Note 5 - Convertible Debentures

6 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

5.

     

Convertible Debentures

In

February

2016

in exchange for aggregate proceeds of

$15

million, the Company sold and issued to Boyalife Investment Inc. and Boyalife (Hong Kong) Limited (i)

735,294

shares of common stock at a purchase price of

$3.40

per share (the “Stock Price”) for gross proceeds of

$2.5

million, (ii) Secured Convertible Debentures for

$12.5

million (the “Debentures”) convertible into

3,676,471

shares of common stock and (iii) warrants to purchase

3,529,412

additional shares of common stock at an exercise price of

$8.00

per share for a period of

five

years. The amount of warrants was based on

80%

coverage of the shares issued or to be issued for the equity transaction in (i) and the debt transaction in (ii) above. The warrants were exercisable on

August

13,

2016

and are outstanding at

December

31,

2016.

On

August

22,

2016,

the Company notified Boyalife Investment Inc., that the Company elected to convert all outstanding principal and interest accrued and otherwise payable under the Debentures, which included the conversion of

$12,500

of principal and

$8,250

of interest up to and including the maturity date of the Debentures. Upon conversion,

6,102,941

shares of common stock were issued and the Debentures and all security interest and liens were terminated. The common shares of

2,426,470

that were issued for payment of the interest, had a fair market value of

$11,404

on

August

22,

2016.

Accordingly, an additional

$3,154

of interest expense was recorded on the date of conversion.

At the time of the conversion, the remaining debt discount of

$9,538

and debt issue costs of

$155

were fully amortized.