Notes Payable

3 Months Ended

Mar. 31, 2022

Notes Payable [Abstract]

Notes Payable

8. Notes payable

The following two tables summarize outstanding notes payable as of March 31, 2022 and December 31, 2021 (dollars in thousands):

As of 03/31/2022 (dollars in thousands)	Maturity Date	Interest Rate			Conversion Price		Principal			Remaining Debt Discount			Remaining Embedded Conversion Option			Carrying Value
Senior secured promissory note payable, in default	In default		20.50	%		n/a	$	18,000			(6,106	)		-		$	11,894
Convertible promissory notes payable, in default:
Total convertible promisory notes payable, in default	In default		15.40	%	$	0.1058		6,445			(488	)		4,575			10,532
Convertible promissory notes payable, related parties, in default:
Total convertible promisory notes payable, related parties, in default	In default		14.0	%	$	0.10		1,596			-			-			1,596
SBA loan #2	February 20, 2026		1.00	%		n/a		1,033			-			-			1,033
Advances on future cash receipts	June 13, 2022		n/a			n/a		925			(509	)		-			416
Total debt outstanding, including amounts in default								27,999			(7,103	)		4,575			25,471
Less:  current maturities, including notes in default								(27,192	)		7,103			(4,575	)		(24,664	)
Total long-term debt as of March 31, 2022							$	807		$	-		$	-		$	807

As of 12/31/2021 (dollars in thousands)	Maturity Date	Interest Rate			Conversion Price		Principal			Remaining Debt Discount			Remaining Embedded Conversion Option			Carrying Value
Senior secured promissory note payable, in default	In default		20.25	%		n/a	$	15,000			(3,414	)		-		$	11,586
Convertible promissory notes payable, in default:
Total convertible promisory notes payable, in default	In default		15.40	%	$	0.1071		6,445			(1,099	)		6,255			11,601
Convertible promissory notes payable, related parties, in default:
Total convertible promisory notes payable, related parties, in default	In default		14.0	%	$	0.10		1,596			-			-			1,596
SBA loan #2	February 20, 2026		1.00	%		n/a		1,033			-			-			1,033
Advances on future cash receipts	March 11, 2022		n/a			n/a		1,500			(1,054	)		-			446
Total debt outstanding, including amounts in default								25,574			(5,567	)		6,255			26,262
Less:  current maturities, including notes in default								(24,699	)		5,567			(6,255	)		(25,387	)
Total long-term debt as of December 31, 2021							$	875		$	-		$	-		$	875

Senior secured promissory note payable, in default (“Senior Secured Note”) - On February 25, 2022, the Company entered into a Note Extension with NH Expansion Credit Fund Holdings LP. The amount of the note was $3.0 million, with an interest rate of 20.5% and matures on September 30, 2025. Because the combined fair value of the applicable warrants and common stock issued as part of this note exceeded the face value of the note, the additional amount beyond the face value is recorded as a loss on issuance of $3.4 million.

Embedded Conversion Option Liability

The fair value of Conversion Option liability was determined by using a binomial pricing model:

	At 03/31/2022			At 12/31/2021
Conversion Price(1)	$	0.11		$	0.11
Interest Rate (annual) (2)		0.15	%		0.18	%
Volatility (annual) (3)		185.75	%		289.65	%
Time to Maturity (Years)		0.26			0.50

(1) Based on the terms provided in the warrant agreement to purchase common stock of the Company as of March 31, 2022 and December 31, 2021.

(2) Interest rate for U.S. Treasury Bonds, as of each presented period ending date, as published by the U.S. Federal Reserve.

(3) Based on the historical daily volatility of the Company as of each presented period ending date.