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Notes Payable
3 Months Ended
Mar. 31, 2013
Notes Payable [Abstract]  
Notes Payable

Note 3 — Notes Payable

 

Original Issuancand amendments— In February 2012, we issued $1.5 million of notes payable at 15% interest to two investors. The notes were secured by the assets of the Company. In 2012, we executed a series of four amendments which modified the maturity dates and cash claims of the notes, as well as including additional conversion features. We issued warrants to purchase up to 6.9 million shares of the company before August 2018. These warrants were issued or reset to a $0.28 exercise price and may be subject to further downward exercise price adjustment.

 

Amendment Five — In February 2013, we amended the notes to a) extend the maturity date to April 2013 and b) in the event that the company was merged or consolidated, the company would repay the entire unpaid principal balance and all accrued and unpaid interest through the issuance of an aggregate number of shares of common stock calculated by converting the then total outstanding principal and interest at a value of $0.28 per share of common stock. We issued warrants to purchase up to 1.0 million shares of the company before August 2018. These warrants were price adjusted at a $0.28 exercise price.

 

Amendment Six – In August 2013, we amended the notes to a) extend the maturity date to March 2014, b) release our UNA technology from the collateral securing our obligations under the notes, and c) provide that we would pay a portion of any payments that we receive from the licensing, partnering or disposition of our technology, or from the sale of our debt or equity securities in a bona fide capital raising transaction, to the note holders. We issued Price Adjustable Warrants to purchase up to 4.0 million shares of the company before February 2019 at an exercise price of $0.28 per share.

 

During the three months ended March 31, 2012 and 2013, the Company recorded interest expense related to the notes of $.03 million in each period and a loss on extinguishments, and a gain on the change in the fair value of embedded derivatives of $0.93 million and $0.3 million, respectively, for the three months ended March 31, 2013.

 

In February 2014, the note holders exchanged the notes in the aggregate principal and interest amount of approximately $1.5 million for approximately 2.0 million shares of our common stock.