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Notes Payable
12 Months Ended
Dec. 31, 2013
Notes Payable [Abstract]  
Notes Payable

9.

Notes Payable


On December 14, 2011, the Company entered into a loan agreement with the North Carolina Biotechnology Center (the "Center") for an amount up to $250,000 to be used by the Company to develop certain of its proprietary technology and processes as defined by the loan agreement during a one year period ended December 14, 2012. The principal of the loan, plus accrued interest, was due in full on December 14, 2014, with annual installments of 5% of the outstanding balance due on December 14, 2012 and 2013. The loan agreement accrues interest at 4.25% per annum beginning on the day of the first advance. As of December 31, 2011, the outstanding balance was $0 and no draw downs occurred during fiscal year 2011. During the year ended December 31, 2012, the Company drew down $225,000 of the loan and then repaid the principal balance, including accrued interest, in full in August 2012. The loan agreement was canceled upon the repayment.


 


In conjunction with this loan agreement, the Company issued warrants to purchase 29,762 shares of Series A Preferred Stock with an exercise price of $4.83 per share and an expiration date of December 13, 2021. Per the terms of the warrant agreement, the exercise price of $4.83 per share is subject to adjustment if at any time subsequent to the date of the warrant agreement, Preferred Series A shares are issued at a price less than $4.83 per share. The warrants converted from preferred stock warrants into warrants to purchase common stock upon the completion of the initial public offering in July 2013 and the number of shares were adjusted for the 1-for-2.3 reverse stock split. However, since the warrants still have an anti-dilution provision, they remain liabilities and are subject to re-measurement at each balance sheet date. The total number of warrants post the 1-for-2.3 reverse stock split is 12,940.


On August 7, 2012, the Company entered into a loan and security agreement ("the Loan and Security Agreement") with a bank. The terms of the agreement provide for a $1,000,000 term loan ("Tranche A") to be available to the Company as of the date of the Loan and Security Agreement. The Tranche A term loan may be increased to $2,775,000 upon the Company receiving grant funding totaling at least $16,000,000. The Tranche A term loan accrues interest monthly at an interest rate of 3% plus Prime or 6% per annum, whichever is greater. The Tranche A term loan principal balance, along with any accrued interest, is to be paid in thirty-six equal monthly installments beginning September 7, 2013 and ending August 7, 2016. As of December 31, 2012, the Company's outstanding principal balance on the Tranche A term loan was $500,000.


Additionally, the Loan and Security Agreement provides for a term loan in an aggregate principal amount not to exceed $225,000 ("Term Loan B"). Payments of 5% of the outstanding principal balance, plus accrued interest are each due on August 2013 and 2014, with the remaining principal balance, plus all accrued interest, due December 14, 2014. The term loan accrues interest monthly at 4.25% per annum. Proceeds from the $225,000 Term Loan B were used to pay in full the principal balance of the loan with the Center as noted above. On August 27, 2013, the Company repaid the entire outstanding balance on the Tranche A term loan and the Term Loan B with the bank, in the amount of $725,000 and the loan agreement was terminated.


On January 10, 2013, the Company signed a Second Amendment to its Loan and Security Agreement which granted an extension of credit in the form of a Non-Formula Revolving Line ("the Non-Formula Line") for an amount up to $200,000. This increase in credit was through a limited guaranty by an investor who secured the additional obligation by maintaining as collateral a money market account of a minimum of $200,000 with the bank. This guarantee was only for the amounts arising from the Line. It was the intention of both the investor and the Company that the Line was to be repaid within a reasonable time period after the successful raise of capital but no later than January 9, 2014, the maturity date of the Line. The payoff of the Line would release the investor of its obligation to the bank. The Company borrowed $200,000 on the Line in January 2013, and the entire balance was paid in April 2013.


In conjunction with the Loan and Security Agreement, the Company issued warrants to the bank to purchase 17,500 shares of Heat's Series A Preferred Stock. The warrants were issued on August 7, 2012 with an initial exercise price of $4.83 per share and expire on August 7, 2022. The warrants converted from preferred stock warrants into warrants to purchase common stock upon the completion of the initial public offering in July 2013 and the number of shares were adjusted for the 1-for-2.3 reverse stock split. However, since the warrants still have an anti-dilution provision, they remain liabilities and are subject to re-measurement at each balance sheet date. The total number of warrants post the 1-for-2.3 reverse stock split is 7,609.