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Equity (Tables)

9 Months Ended

Sep. 30, 2013

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, 2013	13,614,135		$	1.42
Granted	3,368,000		5.19
Exercised	(1,610,426	)	0.94
Unvested options forfeited	(179,167	)	3.82
Vested options expired	(52,999	)	1.11
Outstanding at September 30, 2013	15,139,543		2.28		7.9	$	31,918,608
Vested at September 30, 2013	6,482,824		1.25		6.6	$	18,911,451
Vested or expected to vest at September 30, 2013 (a)	14,824,937		$	2.25	7.9	$	31,649,823


(a)	Includes forfeiture adjusted unvested shares.

Stock Options Outstanding and Exercisable

Following is a summary of stock options outstanding and exercisable at September 30, 2013:



	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 - $0.76	1,340,935	3.9	$	0.65	1,340,935	$	0.65
$0.87 - $1.35	6,656,908	7.9	1.20		3,336,870	1.19
$1.40 - $2.29	1,686,700	6.4	1.62		1,436,698	1.65
$2.33 - $3.75	2,159,500	9.0	2.75		368,321	2.52
$3.95 - $6.02	3,035,000	9.5	5.07		—	—
$6.11 - $6.75	260,500	9.7	6.49		—	—
	15,139,543	7.9	$	2.28	6,482,824	$	1.25

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:



	Nine months ended September 30,
	2013	2012
Expected volatility	61.41 - 64.56%	45.75 - 64.3%
Expected life (in years)	6	6
Expected dividend yield	—	—
Risk-free interest rate	0.85 -1.88%	0.62 - 1.62%

Allocation of Share-based Compensation

For the three and nine months ended September 30, 2013 and 2012, the Company recognized stock-based compensation as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of sales	$	75,287	$	11,643	$	198,119	$	65,132
Research and development	110,694		70,754		309,461		217,885
Selling, general and administrative	1,481,785		587,072		3,647,425		1,472,652
	$	1,667,766	$	669,469	$	4,155,005	$	1,755,669

Summary of Warrants Outstanding

Following is a summary of the warrant activity for the nine months ended September 30, 2013:



	Number of Warrants		Weighted- Average Exercise Price per Warrant
Warrants outstanding at January 1, 2013	3,129,168		$	1.04
Warrants exercised:
Contingent warrants related to private placement of common stock	(62,500	)	0.01
Callable warrants	(266,666	)	1.50
Other	(876,333	)	1.23
Warrants outstanding at September 30, 2013	1,923,669		$	0.93

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

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- Definition

Tabular disclosure of option exercise prices, by grouped ranges, including the upper and lower limits of the price range, the number of shares under option, weighted average exercise price and remaining contractual option terms.

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- 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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