Note 6 - Debt

Term Loan and Revolving Line of Credit

On March 30, 2012, the Company entered into a Loan Agreement with GE Capital. The Loan Agreement provided for a senior secured debt facility including a $2.5 million term loan and a revolving line of credit of up to $5.0 million based on our outstanding qualified accounts receivable.

On September 3, 2015, we satisfied in full our remaining obligations under the GE Capital Loan Agreement. The Loan Agreement was scheduled to terminate on September 29, 2015. The termination of the Loan Agreement released PharmAthene from further obligations under the Loan Agreement, which were collateralized by a security interest in substantially all of our assets.

The final payment fee was accrued and expensed over the term of the Loan Agreement, using the effective interest method. Financing costs incurred in connection with this agreement were also amortized over the term of the agreement using the effective interest method.

In connection with the Loan Agreement, in 2012 we issued to GE Capital a warrant to purchase 46,584 shares of the Company’s common stock at an exercise price of $1.61 per share. The warrant, which expires in March 2022, was not affected by the termination. The warrant was exercisable immediately and subject to customary and standard anti-dilution adjustments. The warrant is classified in equity and, as a result, the fair value of the warrant was charged to additional paid-in-capital resulting in a debt discount at the date of issuance. The debt discount was amortized over the term of the Loan Agreement using the effective interest method.