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Notes Payable
12 Months Ended
Dec. 31, 2012
Debt Disclosure [Abstract]  
Notes Payable
8. Notes Payable

On September 2, 2011, the Company entered into a Loan and Security Agreement (the “Notes”) with two lenders.  Under the terms of the Notes, the Company borrowed $1,500,000 from each lender, or a total of $3,000,000, at an interest rate of 7% per annum (effective interest rate of 34% per annum when taking into account the stated interest rate plus the impact of warrants given as additional compensation) each with a maturity date of January 15, 2013. The Company granted the lenders a first priority security interest in all of the Company’s assets, in order to secure the Company’s obligation to repay the loans. The loan agreement contains customary negative covenants restricting the Company’s ability to take certain actions without the lenders’ consent, including incurring additional indebtedness, transferring or encumbering assets, paying dividends or making certain other payments and acquiring businesses. In connection with the Notes, the Company granted each lender a warrant to purchase 250,000 shares of common stock at a purchase price of $2.90 per share with a term of five years.  The relative fair value of the warrants was estimated at $1,131,303 using the Black Scholes method which has been recorded as a debt discount against the Notes. The Company amortized $532,378 and $554,562 of the debt discount as interest expense using the effective interest method during the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, $44,363 of the debt discount associated with the Notes was unamortized. On October 18, 2011, the Company repaid each lender $500,000 in principal and $4,411 in interest such that as of December 31, 2012 and 2011, the Company had outstanding Loans aggregating $2,000,000. On January 15, 2013, the Company failed to repay the principal and accrued interest due on the Notes and was in default of its obligations. On February 1, 2013, the Company repaid the $2,000,000 principal of the Notes plus the outstanding accrued interest.