Research and development expense was $5.8 million in the second quarter of 2013, compared to $4.7 million in the comparable period in 2012. During the second quarter of 2013, Gevo's development efforts were focused on startup operations for the production of isobutanol at its Luverne facility as well as optimization of specific parts of its isobutanol production technology to further enhance isobutanol production rates. The increase in research and development expense in the second quarter of 2013, when compared to the comparable quarter in 2012, also included Gevo's investment in bio-para-xylene processing equipment at the Silsbee demonstration plant near Houston, Texas, and delivery of bio-jet fuel to the USAF. Funding used in the development of the bio-para-xylene facility was received from Toray Industries, Inc. under a definitive agreement previously announced in 2012. The bio-jet fuel delivered to the USAF in the second quarter of 2013 was produced at the Silsbee facility.
Selling, general and administrative expense decreased to $6.3 million in the second quarter of 2013 from $9.5 million for the second quarter of 2012. The decrease in selling, general and administrative expense in the second quarter of 2013 reflected lower compensation expenses, including cost saving benefits resulting from actions taken during 2012 to focus Gevo's operations.
Interest expense for the second quarter of 2013 was $2.3 million compared to $0.5 million in the second quarter of 2012. The increase resulted from interest incurred on the company's 7.5% convertible notes due 2022 which were issued in July 2012, including $1.1 million for non-cash charges for amortization of debt discounts recorded at the time of issuance of the convertible notes.
The company reported a non-cash gain of $2.0 million related to changes in the fair value of embedded derivatives contained in the convertible notes. These derivatives result from the rights that holders of the convertible notes have upon conversion, and under certain circumstances, will result in non-cash amounts being recorded in the company's statement of operations in each reporting period while the convertible notes remain outstanding. Also related to the convertible debt, the company reported a loss of $1.1 million for the early extinguishment of convertible debt. During the second quarter of 2013, holders of $8.9 million of convertible notes opted to convert their note holdings into shares of Gevo common stock. Upon conversion, these holders received a total of 2,979,022 shares of common stock, including 1,561,698 shares of common stock issued upon conversion of the convertible notes and an aggregate of 1,417,324 shares of common stock issued in satisfaction of make-whole payments. Since the beginning of 2013, holders of $18.1 million of convertible notes have opted to convert their note holdings into shares of Gevo common stock receiving an aggregate of 6,137,383 shares upon conversion and in settlement of make-whole payments. The effective issue price in full settlement of the convertible notes converted during the six months ended June 3, 2013 was $3.75 per share.