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Loans and Convertible Notes Payable
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Loans and Convertible Notes Payable Loans and Convertible Notes Payable
September 30, 2024December 31, 2023
(In thousands)
Gross
Discount
Net
Gross
Discount
Net
Loans payable, current$— $— $— $5,610 $(371)$5,239 
Convertible notes payable - current1
2,000 — 2,000 5,000 (89)4,911 
Total - Loans and notes payable$2,000 $— $2,000 $10,610 $(460)$10,150 
1 The gross amount for December 31, 2023 includes the 4.25% final payment of $0.5 million.
Term Loan from Avenue Venture Opportunities Fund, L.P.
On August 6, 2021, the Company entered into a Loan and Security Agreement (the “Avenue Loan Agreement”) with Avenue Venture Opportunities Fund, L.P. (the “Lender,” or “Avenue”) for a term loan in an aggregate principal amount of up to $20.0 million (the “Avenue Loan”). The Avenue Loan bore interest at an annual rate equal to the greater of (a) the sum of 7.70% plus the prime rate as reported in The Wall Street Journal and (b) 10.95%. The Avenue Loan matured on August 1, 2024 with a 16.20% rate at maturity.

The Avenue Loan Agreement required the Company to make and maintain representations and warranties and other agreements that are customary in loan agreements of this type. The Avenue Loan Agreement also contained customary events of default, including non-payment of principal or interest, violations of covenants, bankruptcy and material judgements. The Avenue Loan was secured by all of the Company’s assets globally, including intellectual property. As of August 2024, Avenue has released the Company from all obligations and returned all security interests back to the Company.

The initial tranche of the Avenue Loan was $15.0 million, including $4.0 million that was funded into a restricted account. On March 15, 2023, the Company returned to Avenue $4.0 million held as restricted cash to pay down a portion of the outstanding loan balance, principal payments of $2.1 million and an incremental 4.25% of the final payment of $0.2 million. On March 31, 2023, the Avenue Loan Agreement was amended (the “Avenue Amendment”) to defer the interest only period to September 30, 2023, with an additional extension option upon FDA Approval for the HEPZATO KIT and subsequent receipt of at least $10 million from the sale and issuance of equity securities. On August 14, 2023, the Company received FDA approval and had subsequently received over $10 million from the exercise of Tranche A Preferred Warrants. At the Company’s option, it elected to extend the interest only period to December 31, 2023 and monthly principal payments of approximately $1.0 million began in January 2024 with the final payment occurring on August 1, 2024.
Avenue did not exercise its option to convert the principal amount of the Avenue Loan into shares of the Company’s common stock.
In connection with the initial entry into the Avenue Loan Agreement, the Company issued warrants to Avenue (the “Initial Avenue Warrant”) to purchase 127,755 shares of common stock at an exercise price per share equal to $0.01. Additionally, in connection with the Avenue Amendment, the Company issued to Avenue a warrant to purchase 34,072 shares of common stock at an exercise price per share equal to $0.01. Avenue exercised all outstanding warrants connected to the Avenue Loan in full in April 2024.
The Company determined that the embedded conversion option associated with the Avenue Loan did not require bifurcation and met the criteria for equity classification. In addition, the amendment was recorded under debt modification guidance. Aggregate debt discount amortization of $0.1 million and $0.2 million was recorded during the three months ended September 30, 2024 and 2023, and $0.5 million and $0.6 million for the nine months ended September 30, 2024 and 2023, respectively. Interest expense incurred was $0.1 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively, and $0.4 million and $1.1 million for the nine months ended September 30, 2024 and 2023, respectively.
Convertible Notes Payable
The Company has $2.0 million of principal outstanding related to Senior Secured Promissory Notes (the “Rosalind Notes”) which bear interest at 8% per annum. Pursuant to the original terms, the Rosalind Notes were convertible into Series E Preferred Stock at a price of $1,500 per share and were to mature on July 16, 2021.
On August 6, 2021, the Company executed an agreement to amend the Rosalind Notes to (i) reduce the conversion price to $1,198 per share of the Company’s Series E Preferred Stock; and (ii) extend the maturity date to October 30, 2024. In addition, the holders of the Rosalind Notes agreed to subordinate all of the Company’s indebtedness and obligations to Avenue and all of the holders’ security interest to the Avenue Loan and Avenue’s security interest in the Company’s property.
The outstanding principal and accrued interest was paid on October 30, 2024. Rosalind did not exercise its option to convert the Rosalind Notes into shares of the Company’s common stock.
Interest expense accrued relating to the Rosalind Notes was $0.1 million for both the three and nine months ended September 30, 2024 and 2023.