SHAREHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2012

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

6. SHAREHOLDERS’ EQUITY

Common Stock Issuances

Nine months ended March 31, 2012

For Cash:

On February 2, 2012, we closed the sale of 10,000,000 shares of our common stock and warrants to purchase 10,000,000 shares of our common stock in a registered direct public offering. The net proceeds to us from the offering were approximately $28,173,000. The warrants have an exercise price of $3.50 per share, become exercisable in August 2012, and expire in April 2013.

For exercise of options:

During the nine months ended March 31, 2012, 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 nine months ended March 31, 2012, 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 nine months ended March 31, 2012, we granted options to purchase 2,350,000 shares under our 2010 Equity Incentive Plan (the “2010 Plan”).  In July 2011, our Board of Directors approved an increase in the shares authorized under the 2010 Plan from 5,000,000 to 10,000,000, which was approved by stockholders in February 2012. We incurred $5,126,000 in compensation expense associated with employee stock options classified as equity awards during the nine months ended March 31, 2012 of which $3,682,000 was recorded as general and administrative expense in the current period and $1,444,000 was capitalized in the full cost pool.

Nine months ended March 31, 2011

For cash:

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. On March 25, 2011, we entered into an underwriting agreement providing for the offer and sale in a firm commitment underwritten offering of 25,000,000 shares of our common stock at a price to the public of $5.00 per share ($4.75 per share net of underwriting discount but before deducting transaction expenses). In addition, we granted to the Underwriter a 45-day option to purchase up to 3,750,000 additional shares of common stock from us at the offering price, less underwriting discounts and commissions. On March 25, 2011, the Underwriter exercised its option with respect to all 3,750,000 shares.

Closing of the sale of the shares of common stock, including the 3,750,000 shares purchased pursuant to exercise of the option by the Underwriter, was held on March 30, 2011.  The Company received net proceeds, after underwriting discounts and commissions, and other transaction expenses, of approximately $136.2 million.

For exercise of options:

During the nine months ended March 31, 2011, 603,613 options were exercised for total gross proceeds of $561,681. The options were exercised at prices ranging from $0.24 to $2.00.

For exercise of warrants:

During the nine months ended March 31, 2011, 6,164,213 warrants were exercised for total gross proceeds of $7,709,290. The warrants were exercised at prices ranging from $0.98 to $1.58. Additionally, during the nine months ended March 31, 2011, 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.

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 nine months ended March 31, 2011, we granted options to purchase 1,691,000 shares of common stock to our employees and directors. The compensation expense associated with employee stock options during the nine months ended March 31, 2011 was $1,812,000.