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Equity (Tables)

6 Months Ended

Jun. 30, 2012

Activity with respect to the stock options is summarized as follows:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		10,333,583		$	1.17
Granted		2,948,000		$	1.26
Exercised		(324,750	)	$	0.98
Forfeited or cancelled/expired		(162,583	)	$	1.11
Outstanding at June 30, 2012		12,794,250		$	1.20		7.3	$	11,728,020

Vested or expected to vest at June 30, 2012		7,106,810		$	1.17		5.9	$	6,763,936

A summary of the status of the Company's unvested stock options follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at January 1, 2012		4,333,086		$	0.72
Granted		2,948,000		$	0.67
Cancelled/expired		(162,583	)	$	0.68
Vested		(1,431,063	)	$	0.74
Unvested at June 30, 2012		5,687,440		$	0.69

Summary of stock options outstanding and exercisable

Following is a summary of stock options outstanding and exercisable at June 30, 2012:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number outstanding		Weighted- Average Remaining Contractual Term (in years)		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$	0.50		566,250		2.4	$	0.50		554,223	$	0.50
$	0.65 - $1.00		2,717,500		5.6	$	0.78		2,624,179	$	0.78
$	1.04 - $1.80		8,960,500		8.7	$	1.29		3,378,408	$	1.39
$	2.40		550,000		0.2	$	2.40		550,000	$	2.40
			12,794,250		7.3	$	1.20		7,106,810	$	1.17

Fair value of options valuation assumptions

The assumptions used in calculating the fair value of options using the Black-Scholes-Merton option-pricing model are set forth in the following table:

	Six months ended June 30,
	2012			2011
Expected volatility		58.31 - 59.04	%		57.3 - 57.6	%
Expected life (in years)		6			6
Expected dividend yield		-			-
Risk-free interest rate		0.62% - 1.22	%		1.48% - 2.24	%

Summary of warrants outstanding

Following is a summary of warrants outstanding at June 30, 2012:

	Number of Warrants			Weighted- Average Exercise Price per Warrant		Number of Contingent Warrants			Weighted- Average Exercise Price per Contingent Warrant
Warrants outstanding at January 1, 2012		9,388,817		$	1.00		5,245,484		$	0.01
Issued in connection with private placement of common stock		1,672,743		$	0.01		(1,672,743	)	$	0.01
Issued in connection with line of credit with related party		325,000		$	0.01		(325,000	)	$	0.01
Warrants exercised		(3,621,052	)	$	0.09		-			-
Warrants redeemed for cashless exercises		(1,691	)	$	0.09		-			-
Warrants outstanding at June 30, 2012		7,763,817		$	1.17		3,247,741		$	0.01

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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