CONVERTIBLE NOTES

6 Months Ended

Jun. 30, 2021

LONG-TERM DEBT [Abstract]

CONVERTIBLE NOTES

4. CONVERTIBLE NOTES

Convertible Bridge Notes.

On April 20, 2018, the Company entered into a securities purchase agreement (the “2018 Note Agreement”) with certain investors, as amended on November 29, 2018 (the “Amendment Agreement”) and amended on April 16, 2019 (“Amendment No.2 Agreement”). The Company also entered into a securities purchase agreement on May 14, 2019. In connection with these securities purchase agreements, the Company issued Senior Secured Convertible Promissory Notes (the “Bridge Notes”) along with warrants during 2018 and 2019.

On March 26, 2020, the Company entered into an amendment agreement (the “March 2020 Amendment”) amending the terms of that certain Amendment No. 2 Agreement dated April 16, 2019 and the securities purchase agreement dated May 14, 2019.  As a result of the March 2020 Amendment, (i) the maturity date of the Bridge Notes issued in April 2019 (the “April 2019 Bridge Notes”) and the Bridge Notes issued in May 2019 (the “May 2019 Bridge Notes”) was extended three months from April 16, 2020 to July 16, 2020, (ii) the floor price at which conversions may

occur under the April 2019 Bridge Notes and the May 2019 Bridge Notes was amended from $2.25 to $0.40, and (iii) guaranteed interest on the April 2019 Bridge Notes and the May 2019 Bridge Notes was amended from twelve months to eighteen months.

The Company reviewed the modifications and concluded that the March 2020 Amendment would be treated as an extinguishment of the related April 2019 Bridge Notes and May 2019 Bridge Notes. As a result, the Company recorded a debt premium on the post-modification debt of $0.8 million and a loss on extinguishment of convertible notes of $1.2 million in the condensed consolidated statements of operations during the six months ended June 30, 2020.

During the three and six months ended June 30, 2020, $1.8 million and $2.2 million, respectively, of bridge notes, plus interest, were converted into 3,480,148 and 3,908,145 shares of common stock of the Company, respectively.

During the three and six months ended June 30, 2020, the change in Bridge Note debt discounts and debt premiums was as follows:

(Dollars in thousands)	For the Three Months Ended June 30,
	2020
		Debt Discounts		Debt Premiums
Beginning balance at April 1	$	—	$	679
Deductions:
Amortization (accretion) (1)		—		(346)
Write-off related to note conversions (2)		—		(333)
Balance at June 30	$	—	$	—

	For the Six Months Ended June 30,
	2020
		Debt Discounts		Debt Premiums
Beginning balance at January 1	$	(1,796)	$	—
Additions:		—		793
Deductions:
Amortization (accretion) (1)		703		(385)
Write-off related to note conversions (2)		138		(408)
Write-off related to note extinguishment (3)		955		—
Balance at June 30	$	—	$	—

(1) Amortization/accretion is recognized as interest expense/income within the condensed consolidated statements of operations based on the effective interest method.

(2) Write-offs associated with note conversions are recognized as an offset to additional paid-in capital at the time of the conversion.

(3) Write-offs associated with note extinguishment are recognized as a loss and included in loss on extinguishment of convertible notes in the condensed consolidated statements of operations.

There were zero convertible notes outstanding at June 30, 2021 and December 31, 2020, respectively.