Convertible Note	12 Months Ended
Dec. 31, 2019
Convertible Note
Convertible Note	Note 10. Convertible Note On December 14, 2018, we entered into a Securities Purchase and Registration Rights Agreement (the “SPA”) with Petrichor Opportunities Fund I LP (the “Investor”) in connection with (i) the issuance and sale of 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Investment Shares”), at a price equal to $10.00 per share and (ii) the issuance of a $15,000,000 floating rate convertible note (the “Note”) of the Company, with such Note convertible on the terms stated therein into shares of Common Stock (the “Note Shares”) (together, the “Transaction”). In connection with the Transaction, the Company paid Petrichor Opportunities Fund I LP a commitment fee of $250,000 on the aggregate total purchase price for the Transaction. The Note was the senior unsecured obligation of the Company. The original maturity of the Note was December 14, 2023. The Note accrued interest at a rate equal to the greater of (a) three-month London Interbank Offered Rate (LIBOR) or (b) two percent, plus the applicable margin of six percent on the outstanding balance of the Note, payable quarterly on the first business day of each calendar quarter. Prior to the maturity, a holder of the Note had the right to convert all or any portion of the Note, including any accrued but unpaid interest, into shares of Common Stock at a conversion price of $13.11 per share (the “Conversion Price”), subject to certain adjustments as set forth in the Note. The Company determined that the Note’s conversion option included a down round price protection feature which triggers upon the occurrence of a future event. If, at any time on or prior to December 14, 2021, the volume-weighted average price of the Common Stock exceeds $17.48 for 15 consecutive trading days and certain additional conditions are satisfied, the Note automatically converts into shares of Common Stock at the Conversion Price, subject to certain conditions. At any time after June 14, 2019, the Company had the right to redeem all, but not less than all, of the outstanding Note for cash prior to the Maturity Date, at a redemption premium on such amount as follows: (a) prior to December 14, 2019, 112%; (b) after December 14, 2019 but on or prior to December 14, 2020, 109%; and (c) after December 14, 2020, 106% (the “Redemption Premium”). Upon the occurrence of certain events of default as set forth in the Note (other than events of default relating to bankruptcy, insolvency, reorganization or liquidation proceedings) or a change of control, a holder of the Note may require the Company to redeem all or any portion of its Note at the applicable Redemption Premium. If certain events of default relating to bankruptcy, insolvency, reorganization or liquidation proceedings occur, all outstanding principal and accrued and unpaid interest (plus any accrued and unpaid late charges) would automatically become due and payable at the applicable Redemption Premium. The Note contained certain covenants and restrictions, including, among others, that, for so long as the Note was outstanding, the Company would not incur any indebtedness (other than permitted indebtedness under the Note), permit liens on its properties (other that permitted liens under the Note), make payments on junior securities, make dividends or transfer certain assets or permit its unrestricted cash to be less than a minimum amount. Pursuant to the SPA, the Company agreed to register the Investment Shares and the Note Shares by filing a registration statement with the SEC by the 45th calendar day after the closing date of the Transaction. The registration statement was filed on January 28, 2019 and was declared effective by the SEC on February 14, 2019. The issuance costs for this Transaction, including the commitment fee paid to the Investor totaled approximately $480,000. As these costs were incurred to raise both debt and equity, the total costs were allocated on a pro-rata basis to the debt and equity financings based on their relative fair values. The pro-rata portion of these fees related to the Note were originally amortized over the five-year stated life of the Note. On July 9, 2019, the Company entered into Amendment No. 1 to the Note. Pursuant to the amendment, the terms of the Note were amended such that (i) after June 30, 2019, the interest rate on the Note was reduced to 6.00%; (ii) after June 30, 2019, accrued interest on the Note was converted into common stock of the Company in connection with any conversion of the Note, provided that solely with respect to such accrued but unpaid interest, the conversion price will be an amount equal to the average volume-weighted average price of the Company's common stock for the 15 consecutive trading days prior to the conversion date; (iii) the mandatory conversion date is December 14, 2019; (iv) the maximum percentage provisions relating to a mandatory conversion of the Note were removed; (v) the Note was no longer required to be senior to any other indebtedness of the Company and its subsidiaries; and (vi) the limitation on the Company and its subsidiaries from incurring indebtedness was removed. We accounted for Amendment No. 1 to the Note as a modification of debt because the cash flows under the amended term loans were not substantially different than the cash flows under the original term loans. Accordingly, a new effective interest that equates the revised cash flows to the carrying amount of the original debt was computed and was being applied prospectively. We did not incur any fees to the Investor in connection with the amended term loan. The unamortized debt discount was being amortized over the remaining term of the Note using the effective interest method. On December 14, 2019, the outstanding original principal under the Note of $15,000,000 and the accrued interest of $417,500 was converted into 1,172,305 shares of common stock of the Company as a result of a mandatory conversion under the terms of the Note. Pursuant to the terms of the Note, the outstanding principal converted into common stock of the Company at a rate of $13.11 per share and the accrued interest converted into common stock of the Company at a rate of approximately $14.837 per share, which was the average volume-weighted average price of the Company's common stock for the 15 consecutive trading days prior to the conversion date. During the year ended December 31, 2019, the Company amortized $288,420 of the debt discount to interest expense. Interest expense was $1.1 million and $66,000 for the years ended December 31, 2019 and 2018, respectively. Included in accounts payable and other accrued expenses in the accompanying consolidated balance sheets is $0 and $66,000 of accrued interest as of December 31, 2019 and 2018, respectively.

Note 10. Convertible Note

On December 14, 2018, we entered into a Securities Purchase and Registration Rights Agreement (the “SPA”) with Petrichor Opportunities Fund I LP (the “Investor”) in connection with (i) the issuance and sale of 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Investment Shares”), at a price equal to $10.00 per share and (ii) the issuance of a $15,000,000 floating rate convertible note (the “Note”) of the Company, with such Note convertible on the terms stated therein into shares of Common Stock (the “Note Shares”) (together, the “Transaction”). In connection with the Transaction, the Company paid Petrichor Opportunities Fund I LP a commitment fee of $250,000 on the aggregate total purchase price for the Transaction.

The Note was the senior unsecured obligation of the Company. The original maturity of the Note was December 14, 2023. The Note accrued interest at a rate equal to the greater of (a) three-month London Interbank Offered Rate (LIBOR) or (b) two percent, plus the applicable margin of six percent on the outstanding balance of the Note, payable quarterly on the first business day of each calendar quarter.

Prior to the maturity, a holder of the Note had the right to convert all or any portion of the Note, including any accrued but unpaid interest, into shares of Common Stock at a conversion price of $13.11 per share (the “Conversion Price”), subject to certain adjustments as set forth in the Note. The Company determined that the Note’s conversion option included a down round price protection feature which triggers upon the occurrence of a future event. If, at any time on or prior to December 14, 2021, the volume-weighted average price of the Common Stock exceeds $17.48 for 15 consecutive trading days and certain additional conditions are satisfied, the Note automatically converts into shares of Common Stock at the Conversion Price, subject to certain conditions.

At any time after June 14, 2019, the Company had the right to redeem all, but not less than all, of the outstanding Note for cash prior to the Maturity Date, at a redemption premium on such amount as follows: (a) prior to December 14, 2019, 112%; (b) after December 14, 2019 but on or prior to December 14, 2020, 109%; and (c) after December 14, 2020, 106% (the “Redemption Premium”).

Upon the occurrence of certain events of default as set forth in the Note (other than events of default relating to bankruptcy, insolvency, reorganization or liquidation proceedings) or a change of control, a holder of the Note may require the Company to redeem all or any portion of its Note at the applicable Redemption Premium. If certain events of default relating to bankruptcy, insolvency, reorganization or liquidation proceedings occur, all outstanding principal and accrued and unpaid interest (plus any accrued and unpaid late charges) would automatically become due and payable at the applicable Redemption Premium.

The Note contained certain covenants and restrictions, including, among others, that, for so long as the Note was outstanding, the Company would not incur any indebtedness (other than permitted indebtedness under the Note), permit liens on its properties (other that permitted liens under the Note), make payments on junior securities, make dividends or transfer certain assets or permit its unrestricted cash to be less than a minimum amount.

Pursuant to the SPA, the Company agreed to register the Investment Shares and the Note Shares by filing a registration statement with the SEC by the 45th calendar day after the closing date of the Transaction. The registration statement was filed on January 28, 2019 and was declared effective by the SEC on February 14, 2019.

The issuance costs for this Transaction, including the commitment fee paid to the Investor totaled approximately $480,000. As these costs were incurred to raise both debt and equity, the total costs were allocated on a pro-rata basis to the debt and equity financings based on their relative fair values. The pro-rata portion of these fees related to the Note were originally amortized over the five-year stated life of the Note.

On July 9, 2019, the Company entered into Amendment No. 1 to the Note. Pursuant to the amendment, the terms of the Note were amended such that (i) after June 30, 2019, the interest rate on the Note was reduced to 6.00%; (ii) after June 30, 2019, accrued interest on the Note was converted into common stock of the Company in connection with any conversion of the Note, provided that solely with respect to such accrued but unpaid interest, the conversion price will be an amount equal to the average volume-weighted average price of the Company's common stock for the 15 consecutive trading days prior to the conversion date; (iii) the mandatory conversion date is December 14, 2019; (iv) the maximum percentage provisions relating to a mandatory conversion of the Note were removed; (v) the Note was no longer required to be senior to any other indebtedness of the Company and its subsidiaries; and (vi) the limitation on the Company and its subsidiaries from incurring indebtedness was removed. We accounted for Amendment No. 1 to the Note as a modification of debt because the cash flows under the amended term loans were not substantially different than the cash flows under the original term loans. Accordingly, a new effective interest that equates the revised cash flows to the carrying amount of the original debt was computed and was being applied prospectively. We did not incur any fees to the Investor in connection with the amended term loan. The unamortized debt discount was being amortized over the remaining term of the Note using the effective interest method.

On December 14, 2019, the outstanding original principal under the Note of $15,000,000 and the accrued interest of $417,500 was converted into 1,172,305 shares of common stock of the Company as a result of a mandatory conversion under the terms of the Note. Pursuant to the terms of the Note, the outstanding principal converted into common stock of the Company at a rate of $13.11 per share and the accrued interest converted into common stock of the Company at a rate of approximately $14.837 per share, which was the average volume-weighted average price of the Company's common stock for the 15 consecutive trading days prior to the conversion date. During the year ended December 31, 2019, the Company amortized $288,420 of the debt discount to interest expense.

Interest expense was $1.1 million and $66,000 for the years ended December 31, 2019 and 2018, respectively. Included in accounts payable and other accrued expenses in the accompanying consolidated balance sheets is $0 and $66,000 of accrued interest as of December 31, 2019 and 2018, respectively.