8. Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Text Block]

8. DEBT

Long-term debt consisted of the following at December 31:

	2012			2011
2011 Credit Facility	$	—		$	2,583,333
2010/2011 Convertible Debt Offering		—			600,000
Promissory Notes Payable		379,311			600,309
Note payable in monthly installments of $707, including interest through June 2012.		—			3,290
		379,311			3,786,932
Less debt discount		—			(142,560	)
		379,311			3,644,372
Current portion of long-term debt		(379,311	)		(3,291,166	)
Long-term debt—net of discount and current portion	$	—		$	353,206

2011 Credit Facility—In July 2011, the Company entered into a Loan and Security Agreement with an institutional lender (the “2011 Credit Facility”), under which the Company borrowed $3.0 million in term loans for general working capital purposes and to refinance the Company’s preexisting line of credit. These term loans had an interest rate of 7.25%, and were due in monthly payments of principal and accrued interest over thirty-six months.

On March 30, 2012, the Company entered into a forbearance agreement with the lender, and on April 30, 2012, the Company entered into an amended forbearance agreement to extend the forbearance period and to establish a new loan maturity date of May 7, 2012. On May 7, 2012, the Company repaid in full the 2011 Credit Facility with the proceeds from an approximate $2.3 million term loan made pursuant to the Secured Demand Promissory Note dated as of May 7, 2012. The 2012 Interim Loan bore interest at the rate of 7% per annum. In July 2012, the 2012 Interim Loan was paid in full with the proceeds of the 2012 Term Loan. See Note 7 – Note Payable – Related Parties for additional information.

In connection with the repayment of the 2011 Credit Facility, the Company wrote off the remaining balance of the loan acquisition costs and debt discount, resulting in the recognition of a loss on extinguishment of approximately $60,000 in the second quarter of 2012.

Convertible Promissory Notes (“2010/2011 Convertible Debt Offering”)—The Company issued convertible promissory notes in 2010 and 2011 which bore interest at 8% and converted into common stock on December 30, 2011 at the closing of the Company’s IPO. Three holders totaling $0.6 million in principal waived their registration rights under the agreement and, in January 2012, were paid an amount equal to the value of the common stock that would have been issued to them had their principal and accrued interest converted into common stock according to the terms of the agreement.

Promissory Notes— As of December 31, 2012 and December 31, 2011, promissory notes outstanding totaled $0.4 million and $0.6 million, respectively, on two notes which do not accrue interest. As of December 31, 2012, the principal of the first note of $0.2 million was classified as a current liability because it matures in 2013, and the principal of the second note of $0.2 million was classified as current because in January 2013 the Company did not make a mandatory payment and, therefore classified the note as a current liability on the consolidated balance sheet.