Note 5 - Convertible Notes

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Debt Disclosure [Text Block]

5. Convertible Notes

On September 4, 2013, the Company issued Convertible Notes with total aggregate proceeds of $4.3 million. The Convertible Notes accrued interest at 8% per annum and matured on or after March 31, 2014 upon written notice from a majority of the outstanding Convertible Note holders. On May 13, 2014, the Convertible Notes were converted to Series D Preferred Stock.

The Company recorded approximately $1.4 million as the fair value of the Convertible Notes’ combined embedded derivative liability upon issuance on September 4, 2013, with a corresponding amount recorded as debt discount. The debt discount and amounts recorded for issuance costs and embedded features were amortized to interest expense over the life of the Convertible Notes. Changes in the estimated fair value of the embedded features were recorded in earnings in the period in which they occurred.