2.4.0.8109 - Disclosure - Debt arrangementstruefalsefalse1falsefalsefalseP01_01_2013To06_30_2013http://www.sec.gov/CIK0001476719duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_DebtDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_DebtDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalselabel1falsefalsefalse00 <table border="0" style="clear:both;width:100%; table-layout:fixed;"> <tr> <td></td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0in 0in 0pt; FONT-SIZE: 10pt"> <table style="clear:both;MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="MARGIN: 0in; VERTICAL-ALIGN: top"> <td style="TEXT-INDENT: 0in; MARGIN: 0in; WIDTH: 0.25in"> <div><strong>4.</strong></div> </td> <td style="TEXT-ALIGN: justify"> <div><strong>Debt arrangements</strong></div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><strong> </strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">On May 10, 2013 and June 11, 2013, CBS completed the issuance of $<font style=" FONT-SIZE: 10pt">7,000,000</font> and $<font style=" FONT-SIZE: 10pt">3,000,000</font>, respectively, in aggregate principal amount of its senior convertible notes (the “Convertible Notes”) due <font style=" FONT-SIZE: 10pt">May 10, 2018</font> and <font style=" FONT-SIZE: 10pt">June 11, 2018</font>, respectively (individually and collectively, the “Maturity Date”) in a private offering to certain accredited investors.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Convertible Notes bear interest at an annual rate of <font style=" FONT-SIZE: 10pt">6.5</font>% (<font style=" FONT-SIZE: 10pt">18.0</font>% per annum if there is an event of default under the Convertible Notes) payable quarterly in arrears on each January 1, April 1, July 1 and October 1. Interest expense related to the Convertibles Notes for the three and six months ended June 30, 2013 was approximately $<font style=" FONT-SIZE: 10pt"><font style=" FONT-SIZE: 10pt">75,000</font></font>.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">On the Maturity Date or earlier acceleration as described below, the Convertible Notes will be convertible into shares of CBS common stock based on a conversion price of $<font style=" FONT-SIZE: 10pt">1.55</font> per share (the “Conversion Price”). CBS may determine to convert accrued interest into CBS common stock by issuing that number of shares of common stock equal to the amount of interest to be paid divided by the Conversion Price, provided that there has been no failure of any of the conditions to such conversion set forth in the Notes (an “Equity Conditions Failure”) on any day during the period commencing 20 trading days immediately prior to such date of determination unless waived by a Note holder. Otherwise the Company will be required to make interest payments in cash.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Fractional shares that would otherwise be issuable upon the conversion of a Note or the payment of interest in shares will be rounded up to the next whole share in the case of a conversion and rounded to the nearest whole share in the case of an interest payment in shares.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">All of the conversion rights discussed above are subject to ownership limitations set forth in the Notes, which prohibit any holder from receiving shares under the Notes, by way of conversion, the payment of interest in shares or otherwise, in an amount that would cause that holder to beneficially own more than <font style=" FONT-SIZE: 10pt">9.99</font>% of the outstanding shares of common stock after giving effect to the issuance (the “Ownership Limitation”).</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><u>Prepayment and acceleration of maturity</u></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">At any time after the first anniversary of the date on which a Note was issued and provided that no Equity Conditions Failure exists, but no more often than once during any 30-day period, the Company may prepay the unpaid principal balance and accrued interest and late charges (collectively, the “Conversion Amount”) then remaining under the Note, in whole or in part, subject to a <font style=" FONT-SIZE: 10pt"> 25</font>% prepayment premium. If, however, the amount that the Company elects to prepay exceeds the amount that the holder could convert after taking into account the Ownership Limitation, then the amount of the prepayment will be limited to such lesser amount. <font style="COLOR: black">The Company’s election to prepay a Note will be cancelled if, unless waived by a holder, an Equity Conditions Failure occurs at any time prior to the date set for prepayment.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Notes permit their holders to accelerate the Company’s repayment obligations if there is a change in control (as defined in the Notes) of the Company at any time before the maturity dates of the Notes. <font style=" FONT-SIZE: 10pt">If a change in control occurs on or before the third anniversary of a Note’s issuance date, the Company would be obligated to pay a cash premium on the unpaid principal balance to the holder of that Note equal to 15.0% if the change in control occurs on or before the first anniversary of the issuance date, 10.0% if the change in control occurs between the first and second anniversaries of the issuance date, and 5.0% if the change in control occurs between the second and third anniversaries of the issuance date.</font>  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Each Note contains events of default that are customary for this type of instrument. Upon an event of default and regardless of whether such event of default has been cured, the holder will have the right to accelerate all or a portion of the outstanding balance due under its Note and will also be entitled to exercise those rights available to an unsecured creditor of the Company.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt">  </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><u>Mandatory Conversion</u></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">The Company has the right to require the holder of a Note to convert the Conversion Amount remaining under the Note if, at any time after the first anniversary of the issuance date, (i) the dollar volume-weighted average price for the common stock on the principal market on which the common stock is then listed or traded exceeds 200% of the Conversion Price for 30 consecutive trading days, and (ii) no equity conditions failure then exists, although the Company is entitled to effect only one mandatory conversion during any 20 consecutive trading days. Shares delivered in connection with a mandatory conversion must be accompanied by a payment in cash equal to the amount of any accrued and unpaid interest with respect to the amount being converted, plus all accrued and unpaid late charges with respect to such amount.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"><u>Debt Issuance Costs</u></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">Debt issuance costs assocated with this arrangement amounted to $<font style=" FONT-SIZE: 10pt">916,452</font>. These costs are being amortized rateably over the period ending with the maturity of the Notes issued in the second closing. Amortization expense for the three and six month period ended June 30, 2013 was approximately $<font style=" FONT-SIZE: 10pt"><font style=" FONT-SIZE: 10pt">8,000</font></font>.</div> </div> falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 19, 20, 22
-Article 5
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.19,20,22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682
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