Notes Payable

6 Months Ended

Jun. 30, 2023

Notes Payable [Abstract]

Notes Payable

Note 7 — Notes Payable

In connection with the ENTADFI® APA (see Note 5), the Company executed three non-interest bearing notes payable (the “Notes”) in the principal amounts of $4.0 million, $5.0 million and $5.0 million with maturity dates of September 30, 2023, April 19, 2024, and September 30, 2024, respectively. No principal payments are due until maturity; however, the Company may voluntarily prepay the Notes with no penalty. Additionally, in an Event of Default, as defined in the Notes, the unpaid principal amount of the Notes will accrue interest at a rate of 10.0% per annum. On September 29, 2023, the Company and the note holder entered into an amendment to the ENTADFI® APA, which modified the payment terms of the Note due on September 30, 2023 (see Note 15).

The Company imputed interest on the Notes using an average discount rate of 8.2% and recorded a debt discount of approximately $1.1 million at the issuance date. The debt discount is reflected as a reduction in the carrying amount of the Notes and amortized to interest expense through the respective maturity dates, using the effective interest method. The Company recorded approximately $0.2 million of associated interest expense during the three and six months ended June 30, 2023.

Future minimum principal payments on the Notes are as follows, for years ending December 31, excluding the impact of the modified payment terms discussed above (see Note 15):

2023 (remaining 6 months)	$	4,000,000
2024		10,000,000
Total principal payments		14,000,000
Less debt discount		(839,005	)
Total debt, net of discount	$	13,160,995