.20 per share, with a stated life of four years.

As part of the private placement completed during 2012, the Company issued (i) 8,553 warrants to purchase common stock at an exercise price of AU$8.00 per share, with a stated life of five years, and (ii) 77,063 warrants to purchase common stock at an exercise price of AU$11.20 per share, with a stated life of four years.

On September 7, 2012, we issued 100,000 non-forfeitable and fully exercisable warrants to purchase common stock, having an exercise price of $7.00 per share and a term of five years, pursuant to a professional services agreement extending through June 2013. These warrants were determined to have a fair value of $519, of which $280 was charged to expense during 2012. These warrants were issued pursuant to the terms and conditions of the Company’s Amended and Restated 2011 Equity Incentive Plan.

During the years ended December 31, 2012 and 2011, 32,396 and 14,879 warrants were exercised at a price of AU$6.40 and AU$6.40 for total proceeds of $212 and $99, respectively.