Debt (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Debt

Debt consists of the following (in thousands):

	SEPTEMBER 30, 2013			DECEMBER 31, 2012
Promissory note bearing interest at 6.25% per annum, which is payable monthly through May 2013, collateralized by all of the Company’s inventories, chattel paper, accounts receivable, equipment and general intangibles (excluding certain financed equipment and intellectual property). The Promissory Note was repaid in May 2013 (1)	$	—		$	35
Term Loan (Term Loan) bearing interest at 7.00% per annum which is payable monthly through April 2016. The Term Loan is collateralized by all of the Company’s inventories, chattel paper, accounts receivable, equipment and general intangibles (excluding certain financed equipment and intellectual property) pledged as collateral under the Term Loan, subordinated (1)		339			426
Promissory note bearing interest at 7.00% per annum which is payable monthly through November 2014, collateralized by all of the Company’s inventories, chattel paper, accounts receivable, equipment and general intangibles (excluding certain financed equipment and intellectual property), net of unamortized debt discount at September 30, 2013 of $2, subordinated (1)		158			261
Senior secured promissory note (April 2012 Senior Secured Promissory Note) bearing interest at 15.00% per annum which is payable monthly through April 2017, collateralized by substantially all of the Company’s assets. The April 2012 Senior Secured Promissory Note was repaid in January 2013		—			8,374
Junior secured promissory notes (October 2012 and April 2013 Junior Secured Promissory Notes) bearing interest at 12.00% per annum which is payable monthly through October 2015, collateralized by substantially all of the Company’s assets, net of unamortized debt discount at September 30, 2013 of $509 (1)		11,941			7,242
Debt		12,438			16,338
Less current portion		(177	)		(8,572	)
	$	12,261		$	7,766

⁽¹⁾  The lender’s security interest was subordinate to the holders of the April 2012 Senior Secured Promissory Note with the exception of its interest in equipment.

Consideration Received, Fair Values of Notes, Common Stock Warrants Issued and Calculation of the Gain on Extinguishment of Debt

The following table shows the consideration received, fair values of the notes and common stock warrants issued and calculation of the gain on extinguishment of debt for the $3,750,000 Notes (in thousands):

Consideration received
Fair Value of October 2012 Subordinated Convertible Note	$	1,360
Cash		2,500
Total Consideration Received (a)	$	3,860
Notes and Warrants Issued
Principal Balance of Notes Issued	$	3,750
Debt Discount (1)		(291	)
Fair Value of Notes Issued		3,459
Fair Value of Additional Common Stock Warrants Issued		352
Total Fair Value of Notes and Warrants Issued (b)	$	3,811
Gain on Extinguishment of Debt (a - b)	$	49

⁽¹⁾  The amortization of this account is being recorded in interest expense on the condensed consolidated statements of operations over the term of the arrangement.

October 2012 Junior secured promissory notes [Member]

Activity Related to Secured Promissory Note

Activity related to the October 2012 and April 2013 Junior Secured Promissory Notes from December 31, 2012 through September 30, 2013 consisted of the following (in thousands):

	DECEMBER 31, 2012			ADDITIONS			AMORTIZATION OF DEBT DISCOUNT		PRINCIPAL PAYMENTS		SEPTEMBER 30, 2013
Principal	$	7,500		$	4,950		$	—	$	—	$	12,450
Debt discount related to issuance of common stock warrants (1)		(258	)		(113	)		95		—		(276	)
Discount related to the $3,750,000 Notes (1)		—			(291	)		58		—		(233	)
	$	7,242		$	4,546		$	153	$	—	$	11,941

⁽¹⁾  The amortization of this account is included in interest expense on the condensed consolidated statements of operations and as noncash interest expense in the condensed consolidated statement of cash flows.

April 2012 Senior secured promissory note [Member]

Activity Related to Secured Promissory Note

Activity related to the April 2012 Senior Secured Promissory Note from December 31, 2012 through September 30, 2013 consisted of the following (in thousands):

	DECEMBER 31, 2012			AMORTIZATION OF DEBT DISCOUNT		PRINCIPAL PAYMENTS			SEPTEMBER 30, 2013
Principal	$	9,139		$	—	$	(9,139	)	$	—
Discount related to Series C Warrant (1)		(251	)		251		—			—
Discount related to financing costs (1)		(514	)		514		—			—
	$	8,374		$	765	$	(9,139	)	$	—

⁽¹⁾  The amortization of this account is included in interest expense in the condensed consolidated statements of operations and noncash interest expense in the condensed consolidated statements of cash flows.