Rockwell Medical (RMTI) 10-Q 12 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document and Entity Information	'	'
Entity Registrant Name	'ROCKWELL MEDICAL, INC.	'
Entity Central Index Key	'0001041024	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	40,759,976
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
ASSETS	'	'
Cash and Cash Equivalents	$661,117	$11,881,451
Investments Available for Sale	14,068,482	12,034,622
Accounts Receivable, net of a reserve of $41,000 in 2014 and $37,000 in 2013	4,100,453	4,578,319
Inventory	2,909,828	2,799,648
Other Current Assets	602,393	623,734
Total Current Assets	22,342,273	31,917,774
Property and Equipment, net	1,761,165	1,648,949
Intangible Assets	457,958	499,715
Goodwill	920,745	920,745
Other Non-current Assets	1,311,411	1,374,941
Total Assets	26,793,552	36,362,124
LIABILITIES AND SHAREHOLDERS' EQUITY	'	'
Note Payable	4,113,013	2,308,145
Accounts Payable	5,133,267	8,686,153
Accrued Liabilities	4,605,573	6,647,828
Customer Deposits	244,314	207,545
Total Current Liabilities	14,096,167	17,849,671
Long Term Debt	16,224,575	17,916,914
Shareholders' Equity:	'	'
Common Shares, no par value, 40,759,976 and 40,110,661 shares issued and outstanding	158,776,957	154,457,878
Common Share Purchase Warrants, 838,071 and 983,071 warrants issued and outstanding	4,225,669	4,895,811
Accumulated Deficit	-166,596,095	-158,790,569
Accumulated Other Comprehensive Income	66,279	32,419
Total Shareholders' Equity (Deficit)	-3,527,190	595,539
Total Liabilities And Shareholders' Equity	$26,793,552	$36,362,124

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS	'	'
Allowance for reserve, accounts receivable (in dollars)	$41,000	$37,000
Common Shares, par value (in dollars per share)	$0	$0
Common Shares, shares issued	40,759,976	40,110,661
Common Shares, shares outstanding	40,759,976	40,110,661
Common Share Purchase Warrants, issued	838,071	983,071
Common Share Purchase Warrants, outstanding	838,071	983,071

CONSOLIDATED_INCOME_STATEMENTS

CONSOLIDATED INCOME STATEMENTS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED INCOME STATEMENTS	'	'
Sales	$12,963,652	$12,336,374
Cost of Sales	11,283,694	11,055,394
Gross Profit	1,679,958	1,280,980
Selling, General and Administrative	4,090,199	3,916,783
Research and Product Development	4,615,197	12,754,518
Operating Income (Loss)	-7,025,438	-15,390,321
Interest and Investment Income, net	74,215	10,672
Interest Expense	-854,303	-75
Income (Loss) Before Income Taxes	-7,805,526	-15,379,724
Net Income (Loss)	($7,805,526)	($15,379,724)
Basic Earnings (Loss) per Share (in dollars per share)	($0.20)	($0.72)
Diluted Earnings (Loss) per Share (in dollars per share)	($0.20)	($0.72)

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	'	'
Net Income (Loss)	($7,805,526)	($15,379,724)
Unrealized Gain on Available-for-Sale Investments	33,860	'
Comprehensive Income (Loss)	($7,771,666)	($15,379,724)

CONSOLIDATED_STATEMENTS_OF_CHA

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)	Total	COMMON SHARES	PURCHASE WARRANTS	ACCUMULATED DEFICIT	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance at Dec. 31, 2013	$595,539	$154,457,878	$4,895,811	($158,790,569)	$32,419
Balance (purchase warrants in shares) at Dec. 31, 2013	983,071	'	983,071	'	'
Balance (in shares) at Dec. 31, 2013	40,110,661	40,110,661	'	'	'
Increase (Decrease) in Shareholders' Equity	'	'	'	'	'
Net Loss	-7,805,526	'	'	-7,805,526	'
Unrealized Gain on Available-For-Sale Securities	33,860	'	'	'	33,860
Issuance of Common Shares	1,044,975	1,044,975	'	'	'
Issuance of Common Shares (in shares)	'	262,500	'	'	'
Restricted Stock Issuance (in shares)	'	320,000	'	'	'
Exercise of Purchase Warrants	429,750	1,099,892	-670,142	'	'
Exercise of Purchase Warrants (in shares)	'	66,815	-145,000	'	'
Stock Option Based Expense	1,036,371	1,036,371	'	'	'
Restricted Stock Amortization	1,137,841	1,137,841	'	'	'
Balance at Mar. 31, 2014	($3,527,190)	$158,776,957	$4,225,669	($166,596,095)	$66,279
Balance (purchase warrants in shares) at Mar. 31, 2014	838,071	'	838,071	'	'
Balance (in shares) at Mar. 31, 2014	40,759,976	40,759,976	'	'	'

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows From Operating Activities:	'	'
Net (Loss)	($7,805,526)	($15,379,724)
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities:	'	'
Depreciation and Amortization	257,761	250,530
Share Based Compensation - Non-employee	'	966,227
Share Based Compensation- Employees	2,174,212	1,350,959
Amortization of Debt Issuance Costs	113,529	'
Non-Cash Interest Expense	112,529	'
Loss on Disposal of Assets	1,662	5,109
Changes in Assets and Liabilities:	'	'
Decrease (Increase) in Accounts Receivable	477,866	-30,367
Increase in Inventory	-110,180	-215,871
Decrease (Increase) in Other Assets	-243,936	257,464
Increase (Decrease) in Accounts Payable	-3,552,886	1,266,909
Increase (Decrease) in Other Liabilities	-1,790,208	220,809
Changes in Assets and Liabilities	-5,219,344	1,498,944
Cash Used In Operating Activities	-10,365,177	-11,307,955
Cash Flows From Investing Activities:	'	'
Purchase of Investments Available for Sale	-2,000,000	'
Purchase of Equipment	-329,882	-153,380
Proceeds on Sale of Assets	'	5,998
Cash Used In Investing Activities	-2,329,882	-147,382
Cash Flows From Financing Activities:	'	'
Proceeds from the Issuance of Common Shares and Purchase Warrants	1,474,725	12,518,733
Payments on Notes Payable and Capital Lease Obligations	'	-829
Cash Provided By Financing Activities	1,474,725	12,517,904
Increase (Decrease) In Cash	-11,220,334	1,062,567
Cash At Beginning Of Period	11,881,451	4,711,730
Cash At End Of Period	661,117	5,774,297
Supplemental Cash Flow disclosure	'	'
Interest Paid	$628,244	$75

Description_of_Business

Description of Business	3 Months Ended
	Mar. 31, 2014
Description of Business	'
Description of Business	'
	1.  Description of Business
	Rockwell Medical, Inc. and Subsidiary (collectively, “we”, “our”, “us”, or the “Company”) is a fully-integrated pharmaceutical company targeting end-stage renal disease (“ESRD”) and chronic kidney disease (“CKD”) with innovative products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis.  We have obtained global licenses for certain dialysis related drugs which we are developing and are seeking FDA approval to market.
	Rockwell has submitted a New Drug Application (“NDA”) to the Federal Food and Drug Administration (“FDA”) for its lead drug candidate, Triferic™.  The application is under review by the FDA.
	Rockwell is preparing to launch its FDA approved generic drug called Calcitriol to treat secondary hyperparathyroidism in dialysis patients.  Calcitriol active vitamin D injection is indicated in the management of hypocalcemia in patients undergoing chronic renal dialysis. Rockwell intends to launch Calcitriol as soon as it receives FDA manufacturing approval.
	Rockwell is also an established manufacturer and leader in delivering high-quality hemodialysis concentrates/dialysates to dialysis providers and distributors in the U.S. and abroad.  Rockwell’s products are used to maintain human life, by removing toxins and replacing critical nutrients in the dialysis patient’s bloodstream.  Rockwell has three manufacturing and distribution facilities located in the U.S. and its operating infrastructure is a ready-made sales and distribution channel that is able to provide seamless integration into the commercial market for its drug products, Calcitriol and Triferic™ upon FDA market approval.
	We are regulated by the FDA under the Federal Drug and Cosmetics Act, as well as by other federal, state and local agencies.  We have received 510(k) approval from the FDA to market hemodialysis solutions and powders and related equipment.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Summary of Significant Accounting Policies	'
	2.  Summary of Significant Accounting Policies
	Basis of Presentation
	Our consolidated financial statements include our accounts and the accounts for our wholly owned subsidiary, Rockwell Transportation, Inc.  All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America, or “GAAP,” and with the instructions to Form 10-Q and Securities and Exchange Commission Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
	In the opinion of our management, all adjustments have been included which are necessary to make the financial statements not misleading. All of these adjustments that are material are of a normal and recurring nature. Our operating results for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014. You should read our unaudited interim financial statements together with the financial statements and related footnotes for the year ended December 31, 2013 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 includes a description of our significant accounting policies.
	Revenue Recognition
	We recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles.  Generally, we recognize revenue when our products are delivered to our customer’s location consistent with our terms of sale.  We recognize revenue for international shipments when title has transferred consistent with standard terms of sale.
	We require certain customers, mostly international customers, to pay for product prior to the transfer of title to the customer.  Deposits received from customers and payments in advance for orders are recorded as liabilities under Customer Deposits until such time as orders are filled and title transfers to the customer consistent with our terms of sale.
	Cash and Cash Equivalents
	We consider cash on hand, money market funds, unrestricted certificates of deposit and short term marketable securities with an original maturity of 90 days or less as cash and cash equivalents.
	Investments Available for Sale
	Investments Available for Sale are short-term investments, consisting of investments in short term duration bond funds, and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy).  These funds generally hold high credit quality short term debt instruments.  These instruments are subject to changes in fair market value due primarily to changes in interest rates.  The fair value of these investments was $14,068,482 as of March 31, 2014.  Unrealized holding gains or losses on these securities are included in accumulated other comprehensive income (loss).  Realized gains and losses, including declines in value judged to be other-than-temporary on available-for-sale securities are included as a component of other income or expense.  Gross unrealized gains were $77,932 and gross unrealized losses were $11,653 as of March 31, 2014.  There were no realized gains or losses in the first quarter of 2014.
	The Company evaluated the near term interest rate environment, the expected holding period of the investments along with the duration of the fund portfolios in assessing the severity and duration of the potential impairment. Based on that evaluation the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2014.
	Research and Product Development
	We recognize research and product development expenses as incurred.  We incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products, including our anemia related iron maintenance drug candidate, Triferic™, aggregating approximately $4.6 million and $12.8 million for the three months ended March 31, 2014 and 2013, respectively. We have completed the human clinical trials related to Triferic™ and submitted an NDA to the FDA in the first quarter of 2014.  First quarter costs included a $2.2 million NDA review fee paid to the FDA for the review of Triferic™.
	Net Earnings Per Share
	We computed our basic earnings (loss) per share using weighted average shares outstanding for each respective period.  Diluted earnings per share also reflect the weighted average impact from the date of issuance of all potentially dilutive securities, consisting of stock options and common share purchase warrants, unless inclusion would have had an anti-dilutive effect.  The calculation of basic weighted average shares outstanding excludes unvested restricted stock. Actual weighted average shares outstanding used in calculating basic and diluted earnings per share were:
		Three months ended
		March 31,
		2014	2013
	Basic Weighted Average Shares Outstanding	39,812,820	21,241,000
	Effect of Dilutive Securities	—	—
	Diluted Weighted Average Shares Outstanding	39,812,820	21,241,000

Inventory

Inventory	3 Months Ended
	Mar. 31, 2014
Inventory	'
Inventory	'
	3.  Inventory
	Components of inventory as of March 31, 2014 and December 31, 2013 are as follows:
		March 31,		December 31,
		2014		2013
	Raw Materials	$	1,243,020	$	1,142,776
	Work in Process	231,936		254,714
	Finished Goods	1,434,872		1,402,158
	Total	$	2,909,828	$	2,799,648

Loans_Payable

Loans Payable	3 Months Ended
	Mar. 31, 2014
Loans Payable	'
Loans Payable	'
	4.  Loans Payable
	As of June 14, 2013, the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules Technology III, L.P. (“Hercules”) pursuant to which the Company received a loan in the aggregate principal amount of $20.0 million.   The Company is required to repay the aggregate principal balance under the Loan Agreement in 30 equal monthly installments of principal and interest commencing on September 1, 2014.
	The loan will mature and become due on March 1, 2017, subject to adjustment as provided below, and will bear interest at the greater of (i) 12.50% plus the prime rate as reported in The Wall Street Journal minus 3.25%, or (ii) 12.50%.  The Company will be required to make monthly interest only payments through August 31, 2014.  Monthly principal and interest payments will be due on the loan following the interest only period through the maturity date. The loan may be prepaid at any time after June 14, 2014 without penalty and will mature and become due upon any change in control of the Company.  The Company paid debt issuance costs of $1.1 million including a fee of $0.2 million at closing to Hercules, which are recorded as a noncurrent asset, and is required to pay a fee of $1.1 million upon any prepayment or at maturity.  The $1.1 million fee due upon any prepayment or at maturity is accrued using the effective interest rate method over the life of the loan.  The effective interest rate of the loan is 14.5%.
	In connection with the loan, the Company granted Hercules a security interest in substantially all of the Company’s assets other than motor vehicles, real property and certain intellectual property and other interests.  The Loan Agreement provides for standard indemnification of Hercules and contains representations, warranties and non-financial covenants of the Company.  The Loan Agreement contains covenants that, among other things, limit the Company’s ability to incur additional indebtedness, transfer assets, acquire assets of or merge with another entity and pay dividends to the Company’s shareholders.  The Loan Agreement defines event of default, to include, among other events, the occurrence of an event that results in a material adverse effect upon the Company’s business operations, properties, assets or condition (financial or otherwise), the collateral or the perfection of the security interest, or the Company’s ability to perform its obligations under the Loan Agreement.
	The balance of the above debt matures at March 31, 2014 as follows:
	2014 (remainder of year)	$	2,308,145
	2015	7,544,935
	2016	8,555,035
	2017	1,591,885
	Total Principal Payable	$	20,000,000
	Interest accrued on the loan payable through March 31, 2014 was $215,278.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Basis of Presentation	'
	Basis of Presentation
	Our consolidated financial statements include our accounts and the accounts for our wholly owned subsidiary, Rockwell Transportation, Inc.  All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America, or “GAAP,” and with the instructions to Form 10-Q and Securities and Exchange Commission Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
	In the opinion of our management, all adjustments have been included which are necessary to make the financial statements not misleading. All of these adjustments that are material are of a normal and recurring nature. Our operating results for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014. You should read our unaudited interim financial statements together with the financial statements and related footnotes for the year ended December 31, 2013 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 includes a description of our significant accounting policies.
Revenue Recognition	'
	Revenue Recognition
	We recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles.  Generally, we recognize revenue when our products are delivered to our customer’s location consistent with our terms of sale.  We recognize revenue for international shipments when title has transferred consistent with standard terms of sale.
	We require certain customers, mostly international customers, to pay for product prior to the transfer of title to the customer.  Deposits received from customers and payments in advance for orders are recorded as liabilities under Customer Deposits until such time as orders are filled and title transfers to the customer consistent with our terms of sale.
Cash and Cash Equivalents	'
	Cash and Cash Equivalents
	We consider cash on hand, money market funds, unrestricted certificates of deposit and short term marketable securities with an original maturity of 90 days or less as cash and cash equivalents.
Investments Available for Sale	'
	Investments Available for Sale
	Investments Available for Sale are short-term investments, consisting of investments in short term duration bond funds, and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy).  These funds generally hold high credit quality short term debt instruments.  These instruments are subject to changes in fair market value due primarily to changes in interest rates.  The fair value of these investments was $14,068,482 as of March 31, 2014.  Unrealized holding gains or losses on these securities are included in accumulated other comprehensive income (loss).  Realized gains and losses, including declines in value judged to be other-than-temporary on available-for-sale securities are included as a component of other income or expense.  Gross unrealized gains were $77,932 and gross unrealized losses were $11,653 as of March 31, 2014.  There were no realized gains or losses in the first quarter of 2014.
	The Company evaluated the near term interest rate environment, the expected holding period of the investments along with the duration of the fund portfolios in assessing the severity and duration of the potential impairment. Based on that evaluation the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2014.
Research and Product Development	'
	Research and Product Development
	We recognize research and product development expenses as incurred.  We incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products, including our anemia related iron maintenance drug candidate, Triferic™, aggregating approximately $4.6 million and $12.8 million for the three months ended March 31, 2014 and 2013, respectively. We have completed the human clinical trials related to Triferic™ and submitted an NDA to the FDA in the first quarter of 2014.  First quarter costs included a $2.2 million NDA review fee paid to the FDA for the review of Triferic™.
Net Earnings Per Share	'
	Net Earnings Per Share
	We computed our basic earnings (loss) per share using weighted average shares outstanding for each respective period.  Diluted earnings per share also reflect the weighted average impact from the date of issuance of all potentially dilutive securities, consisting of stock options and common share purchase warrants, unless inclusion would have had an anti-dilutive effect.  The calculation of basic weighted average shares outstanding excludes unvested restricted stock. Actual weighted average shares outstanding used in calculating basic and diluted earnings per share were:
		Three months ended
		March 31,
		2014	2013
	Basic Weighted Average Shares Outstanding	39,812,820	21,241,000
	Effect of Dilutive Securities	—	—
	Diluted Weighted Average Shares Outstanding	39,812,820	21,241,000

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2014
Summary of Significant Accounting Policies	'
Schedule of weighted average shares outstanding used in calculating basic and diluted earnings per share	'
		Three months ended
		March 31,
		2014	2013
	Basic Weighted Average Shares Outstanding	39,812,820	21,241,000
	Effect of Dilutive Securities	—	—
	Diluted Weighted Average Shares Outstanding	39,812,820	21,241,000

Inventory_Tables

Inventory (Tables)	3 Months Ended
	Mar. 31, 2014
Inventory	'
Schedule components of inventory	'
		March 31,		December 31,
		2014		2013
	Raw Materials	$	1,243,020	$	1,142,776
	Work in Process	231,936		254,714
	Finished Goods	1,434,872		1,402,158
	Total	$	2,909,828	$	2,799,648

Loans_Payable_Tables

Loans Payable (Tables)	3 Months Ended
	Mar. 31, 2014
Loans Payable	'
Schedule of debt maturity	'
	2014 (remainder of year)	$	2,308,145
	2015	7,544,935
	2016	8,555,035
	2017	1,591,885
	Total Principal Payable	$	20,000,000

Description_of_Business_Detail

Description of Business (Details)	Mar. 31, 2014
	item
Description of Business	'
Number of US manufacturing and distribution facilities	3

Summary_of_Significant_Account3

Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Investments Available for Sale	'	'	'
Fair value of investments	$14,068,482	'	$12,034,622
Gross unrealized gains	77,932	'	'
Gross unrealized losses	11,653	'	'
Realized gains or losses	0	'	'
Research and Product Development	'	'	'
Product development and research costs	4,615,197	12,754,518	'
Patents	'	'	'
Research and Product Development	'	'	'
NDA review fee	$2,200,000	'	'

Summary_of_Significant_Account4

Summary of Significant Accounting Policies (Details 2)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Weighted average shares outstanding used in calculating basic and diluted earnings per share	'	'
Basic Weighted Average Shares Outstanding	39,812,820	21,241,000
Effect of Dilutive Securities	0	0
Diluted Weighted Average Shares Outstanding	39,812,820	21,241,000

Inventory_Details

Inventory (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Inventory	'	'
Raw Materials	$1,243,020	$1,142,776
Work in Process	231,936	254,714
Finished Goods	1,434,872	1,402,158
Total	$2,909,828	$2,799,648

Loans_Payable_Details

Loans Payable (Details) (Loan Agreement, USD $)	3 Months Ended
	Mar. 31, 2014	Jun. 14, 2013
		item
Loans Payable	'	'
Aggregate principal amount	'	$20,000,000
Number of installments over which the loan is to be repaid	'	30
Maturity date	1-Mar-17	'
Interest rate under second condition (as a percent)	12.50%	'
Debt issuance costs	1,100,000	'
Fee paid to Hercules	200,000	'
Fee due and accrued	1,100,000	'
Effective interest rate of loan (as a percent)	14.50%	'
Maturities of debt	'	'
2014 (remainder of year)	2,308,145	'
2015	7,544,935	'
2016	8,555,035	'
2017	1,591,885	'
Total Principal Payable	20,000,000	'
Interest accrued on the loan payable	215,278	'
Forecast	'	'
Loans Payable	'	'
Fee paid to Hercules	$1,100,000	'
Prime rate	'	'
Loans Payable	'	'
Spread added to reference rate under first condition (as a percent)	12.50%	'
Variable rate basis under first condition	'prime rate	'
Percentage point deducted from reference rate to compute variable rate under first condition	3.25%	'