AMORTIZATION OF DEBT DISCOUNT OF SECURED PROMISSORY NOTES

3 Months Ended

Mar. 31, 2022

Amortization Of Debt Discount Of Secured Promissory Notes

AMORTIZATION OF DEBT DISCOUNT OF SECURED PROMISSORY NOTES

12. AMORTIZATION OF DEBT DISCOUNT OF SECURED PROMISSORY NOTES

On December 30, 2021, the Company entered into a securities purchase agreement with certain sophisticated investors providing for the issuance of:

· secured promissory notes (the “Secured Promissory Notes”) that bear interest at 8% per annum with an aggregate principal face amount of approximately $66 million including a 10% original issue discount;

· five-year warrants to purchase an aggregate of 14,095,350 shares of the Company’s common stock at an exercise price of $2.50, subject to adjustment; and

· five-year warrants to purchase an aggregate of 1,942,508 shares of Common Stock (the “Class B Warrant Shares”) at an exercise price of $2.50 per share, subject to adjustment. The Class B Warrant Shares are deemed to be a derivative instrument.

As of December 31, 2021, unamortized debt discount on the Secured Promissory Notes related to the original issue discount and estimated fair value of the warrants totaled $26.3 million.

During the three months ended March 31, 2022, the Secured Promissory Notes were repaid and the Company fully amortized the related debt discount of $26.3 million, which is included within interest expense on the condensed consolidated statements of operations.