Loan Payable

6 Months Ended

Jun. 30, 2012

Loan Payable [Abstract]

LOAN PAYABLE

7. LOAN PAYABLE

In June 2011, the Company entered into a loan agreement with a bank. The loan agreement provides the Company with a $1,000,000 line of credit for the purchase of capital equipment. The line is available to the Company until December 31, 2012. The annual interest rate is the greater of 6.75% or 3.50% above the Prime Rate. Borrowings are repayable in equal monthly installments over a thirty six month period. The Company was assessed commitment fees totaling $10,000 and issued the bank a warrant for the purchase of 16,071 shares of Common Stock. The warrant has a seven year term and is exercisable at $1.40 per share. The fair value of the warrant was determined to be approximately $10,000 and was recorded as a deferred financing cost that will be amortized to interest expense over a three year period commencing from the date of the first draw from the equipment line of credit. Amortization of the deferred financing costs for the six months ended June 30, 2012 was $7,947 and is included in interest expense. As of June 30, 2012, advances under the equipment line of credit totaled $320,733. The equipment line of credit is secured by substantially all the assets of the Company excluding intellectual property. In accordance with the agreement, the Company is required to maintain its primary banking and investments accounts with the commercial bank and a deposit of not less than $50,000 at the bank. Loan payable consisted of the following:

	June 30, 2012			December 31, 2011
Equipment loan	$	278,083		$	134,372
Less:current portion		(106,911	)		(50,578	)
	$	171,172		$	83,794

Interest expense related to the loan payable for the three and six months ended June 30, 2012 was $2,931 and $5,201, respectively.