SHAREHOLDERS' EQUITY

6 Months Ended

Dec. 31, 2011

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

6. SHAREHOLDERS’ EQUITY

Common Stock Issuances

Six months ended December 31, 2011

For exercise of options:

During the six months ended December 31, 2011, 683,333 options were exercised for cash at exercise prices ranging from $0.31 to $2.00 for total gross proceeds of $608,000.

For exercise of warrants:

During the six months ended December 31, 2011, we issued 340,208 shares of common stock upon the cashless exercise of warrants to purchase 430,000 shares of common stock.

Employee stock options

During the six months ended December 31, 2011, we granted options to purchase 1,069,480 shares under the long term incentive plan.  In July 2011, our Board of Directors approved an increase in the shares authorized under the long-term incentive plan from 5,000,000 to 10,000,000, which increase is subject to stockholder approval. We subsequently granted options to purchase an aggregate of 1,103,520 additional shares to various employees, with provisions for vesting over a two year period.  Because stockholder approval has not been obtained, we have classified these awards as liability awards on our balance sheet.  We incurred $3,451,000 in compensation expense associated with employee stock options classified as equity awards during the six months ended December 31, 2011 of which $2,424,000 was recorded as general and administrative expense in the current period and $1,027,000 was capitalized in the full cost pool. Additionally, we incurred $215,000 in compensation expense associated with employee stock options classified as liability awards during the six months ended December 31, 2011.

Six months ended December 31, 2010

For exercise of options:

During the six months ended December 31, 2010, 291,849 options were exercised for total gross proceeds of $215,550. The options were exercised at prices ranging from $0.31 to $2.00.

For exercise of warrants:

During the six months ended December 31, 2010, 5,109,378 warrants were exercised for total gross proceeds of $6,169,150. The warrants were exercised at prices ranging from $0.98 to $1.58. Additionally, during the six months ended December 31, 2010, we issued 384,848 shares of common stock to YA Global upon the cashless exercise of warrants to purchase 702,222 shares of common stock.

Private placement of common stock:

On November 3, 2010, we entered into a Stock Purchase Agreement with two institutional funds under management of affiliates of BlackRock (collectively, the “Investors”) pursuant to which the Investors agreed to purchase an aggregate of 15,000,000 shares of our Common Stock at a purchase price of $2.00 per share in a private placement. At closing, we received approximately $29.9 million, net of offering costs.

Issuance of common stock in Series A settlement:

On December 30, 2010, we entered into a litigation settlement whereby we issued 239,437 shares of our common stock.

Employee stock options

During the six months ended December 31, 2010, we granted options to purchase 771,000 shares of common stock to our employees and directors. The compensation expense associated with employee stock options during the six months ended December 31, 2010 was $1,168,000.