Secured Note Payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Secured Note Payable

Note 10 – Secured Note Payable

On March 27, 2018, the Company entered into a Secured Promissory Note Agreement (the “Secured Note”) with Tech Capital for a principal amount of $1,187,000. As of September 30, 2019, the principal balance of the Secured Note was approximately $879,000. The Company used the proceeds from the Secured Note to repay the Company’s 11% unsecured promissory notes issued in June 2016 pursuant to the Note and Warrant Agreement (see Note 11 – Unsecured Promissory Notes and Warrants).

The Secured Note has a maturity date of April 1, 2023. The unpaid principal balance accrues interest at a rate of 8% per annum. Principal and interest payments are due on the first day of each month commencing on May 1, 2018. The Secured Note is subject to the terms and conditions of and is secured by security interests granted by the Company in favor of Tech Capital under the Loan Agreement (see Note 9 – Secured Revolving Credit Facility). An event of default under such Loan Agreement will be an event of default under the Secured Note and vice versa. In the event the principal balance under the Loan Agreement is due, all amounts due under the Secured Note will also be due.

During the three and nine months ended September 30, 2019, the Company made payments under the Secured Note of approximately $73,000 and $217,000, respectively. Included in the total payments made, approximately $18,000 and $58,000 was recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2019, respectively. During the three and nine months ended September 30, 2018, the Company made payments under the Secured Note of approximately $72,000 and $144,000, respectively. Included in the total payments made, approximately $22,000 and $45,000, respectively, were recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2018.

Debt issuance costs of approximately $6,000 were recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2018.

As of September 30, 2019, future principal maturities are as follows:

2019 (excluding the nine months ended September 30, 2019)	$	55,000
2020		231,000
2021		251,000
2022		271,000
2023		71,000
Total	$	879,000