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DEBT
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Sep. 30, 2014
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Text Block] |
Revolving Line of Credit The Company has an agreement with TD Bank for a revolving line of credit maturing on November 30, 2015 for up to $1,215,000. The line of credit has a variable rate of interest per annum at the Wall Street Journal prime rate plus 1% (4.25% as of September 30, 2014 and December 31, 2013). The line of credit is collateralized by all of the Company’s assets and is guaranteed by the CEO of the Company. The outstanding balance as of September 30, 2014 and December 31, 2013 was $1,200,000 and $1,015,000, respectively.
Santander Bank (formerly Sovereign Bank) Loan Agreement The Company had a term loan, originally established to provide the Company revolving advances up to $100,000, with an interest rate of 7.74% per annum. The term loan was repaid during the quarter ended September 30, 2014. The amount outstanding under this term loan was $11,667 as of December 31, 2013.
Convertible Note On September 23, 2013, the Company issued a convertible promissory note in the amount of $500,000 to an accredited investor, AAMD LLC, with a maturity date of March 23, 2016, and bearing interest at the rate of 7.0% per annum. Pursuant to the terms of the note, the principal and interest outstanding thereunder automatically converted into 117,567 shares of common stock upon the closing of the IPO at a conversion price equal to 90% of the per-share issuance price of the common stock in the IPO. This conversion resulted in additional common stock and paid in capital amounts of $118 and $587,717, respectively, at the conversion date. Interest and other expense of $51,809 and $77,263 were recorded in connection with this convertible note for the three and nine months ended September 30, 2014, respectively, and are included in interest expense and other income (expense)-net in the condensed consolidated statements of operations.
As of December 31, 2013, the carrying value of the convertible note payable was $472,429, including $11,767 of accrued interest. The Company reviewed the terms of convertible debt and equity instruments issued to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. The automatic conversion feature of this promissory note has the economic characteristics of a contingent redemption because the total fair value of shares delivered to settle this feature will always be equal to a fixed amount regardless of the IPO price. Consequently, in substance, the automatic conversion feature has the economic characteristics of a contingent early redemption of the convertible note using shares rather than cash (i.e., stock-settled debt), and represents an embedded derivative instrument under Accounting Standards Codification 815-15-25 that is required to be accounted for separately from the debt instruments. The Company accounted for the automatic conversion feature as a derivative liability to be recorded at fair value at each reporting period. The fair value of the automatic conversion feature at December 31, 2013 was estimated to be $38,142 and is included in other long-term liabilities on the condensed consolidated balance sheet at that date. Maturities of notes payable as of September 30, 2014 are as follows:
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