Our long-term debt primarily consists of notes payable associated with Promissory Note One and our 2021 Term Loan which is described in further detail below. Long-term notes payable were as follows (in thousands):


	June 30, 2022			December 31, 2021
Promissory Note One	$	16,164		$	—
2021 Term Loan		7,000			10,000
Other		153			75
Unamortized debt discount and issuance costs		(2,950	)		(63	)
		20,367			10,012
Less: current maturities		11,771			19
Long-term notes payable	$	8,596		$	9,993

On May 9, 2022 (the First Closing Date), the Company entered into a securities purchase agreement (the SPA) with Streeterville Capital, LLC (Lender), pursuant to which, among other things, the Lender: (i) purchased a secured promissory note (Promissory Note One) in the aggregate principal amount totaling $16.0 million in exchange for $15.0 million less certain expenses and (ii) agreed to purchase another secured promissory note at the Company’s election (Promissory Note Two and, together with Promissory Note One, the Promissory Notes), subject to certain conditions precedent in aggregate principal amount totaling $10.3 million in exchange for $10.0

million in cash proceeds. Each of the Promissory Notes may, at the Company's option, be settled in shares of common stock of the Company (the Common Stock), upon the terms and subject to the limitations and conditions set forth in the Promissory Notes. The Company's net proceeds from the issuance of Promissory Note One were approximately $12.8 million, after deducting debt issuance costs and original issue discount (OID). The Company intends to use the proceeds from such issuance for general corporate purposes.

The Promissory Notes have a stated interest rate of 6% per annum. The maturity date of each Promissory Note is 24 months from the issuance date of such Note (the Maturity Date). Promissory Note One was issued with an OID of $1.0 million while Promissory Note Two, if issued, will be subject to an OID of $0.3 million subject to certain contingencies which could increase the OID by an additional $0.5 million. The Promissory Notes are eligible for early payment for cash, at the Company’s election, subject to a prepayment premium of 10% of the outstanding principal balance.

The Company’s ability to draw Promissory Note Two is subject to the satisfaction, among other things, of the following conditions: (i) within nine months following the First Closing Date, repayment in full all outstanding obligations under the 2021 Term Loan, (ii) the Company shall have received no less than $5.6 million in proceeds from the sale (not attributable to Lender or its affiliates) of newly issued equity securities during the period beginning on the First Closing Date and ending on January 31, 2023 (the Second Closing Date), (iii) on or before the Second Closing Date, the Company shall have met or exceeded Revenue Milestone 1 (as defined in the Promissory Notes), (iv) (a) the aggregate market value of the Company’s common stock and any other equity securities held by persons that are not affiliates of the Company on the Second Closing Date shall be greater than or equal to $75.0 million or (b) received no less than $20.0 million in additional proceeds from the sale (not attributable to Lender or its affiliates) of new equity securities in the Company not counting those proceeds set forth in item (ii) above (for total proceeds of no less than $25.6 million during the period beginning on the First Closing Date and ending on the Second Closing Date; (v) as of the Second Closing Date, Company is in good standing with Nasdaq Stock Market (the NASDAQ) and has not received any notice of non-compliance; (vi) Company shall be current in its payments to Indi, and (vii) there being no Trigger Event (as defined in the Promissory Notes) under Promissory Note One. If Promissory Note Two is issued, the terms of Promissory Note One and Note Two will be substantively identical.

Under the SPA, the parties provided customary representations and warranties to each other. Also, until all amounts due under the Promissory Notes are paid in full, the Company agreed, among other things, to: (i) timely make all filings under the Securities Exchange Act of 1934, (ii) ensure that its Common Stock continues to be listed on the NASDAQ or the New York Stock Exchange, (iii) not enter into any agreement or otherwise agree to any covenant, condition, or obligation that locks up, restricts in any way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Lender or any affiliate of Lender, or (b) from issuing Common Stock, preferred stock, warrants, convertible notes, other debt securities, or any other Company securities to Lender or any affiliate of Lender, (iv) will not make any Restricted Issuances (as defined in the Promissory Notes) without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole and absolute discretion (v) within 9 months following the First Closing Date, the Company will repay in full all outstanding obligations under the 2021 Term Loan, (vi) beginning on April 1, 2023, Company shall maintain a minimum liquidity balance of at least $3.0 million (which liquidity balance shall only include cash, cash equivalents and accounts receivable), and (vii) offer the Lender the right to purchase up to 30% of future equity and debt securities offerings, subject to certain exceptions and limitations. The Company also agreed under the SPA to reserve with the Company’s transfer agent 37.0 million shares of Common Stock for potential issuance under the Promissory Notes for shares that may be delivered in connection with the redemption right, which reservation may be increased and decreased in certain circumstances.

Beginning on the date that is nine months after the issuance date of the applicable Promissory Note, the Lender has the right to redeem up to $1.4 million and $1.0 million of the outstanding balance of Promissory Note One and Promissory Note Two per month, respectively. Payments may be made by the Company, at the Company’s option, either in (a) in cash, or (b) in the form of shares of Common Stock with the number of redemption shares being equal to the portion of the applicable redemption amount divided by the Redemption Conversion Price or (c) a combination of cash and shares of Common Stock. The Promissory Notes have a 6% exit fee on any redemption amount paid in cash. The Redemption Conversion Price shall equal 85% multiplied by the lowest daily VWAP during the ten trading days immediately preceding the date the Lender delivers notice electing to redeem a portion of the Promissory Note. The Company’s right to satisfy the redemption amount in shares of Common Stock is subject to certain limitations, including (i) there not being any Equity Conditions Failure (as defined in the Note), (ii) the Lender and its affiliates together not owning more than 9.99% of the outstanding shares of Common Stock, and (iii) the aggregate shares of Common Stock issued upon redemption of the Promissory Notes not exceeding 19.99% of the outstanding Common Stock unless the Company has obtained stockholder approval under NASDAQ rules for such issuance.

The Promissory Notes contain certain Trigger Events that generally, if uncured within five trading days, may result in an event of default in accordance with the terms of the Promissory Notes (such event, an Event of Default). Upon an Event of Default, the interest rate may also be increased to the lesser of 15% per annum or the maximum rate permitted under applicable law.

The Company evaluated Promissory Note One in accordance with applicable accounting standards under U.S. GAAP and determined the classification of the instrument as a debt obligation. In addition, the Company evaluated the instrument for embedded derivatives

and concluded there were no embedded features that require bifurcation and separate accounting. The Company will record interest expense over the term of Promissory Note One, using the interest method, to amortize the debt issuance costs and OID.

On May 9, 2022, the Company recorded OID and debt issuance costs of $3.2 million as a reduction to Promissory Note One to be amortized over the term of Promissory Note One. For the period from May 9, 2022 to June 30, 2022, the Company recorded $0.3 million for amortization of the OID and debt issuance costs to interest expense in the accompanying statements of operations.

For the period from May 9, 2022 to June 30, 2022, the Company recorded interest expense of $0.1 million in the accompanying statements of operations and as of June 30, 2022, recorded $0.1 million in accrued interest in 'Current portion of notes payable' in the accompanying balance sheets.

On March 19, 2021 (Effective Date), the Company entered into a Loan and Security Agreement (the 2021 Term Loan) by and between Silicon Valley Bank, a California corporation (SVB or Lender) and the Company, as borrower, whereby subject to the terms and conditions of the 2021 Term Loan, SVB advanced to the Company an original principal amount of $30 million.

The 2021 Term Loan provides for an “interest-only” period from the Effective Date through February 28, 2023, with interest due and payable monthly on the first calendar day of each month. However, the Company achieved a revenue milestone of at least $65 million on a trailing twelve-month basis during the three months ended March 31, 2021 which automatically extended the interest-only period through February 28, 2024. Beginning on the first calendar day of the month following the end of the interest-only period, the 2021 Term Loan shall be payable in (i) consecutive equal installments of principal through March 1, 2026, plus (ii) monthly payments of accrued interest. The principal amount outstanding under the 2021 Term Loan shall accrue interest at a floating per annum rate equal to the greater of (i) 2.00% above the prime rate, or (ii) 5.25%, which interest, in each case, shall be payable monthly. Changes to the interest rate applicable to the 2021 Term Loan based on changes to the prime rate shall be effective on the effective date of any change to the prime rate.

The Company has the option to prepay, prior to maturity, the total outstanding principal amount plus accrued and unpaid interest, subject to a prepayment penalty of 3% of the principal amount if paid prior to the first anniversary of the Effective Date, 2% of the principal amount if paid on or after the first anniversary but prior to the second anniversary of the Effective Date, 1% of the principal amount if paid on or after the second anniversary but prior to October 19, 2025, and 0% thereafter.

The Company granted the Lender a security interest in substantially all of the Company’s assets. The 2021 Term Loan requires the Company to comply with a minimum liquidity ratio covenant (as defined) by the 2021 Term Loan of not less than 0.95 to 1.00, and had a trailing six month rolling minimum revenue requirement of not less than 70% of the Company’s projected revenue performed at the end of each reporting period. On September 30, 2021, we entered into the Consent and First Amendment to Loan and Security Agreement (the 2021 Term Loan Amendment) to, among other things, amend our 2021 Term Loan to eliminate the revenue covenant for the period ended September 30, 2021 and modify the revenue covenant threshold for the three months ended December 31, 2021. In addition, we agreed to establish a restricted cash collateral account for $15 million for the benefit of our lender if the balance of our cash and cash equivalents declined below $40 million. On December 31, 2021, we entered into the Consent and Second Amendment to Loan and Security Agreement (the 2021 Term Loan Second Amendment) to, among other things, amend our 2021 Term Loan and First Amendment to: (i) obtain consent for the $4.6 million January 2022 milestone payment under the Indi APA, (ii) repay $20 million in outstanding principal on December 31, 2021, (iii) waive the $600,000 prepayment fee on the $20 million Term Loan repayment, (iv) waive the minimum revenue covenant as of December 31, 2021, and (v) modify the minimum revenue requirement to not less than 75% for the three months ended March 31, 2022 and not less than 75% on a trailing six month rolling basis for each quarter thereafter of the Company’s projected revenue performed at the end of each reporting period. The Lender agreed to apply the full amount of funds previously established within the restricted cash collateral account to partially repay the $20 million in outstanding principal, thereby eliminating the restricted cash collateral account.

On April 7, 2022, the Company entered into the Consent and Third Amendment to Loan and Security Agreement (the 2021 Term Loan Third Amendment). Under the terms of the 2021 Term Loan Third Amendment, the Company agreed to the repayment of $3.0 million in outstanding principal in April 2022 with an additional $2.0 million to be paid on September 30, 2022, in exchange for: (i) consent for a $2.0 million April 2022 milestone payment under the Indi APA, as amended, (ii) waiver of minimum revenue requirement for the three months ended March 31, 2022 and adjustment of remaining revenue milestones for 2022, and (iii) waiver and elimination of the prepayment fee on the $3.0 million 2021 Term Loan partial repayment in April 2022 and subsequent $2.0 million principal repayment. The Company recorded a loss on extinguishment of $18,000 resulting from the write-off of debt issuance costs associated with the $3.0 million repayment of our 2021 Term Loan in April 2022.

In association with entering into the SPA with the Lender on May 9, 2022 (as described above), the Company has the election to issue Promissory Note Two subject to the Company satisfying, among other things, repaying in full all outstanding obligations under the 2021

Term Loan within nine months following the First Closing Date. As of June 30, 2022, the Company intends to repay all outstanding obligations under the 2021 Term Loan within nine months of the inception of Promissory Note One. The Company’s final payment to SVB shall include all outstanding principal and accrued and unpaid interest, lender fees and expenses, which will include a final payment of $2.7 million, and all other sums, if any, that shall have become due and payable hereunder with respect to the 2021 Term Loan. The $2.7 million final payment is being amortized as interest expense over the expected remaining term of the loan.

The 2021 Term Loan contains certain covenants limiting the ability of the Company to, among other things, incur future debt, transfer assets except for the ordinary course of business, make acquisitions, pay dividends or make other certain restricted payments, or sell assets, subject to certain exceptions, without the prior written consent of the Lender. Failure to comply with the covenants and loan requirements may result in an event of default. As of June 30, 2022, the Company was in compliance with all restrictive and financial covenants associated with its borrowings. In the event of a default, including, among other things, our failure to make any payment when due or our failure to comply with any covenant under the 2021 Term Loan, the Lender may elect to declare all amounts outstanding to be immediately due and payable, and may proceed against the collateral granted to them to secure such indebtedness, including a royalty-free license or other right to use all of our intellectual property without charge.

Scheduled principal repayments (maturities) of long-term obligations were as follows (in thousands):


	As of June 30, 2022
Remainder of 2022	$	7,023
2023		14,616
2024		1,647
2025		25
2026		6
2027 and thereafter		—
Total	$	23,317