NOTES PAYABLE

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

NOTES PAYABLE

The following is a summary of notes payable:

	September 30, 2016						December 31, 2015
	Current portion, net		Non-current portion, net		Total		Current portion, net		Non-current portion, net		Total
Convertible 5% Notes Payable	$	117,126	$	-	$	117,126	$	211,549	$	-	$	211,549
Total	$	117,126	$	-	$	117,126	$	211,549	$	-	$	211,549

Convertible 5% Notes Payable

The 5% Notes and accrued and unpaid interest thereon are convertible at the option of the holder into common stock at the conversion price of $1,125 per share. We have no obligation under the 5% Notes aside from (a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature, discussed above. Interest accrues monthly, is added to principal on an annual basis, every March 8, and is payable at maturity, which was March 8, 2015 (see Note 4 for further details).

The cumulative liability including accrued and unpaid interest of these notes was approximately $17.0 million at September 30, 2016 and $19.9 million at December 31, 2015. No payments have been made on the 5% Notes as of September 30, 2016.

In December 2011, we elected the fair value option for valuing the 5% Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that market participants use in evaluating these financial instruments (see Note 4 for further details).