Term Loan for Equipment
In September 2019, the Company financed a scanner purchase for $79 thousand. The loan term was 24 months, and the interest rate was 6.9%.
In March 2020, the Company financed a machine tool purchase for $50 thousand. The loan term was 36 months, and the interest rate was 8.1%. Both loans principal and interest are payable on a monthly basis. In July 2021, the Company fully
paid off both loans balances. The term loans balances as of September 30, 2021 and December 31, 2020 were $0 and $67 thousand, respectively.
Payroll Protection Program Loan
On April 19, 2020, the Company entered into an unsecured promissory note under the Payroll Protection Program (the PPP
Loan) with a bank under the PPP administered by the United States Small Business Administration (SBA). The principal amount of the PPP Loan was $936 thousand. The PPP Loan bore interest of 1.0% per annum
and was disbursed to the Company on April 20, 2020. The PPP Loan had a maturity date of April 20, 2022. Under the terms of the PPP, the Company could apply for, and be granted, forgiveness for all or a portion of the PPP
Loan. Such forgiveness would be determined based on the use of the loan proceeds for eligible purposes within the first twenty-four weeks from the loan date. If at least 60% of the loan proceeds was used for payroll costs, then the entire loan would
be forgiven. The remaining 40% of the loan proceed could be used for mortgage interest, rent, utility costs and the maintenance of employee and compensation levels. In July 2021, the Company applied for and received forgiveness on the
$936 thousand PPP Loan plus $12 thousand in accrued interest. The gain on extinguishment of debt of $948 thousand is recorded within other income (expense), net in the Companys Condensed Statements of Operations and
Comprehensive Loss for the three and nine months ended September 30, 2021.
Notes Payable
In 2018, the Company entered into a $1,000 thousand note payable with a bank that is secured by all property of the Company, except for
its intellectual property. The original maturity date of the note was July 1, 2021 but was modified and extended to January 1, 2022 under a Deferral Agreement (Deferral Agreement) entered into in April 2020.
In March 2020, the Company amended the note payable and borrowed an additional $4,000 thousand. The additional $4,000 thousand
borrowing changed the present value of cash flows by more than 10% and, as such, was treated as a debt extinguishment. The Company recognized a $62 thousand loss on extinguishment of debt for the year ended December 31, 2020. The
Companys note payable was recorded at fair value as part of the extinguishment. The $4,000 thousand note payables original maturity date was January 1, 2023 but was modified and extended to July 1, 2023 under the Deferral
Agreement.
The Company accounted for the Deferral Agreement, extending the maturity of the notes payable, as a debt modification based on
an analysis of cash flows before and after the debt modification.
The notes payable bear interest at 0.50% below the banks prime
rate as of September 30, 2021 and December 31, 2020 (2.75% interest rate on September 30, 2021 and December 31, 2020). The Company makes monthly interest and principal payments on the notes payable based on the schedule defined
in the agreement.
In conjunction with the notes payable, the Company issued 68,000 shares of Series B redeemable convertible preferred
stock warrants and 70,000 shares of Series C redeemable convertible preferred stock warrants in July 2018 and March 2020, respectively. The Series B redeemable convertible preferred stock warrants and Series C redeemable convertible preferred stock
warrants have exercise prices of $1.42 per share and $1.84 per share, respectively, and expire 10 years after issuance. The fair values of the Series B redeemable convertible preferred stock warrants and Series C redeemable convertible preferred
stock warrants were $55 thousand and $44 thousand, respectively, at the time of issuance. The fair value of the Series B redeemable convertible preferred stock warrants was initially
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