Notes Payable (Details) - USD ($) | 12 Months Ended | | | | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 14, 2018 | Nov. 07, 2018 | Oct. 18, 2018 | Apr. 30, 2018 |
Debt Instrument, Stated Interest Rate | | | | 10.00% | | | 10.00% | | 10.00% |
Debt Instrument, Face Value | | $ 17,435,000 | | $ 31,375,000 | | | $ 3,700,000 | | $ 5,400,000 |
Debt Instrument, Remaining Debt (Discount) | | (995,000) | | (2,554,000) | | $ (1,374,000) | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 357,000 | | 2,608,000 | | | | | |
Debt Instrument, Carrying Value | | 16,797,000 | | $ 31,429,000 | | | | | |
Short-term Debt [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [1] | | | 8/16/2018 & 11/16/18 | | | | | |
Debt Instrument, Stated Interest Rate | [1] | | | 12.00% | | | | | |
Debt Instrument, Face Value | | 1,549,000 | | $ 11,629,000 | [1] | | | | |
Debt Instrument, Remaining Debt (Discount) | | (43,000) | | (403,000) | [1] | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 357,000 | | | | | | | |
Debt Instrument, Carrying Value | | $ 1,863,000 | | $ 11,226,000 | [1] | | | | |
Short-term Debt [Member] | Share Settled Debt [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [2] | | | In Default | | | | | |
Debt Instrument, Stated Interest Rate | [2] | | | 18.00% | | | | | |
Debt Instrument, Conversion Price | [2] | | | $ 0.24 | | | | | |
Debt Instrument, Face Value | [2] | | | $ 3,308,000 | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [2] | | | 0 | | | | | |
Debt Instrument, Carrying Value | [2] | | | $ 3,308,000 | | | | | |
Short-term Debt [Member] | Six Percent Unsecurble [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [3] | Due | | Due | | | | | |
Debt Instrument, Stated Interest Rate | [3] | 6.00% | | 6.00% | | | | | |
Debt Instrument, Conversion Price | [3] | $ 3.09 | | $ 3.09 | | | | | |
Debt Instrument, Face Value | [3] | $ 135,000 | | $ 135,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [3] | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [3] | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | [3] | $ 135,000 | | 135,000 | | | | | |
Short-term Debt [Member] | Ten Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [4] | 10/18/2019 | | | | | | | |
Debt Instrument, Stated Interest Rate | | 10.00% | [4] | | | | | 10.00% | |
Debt Instrument, Conversion Price | | $ 0.22 | [4] | | | | | $ 0.22 | |
Debt Instrument, Face Value | | $ 500,000 | [4] | | | | | $ 500,000 | |
Debt Instrument, Remaining Debt (Discount) | [4] | (43,000) | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [4] | 0 | | | | | | | |
Debt Instrument, Carrying Value | [4] | $ 457,000 | | | | | | | |
Short-term Debt [Member] | Eighteen Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [5] | In Default | | | | | | | |
Debt Instrument, Stated Interest Rate | [5] | 18.00% | | | | | | | |
Debt Instrument, Conversion Price | [5] | $ 0.21 | | | | | | | |
Debt Instrument, Face Value | [5] | $ 914,000 | | | | | | | |
Debt Instrument, Remaining Debt (Discount) | [5] | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [5] | 357,000 | | | | | | | |
Debt Instrument, Carrying Value | [5] | 1,271,000 | | | | | | | |
Short Term Notes Payable [Member] | | | | | | | | | |
Debt Instrument, Face Value | | 7,938,000 | | 6,952,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | | (783,000) | | | | | | | |
Debt Instrument, Remaining Debt Premium | | | | 170,000 | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | | $ 7,155,000 | | $ 7,122,000 | | | | | |
Short Term Notes Payable [Member] | Eight Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | | 6/20/2019 and 12/12/2019 | [6] | 9/3/2018 and 12/5/2018 | [7] | | | | |
Debt Instrument, Stated Interest Rate | | 8.00% | [6] | 8.00% | [7] | | | | |
Debt Instrument, Face Value | | $ 3,840,000 | [6] | $ 2,007,000 | [7] | | | | |
Debt Instrument, Remaining Debt (Discount) | [6] | (383,000) | | | | | | | |
Debt Instrument, Remaining Debt Premium | [7] | | | 355,000 | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 0 | [6] | 0 | [7] | | | | |
Debt Instrument, Carrying Value | | $ 3,457,000 | [6] | $ 2,362,000 | [7] | | | | |
Short Term Notes Payable [Member] | Ten Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | | Various | [8] | On Demand | [9] | | | | |
Debt Instrument, Stated Interest Rate | | 10.00% | [8] | 10.00% | [9] | | | | |
Debt Instrument, Face Value | | $ 3,658,000 | [8] | $ 650,000 | [9] | | | | |
Debt Instrument, Remaining Debt (Discount) | [8] | (400,000) | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [9] | | | 0 | | | | | |
Debt Instrument, Carrying Value | | $ 3,258,000 | [8] | $ 650,000 | [9] | | | | |
Short Term Notes Payable [Member] | Twelve Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [10] | Various | | On Demand | | | | | |
Debt Instrument, Stated Interest Rate | [10] | 12.00% | | 12.00% | | | | | |
Debt Instrument, Face Value | [10] | $ 440,000 | | $ 440,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [10] | 0 | | (82,000) | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [10] | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | [10] | 440,000 | | $ 358,000 | | | | | |
Short Term Notes Payable [Member] | Eight Percent Unsecured One [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [11] | | |  6/30/2018 | | | | | |
Debt Instrument, Stated Interest Rate | [11] | | | 8.00% | | | | | |
Debt Instrument, Face Value | [11] | | | $ 1,655,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [11] | | | (103,000) | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [11] | | | 0 | | | | | |
Debt Instrument, Carrying Value | [11] | | | $ 1,552,000 | | | | | |
Short Term Notes Payable [Member] | Eight Percent Unsecured Two [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [12] | | | On Demand | | | | | |
Debt Instrument, Stated Interest Rate | [12] | | | 8.00% | | | | | |
Debt Instrument, Face Value | [12] | | | $ 2,200,000 | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [12] | | | 0 | | | | | |
Debt Instrument, Carrying Value | [12] | | | 2,200,000 | | | | | |
Short Term Notes Payable Related Parties [Member] | | | | | | | | | |
Debt Instrument, Face Value | | 393,000 | | 1,121,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | | $ 393,000 | | $ 1,121,000 | | | | | |
Short Term Notes Payable Related Parties [Member] | Ten Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [13] | On Demand | | On Demand | | | | | |
Debt Instrument, Stated Interest Rate | [13] | 10.00% | | 10.00% | | | | | |
Debt Instrument, Face Value | [13] | $ 324,000 | | $ 1,071,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [13] | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [13] | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | [13] | $ 324,000 | | $ 1,071,000 | | | | | |
Short Term Notes Payable Related Parties [Member] | Twelve Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [13] | On Demand | | On Demand | | | | | |
Debt Instrument, Stated Interest Rate | [13] | 12.00% | | 12.00% | | | | | |
Debt Instrument, Face Value | [13] | $ 69,000 | | $ 50,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [13] | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [13] | 0 | | 0 | | | | | |
Debt Instrument, Carrying Value | [13] | 69,000 | | $ 50,000 | | | | | |
Long-term Debt [Member] | Twelve Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [14] | | | 06/21/20 | | | | | |
Debt Instrument, Stated Interest Rate | [14] | | | 12.00% | | | | | |
Debt Instrument, Conversion Price | [14] | | | $ 0.50 | | | | | |
Debt Instrument, Face Value | [14] | | | $ 5,350,000 | | | | | |
Debt Instrument, Remaining Debt (Discount) | [14] | | | (1,948,000) | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [14] | | | 2,608,000 | | | | | |
Debt Instrument, Carrying Value | [14] | | | $ 6,010,000 | | | | | |
Long Term Notes Payable [Member] | | | | | | | | | |
Debt Instrument, Face Value | | 2,155,000 | | | | | | | |
Debt Instrument, Remaining Debt (Discount) | | (169,000) | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 0 | | | | | | | |
Debt Instrument, Carrying Value | | $ 1,986,000 | | | | | | | |
Long Term Notes Payable [Member] | Five Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [15] | 1/13/2020 | | | | | | | |
Debt Instrument, Stated Interest Rate | [15] | 10.00% | | | | | | | |
Debt Instrument, Face Value | [15] | $ 1,000,000 | | | | | | | |
Debt Instrument, Remaining Debt (Discount) | [15] | (50,000) | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [15] | 0 | | | | | | | |
Debt Instrument, Carrying Value | [15] | $ 950,000 | | | | | | | |
Long Term Notes Payable [Member] | Eight Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | | 2/13/2020 | [16] | 06/20/19 | [6] | | | | |
Debt Instrument, Stated Interest Rate | | 8.00% | [16] | 8.00% | [6] | | | | |
Debt Instrument, Face Value | | $ 1,155,000 | [16] | $ 2,880,000 | [6] | | | | |
Debt Instrument, Remaining Debt (Discount) | | (119,000) | [16] | (373,000) | [6] | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | | 0 | [16] | 0 | [6] | | | | |
Debt Instrument, Carrying Value | | $ 1,036,000 | [16] | $ 2,507,000 | [6] | | | | |
Short term convertible notes payable - related party [Member] | Ten Percent Unsecured [Member] | | | | | | | | | |
Debt Instrument, Maturity Date, Description | [17] | On Demand | | | | | | | |
Debt Instrument, Stated Interest Rate | [17] | 10.00% | | | | | | | |
Debt Instrument, Conversion Price | [17] | $ 0.23 | | | | | | | |
Debt Instrument, Face Value | [17] | $ 5,400,000 | | | | | | | |
Debt Instrument, Remaining Debt (Discount) | [17] | 0 | | | | | | | |
Debt Instrument, Fair Value of Embedded Conversion Option | [17] | 0 | | | | | | | |
Debt Instrument, Carrying Value | [17] | $ 5,400,000 | | | | | | | |
| |
[1] | Upon the closing of sale of property in U.K. on December 14, 2018 (see Note 6), the two mortgage loans held by the Company were fully paid back as of December 31, 2018. The Company’s senior convertible notes secured by the mortgage loans were also paid back on December 14, 2018 (see note (15) below). The Company recorded debt extinguishment loss of approximately $0.4 million resulting from written off remaining unamortized deferred financing cost. | |
[2] | During the year ended December 31, 2018 and 2017, the holder of the Company’s share-settled debt converted approximately $3.3 million and $1.9 million of outstanding share-settled debt, respectively. The Holder has also forgiven the outstanding interest of approximately $1.4 million, which was recorded as gain from debt extinguishment during the year ended December 31, 2018. | |
[3] | This $135,000 note as of December 31, 2018 and December 31, 2017 consists of two separate 6% notes in the amounts of $110,000 and $25,000. In regard to the $110,000 note, the Company has made ongoing attempts to locate the creditor to repay or convert this note, but has been unable to locate the creditor to date. In regard to the $25,000 note, the holder has elected to convert these notes into equity, the Company has delivered the applicable conversion documents to the holder, and the Company is waiting for the holder to execute and return the documents. | |
[4] | On October 18, 2018, the Company entered into an Unsecured Convertible Promissory Note Agreement Plus Warrant (the “Note”) with an individual investor (the “Holder”) for an aggregate principal amount of $500,000. The Note bore interest at a rate of 10% per annum and is convertible at a conversion price of $0.22 per share of common stock. The Note is due and payable on October 18, 2019. Upon issuance of the Note, the Holder received a 2-year warrant to purchase 714,286 common shares of the Company at an exercise price of $0.35 per share (the “Warrants”). The fair value of the Warrants on the issuance date was approximately $57,000 using the Black-Scholes Model, which was recorded as a discount with a corresponding credit to warrant liabilities. | |
[5] | On May 1, 2018, the Company entered into a Convertible Secured Full Recourse Redeemable Note Agreement (the “Secured Note”) of $1.4 million with an existing investor, who is currently holding certain share-settled debt of the Company. The Secured Note included an original issue discount of $0.1 million and $50,000 legal cost that was reimbursable to the investor. The Secured Note was due on August 25, 2018 and is currently in default. The Secured Note currently bears a default interest rate at 18%.
Due to the events of default, the holder is entitled to convert all or any amount of the outstanding principal amount and interest into shares of the common stock of the Company without restrictive legend of any nature. The conversion price is equal to 90% of the average of the 5 lowest daily VWAP of the Company’s common stock during the 15 consecutive trading days immediately preceding the conversion date. The Company recorded $351,000 interest expenses related to embedded derivative liabilities as of the maturity date of the Secured Note and revalued at $357,000 as of December 31, 2018.
The Company recognized interest expense of approximately $189,000 resulting from amortization of debt discount for the Secured Note.
The accrued interest associated with the Secured Note was approximately $111,000 as of December 31, 2018. | |
[6] | This $3.8 million note as of December 31, 2018 consists of two separate 8% notes in the amounts of $1.2 million and $2.6 million.
During the year ended December 31, 2018, the Company converted approximately $1.9 million principal and $0.3 million accrued interest into approximately 13.1 million shares of common stock at fair value of $3.1 million. The Company recorded an approximate $0.9 million debt extinguishment loss from this conversion. | |
[7] | This $2.0 million note as of December 31, 2017 consists of two separate 8% notes in the amounts of $1.1 million and $0.9 million. Both notes were fully converted to the Company's common shares as of December 31, 2018.
During the year ended December 31, 2018, the Company converted approximately $2.0 million principal and $75,000 accrued interest into approximately 10.4 million shares of common stock at fair value of $2.5 million. The Company recorded an approximate $0.4 million debt extinguishment loss from this conversion.
During the year ended December 31, 2017, the Company converted approximately $0.4 million principal and $15,000 accrued interest into approximately 3.0 million shares of common stock at fair value of $0.6 million. The Company recorded an approximate $0.2 million debt extinguishment loss from this conversion. | |
[8] | Between October 1, 2018 and November 7, 2018, the Company entered into multiple one-year promissory notes (the “Notes”) with multiple holders (the “Holders”) for an aggregate principal amount of $3.7 million. The notes included approximately $0.2 million OID. The Notes bore interest at 10% per annum.
Upon issuance of the Notes, each of the Holders also received a 2-year warrant (the “Warrants”) to purchase 6.2 million common shares at an exercise price of $0.35 per share. The fair value of the Warrants on the issuance date was approximately $0.5 million using the Black-Scholes Model, which was recorded as a discount with a corresponding credit to warrant liabilities.
During the year ended December 31, 2018, the Company recognized interest expense of approximately $0.3 million resulting from amortization of debt discount for the Notes. The remaining debt discount as of December 31, 2018 was approximately $0.4 million.
The accrued interest associated with the Note was approximately $64,000 as of December 31, 2018. | |
[9] | In 2017, the Company entered two promissory note agreements (the “Notes”) with certain investors for an aggregate principal amount of $650,000. The Notes bore interest at 10% per annum, and were payable upon demand.
During the year ended December 31, 2018, the Company agreed to take the proceeds from the $500,000 note and $12,000 accrued interest to offset certain Series A convertible preferred stock subscription receivable.
During the year ended December 31, 2018, the Company made $150,000 principal payment and $22,000 interest payment. | |
[10] | During the year ended December 31, 2017, the Company entered two promissory note agreements (the “Notes”) with the same investor for an aggregate principal amount of $440,000. The Notes bore interest at 12% per annum, and is payable upon demand. The Company also issued approximately 1.2 million warrants with a weighted average strike price of $0.19 in conjunction the Note. The fair value of the Warrants on the issuance date was approximately $139,000 using the Black-Scholes Model, which was recorded as a discount with a corresponding credit to warrant liabilities.
During the year ended December 31, 2018 and 2017, the Company recognized interest expense of approximately $82,000 and $57,000 resulting from amortization of debt discount for the Notes, respectively. | |
[11] | On December 30, 2016, the Company entered into a note purchase agreement (the “Note”) with an individual investor for an aggregate principal amount of $3.3 million. The Note bore interest at 8% per annum with 18 months term. The Note carries an original issue discount of $300,000 and $10,000 legal cost that was reimbursable to the investor.
During the year ended December 31, 2018, the Company entered into multiple exchange agreement with the Note holder to convert approximately $1.7 million principal and $33,000 accrued interest into approximately 6.8 million shares of common stock at fair value of $1.8 million. The Company recorded approximately $0.1 million debt extinguishment loss from this conversion
During the year ended December 31, 2017, the Company entered into multiple exchange agreement with the Note holder to convert approximately $1.7 million principal and $0.2 million accrued interest into approximately 13.1 million shares of common stock at fair value of $2.7 million. The Company recorded approximately $0.8 million debt extinguishment loss from this conversion | |
[12] | On December 29, 2017, the Company entered into a promissory note agreement (the “Note”) with a third party for principal amount of $2.2 million. The Note bore interest at 8% per annum, and is payable upon demand. The Note was fully repaid in January 2018. | |
[13] | Related Party Notes
Goldman Notes
In 2017, Leslie J. Goldman, an officer of the Company, loaned the Company an aggregate amount of $1.3 million pursuant to certain Demand Promissory Note Agreements. On January 3, 2018, Mr. Leslie loaned the Company an additional $30,000 (collectively the “Goldman Notes”). Approximately $0.5 million of the Goldman Notes bear interest at the rate of 12% per annum, and $0.8 million of the Goldman Notes bear interest at the rate of 10% per annum.
During the year ended December 31, 2017, the Company made an aggregate principal payment of $1.2 million to settle some of Mr. Goldman’s outstanding demand notes, and an aggregate of $47,000 interest payment associated with these demand notes. Such payment included repayment of $0.3 million outstanding debt incurred during the year ended December 31, 2016.
During the year ended December 31, 2018, the Company made an aggregate principal payment of $0.4 million on the Goldman Notes.
The outstanding principal amount for the Goldman Notes was approximately $69,000 and $0.4 million as of December 31, 2018 and December 31, 2017, respectively.
There was approximately $73,000 accrued interest associated with the Goldman Notes which remained unpaid and due as of December 31, 2018.
Toucan Notes
In 2017, Toucan Capital Fund III loaned the Company an aggregate amount of $1.2 million pursuant to multiple Demand Promissory Notes (the “Toucan Notes”). The Toucan Notes bear interest at 10% per annum, and are payable upon demand, with 7 days’ prior written notice to the Company.
During the year ended December 31, 2017, the Company made an aggregate principal payment of approximately $0.8 million on the Toucan Notes.
During the year ended December 31, 2018, the Company made an aggregate principal payment of approximately $0.4 million on the Toucan Notes. In addition, the Company also made a partial interest payment of $18,000.
All principal was repaid as of December 31, 2018. There was approximately $46,000 remaining of unpaid interest as of December 31, 2018.
F-22
Board of Directors Notes
In 2017, Jerry Jasinowski, Robert Farmer and Cofer Black, members of the Company’s Board of Directors, loaned the Company an aggregate amount of $300,000 pursuant to multiple Demand Promissory Notes (the “Notes”). The Notes bear interest at 10% per annum, and are payable upon demand, with 7 days’ prior written notice to the Company.
On November 28, 2018, the Company made a partial payment of $40,000 to the Note held by Mr. Farmer.
The outstanding principal amount and accrued interest for the Notes as of December 31, 2018 were approximately $260,000 and $51,000, respectively.
The Notes were fully paid back in January 2019.
Advent BioServices Note
On September 26, 2018, Advent BioServices, a related party which was formerly part of Cognate BioServices and was spun off | |
[14] | These long-term secured convertible notes (the “Notes”) have a 3-year maturity and bear interest at 12% per annum. No interest will be payable during the term, but interest will accrue and be payable at maturity. The Notes are secured by the property owned by the Company in the U.K., and not by any other assets of the Company. The Notes and accrued interest will be convertible at any time during the term at fixed conversion prices: 50% of the principal and accrued interest will be convertible at $0.25 per share, 25% of the principal and accrued interest will be convertible at $0.50 per share and 25% of the principal and accrued interest will be convertible at $1.00 per share.
On December 14, 2018, upon the closing of sale of U.K. property (see note 6), the Company made full repayment on the Notes including outstanding interest of approximately $1.0 million. Additionally, the embedded conversion feature associated with the Notes, which had been revalued as of December 14, 2018 to approximately $2.0 million (see note 4), and the remaining unamortized debt discount were written off. The Company recorded approximately $0.7 million debt extinguishment gain. | |
[15] | On August 13, 2018, the Company entered into an 18 month Note with an institutional investor at a 5% annual interest rate for $1.0 million with principal and interest payable on the maturity date of January 13, 2020. Upon issuance of the Note, the investor received a 2-year, 50% warrant containing 833,333 exercise shares (the “Warrants”) at an exercise price of $0.60 per share. The Warrants had fair value of approximately $67,000 on the grant date, which was recorded as debt discount. The Note also includes a prepayment provision. | |
[16] | On August 13, 2018, the Company entered into a note purchase agreement (the “Note”) with an individual investor for an aggregate principal amount of $1,155,000. The Note bears interest at 8% per annum with a 2-year term. The Note carries an aggregated original issue discount of $150,000 and $5,000 for legal costs that were reimbursable to the investor.
During the year ended December 31, 2018, no repayments have been made on the Note. The remaining debt discount and accrued interest associated with the Note as of December 31, 2018 was $119,000 and $36,000, respectively | |
[17] | Between February 2018 and April 2018, the Company’s Chief Executive Officer, Linda Powers, loaned the Company aggregate funding of $5.4 million, and the Company entered into convertible note agreements for this amount (the “Convertible Notes”). The Convertible Notes bear interest rate at 10% per annum, and are repayable upon 15 days' notice from the holder (and in any event no later than five years from the date of the Convertible Notes). The principal and interest of the Convertible Notes are convertible into Series B Preferred Stock at conversion price of $2.30 per share, and each share of Series B Preferred Stock is convertible into 10 shares of common stock. Additionally, the Convertible Notes carry Class D-2 Warrants, with half of the Class D-2 Warrants due and issuable when the loan was provided, and half of the Class D-2 Warrants due on a proportional basis in the event of conversion of some or all of the Note. The Class D-2 Warrants have five-year term.
F-20
The Company issued 23.5 million Class D-2 Warrants with an exercise price of $0.30, including 11.7 million contingently issuable warrants, which will be issued upon Mrs. Powers conversion of the Convertible Notes. The fair value of the warrants was approximately $4.2 million, which was recorded as debt discount at the issuance date. The Company recorded $4.2 million interest expense as amortization on the debt discount immediately due to the term of the Convertible Notes, which are on demand. On November 11, 2018, the Company and Ms. Powers agreed to extend the notes to a maturity of one year following the respective funding dates. In consideration of the continuing forbearance, the Company will issue warrants representing 50% of the amounts due under the loans from Ms. Powers. The warrants will have an exercise price at $0.35 per share, and have an exercise period of 2 years. The accrued unpaid interest associated with the Convertible Notes was approximately $451,000 as of December 31, 2018. | |