Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 19. RELATED PARTY TRANSACTIONS

Convertible Notes

As discussed in Note 10, Convertible Notes, the Company carries Notes. The Schuler Family Foundation (the “Foundation”) purchased an aggregate of $30.0 million of the Notes in the March 2018 offering on the same terms as those under which other investors purchased the Notes, although no discount or commission in respect of such notes purchased by the Schuler Family Foundation was paid by the Company to the initial purchasers of the Notes. During 2019, the Foundation purchased an additional $12.0 million of Notes on the open market. Jack W. Schuler, a member of our Board, is the President of the Foundation.

During the three months ended September 30, 2021, the Foundation transferred by gift the $42.0 million aggregate principal amount of Notes held by the Foundation to the Schuler Initiative Supporting Charitable Trust

(the “Supporting Organization”), a tax-exempt organization that is not an affiliate of Jack W. Schuler.

In connection with the Exchange Transaction the Supporting Organization exchanged $42.0 million in aggregate principal amount of Notes held by it for 5,428,699 shares of the Company's common stock. Using the closing stock price on September 22, 2021 of $5.81, the 5,428,699 shares of the Company's common stock were determined to have a value of $31.5 million which was recorded to contributed capital for the three months ended September 30, 2021.

The Supporting Organization had the same or similar terms as the other counter parties. The Company determined the Exchange Transaction was in accordance with extinguishment accounting and was accounted for as an extinguishment of debt opposed to a capital transaction.

See Note 10, Convertible Notes and Note 17, Stockholders’ Equity, for additional information.

December 2020 Securities Purchase Agreement

On December 24, 2020, the Company entered into the December 2020 Securities Purchase Agreement with the Original Purchasers for the issuance and sale by the Company of the Shares. Additionally, on December 24, 2020, the Company entered into the Registration Rights Agreement with the Original Purchasers pursuant to which the Company agreed to register the resale of the Shares pursuant to the terms set forth therein. The Original Purchasers are comprised of certain directors and officers of the Company, or entities affiliated or related to such persons. See Note 17, Stockholders’ Equity, for further information.

On September 17, 2021, the Company entered into the Rescission Agreement with the Schuler Purchasers and the Schuler Trust, an entity affiliated with Jack W. Schuler, pursuant to which, effective as of January 29, 2021, the Company and the Schuler Purchasers agreed to rescind and unwind the December 2020 Securities Purchase Agreement and the Registration Rights Agreement for all legal, tax and financial purposes ab initio as if the related transactions, including the issuance and sale of an aggregate of 2,643,228 Shares in the first two tranche closings and the third tranche under the December 2020 Purchase Agreement, had never occurred with respect to the Schuler Purchasers and the Company. The Schuler Purchasers are related to Jack W. Schuler but are not affiliates of his. See Note 17, Stockholders’ Equity, for further information.

During the nine months ended September 30, 2021, the Company issued 201,820 Shares and received total proceeds of approximately $1.5 million under the December 2020 Securities Purchase Agreement after giving effect to the Rescission Agreement.

September 2021 Rescission Agreement

On September 22, 2021, the Company entered into the September 2021 Securities Purchase Agreement with the Schuler Purchasers for the issuance and sale by the Company of the Series A Preferred Shares. The Schuler Purchasers are related to Jack W. Schuler but are not affiliates of his. See Note 17, Stockholders’ Equity, for further information.

For the nine months ended September 30, 2021, the Company issued 2,643,228 Series A Preferred Shares and received total proceeds of approximately $20.3 million under the September 2021 Securities Purchase Agreement.

On October 29, 2021, the Company closed the final second tranche in connection with the September 2021 Securities Purchase Agreement and received total proceeds of approximately $10.2 million. See Note 20, Subsequent Events for additional information.