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LONG-TERM DEBT
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
LONG-TERM DEBT

NOTE 6 – LONG-TERM DEBT

 

Securities Purchase Agreement

 

As noted above, on June 1, 2021, the Company entered into the Purchase Agreement with the Purchaser, pursuant to which the Company sold and issued: (i) the Debenture in the aggregate principal amount of $15.0 million and (ii) warrants to purchase up to an aggregate of 1,500,000 shares of the Company’s common stock at an exercise price of $12.00 per share of which 500,000 warrants were issued to the Purchaser upon closing with the remaining 1,000,000 warrants only issued to the Purchaser in increments of 500,000 if the Debenture remains outstanding for twelve and twenty four months, respectively, following the closing date of the Purchase Agreement. The total fair value of the 500,000 warrants issued to the Purchaser upon closing was $6,270,710. The total fair value was recorded to debt discount and was included as a reduction to long-term debt on the unaudited condensed consolidated balance sheet as of September 30, 2021. The debt discount will be amortized over a twelve-month period. Total amortization of debt discount was $1,567,677 and $2,090,236 for the three and nine months ended September 30, 2021, respectively. The Warrant has a term of three years. The Aggregate Principal Amount of the Debenture, together with interest, is due and payable on June 1, 2024. The Debenture bears interest as follows: (i) for the period beginning on June 1, 2021 and ending on the date that is six (6) months thereafter (the “Initial Interest Rate Period”) shall be six percent (6%), (ii) for the period beginning the date following the Initial Interest Rate Period and ending on the date that is three (3) months thereafter (the “Second Interest Rate Period”), nine percent (9%), and (iii) for the period beginning the date following the Second Interest Rate Period and ending on June 1, 2024, twelve percent (12%). Until such time as the obligations shall have been paid in full, the Company shall apply thirty-five percent (35%) of the gross proceeds received by the Company from At-The-Market offerings of its Common Stock to partial redemptions of each Debenture on a pro rata basis. The Company received gross proceeds of $15.0 million (net proceeds of $14.9 million) and intends to use such proceeds for working capital and general corporate purposes. In October 2021, the Company used a portion of the net proceeds from the October 4, 2021 Offerings to pay the $15.0 million outstanding on the June 1, 2021 Purchase Agreement.

 

Total interest expense on long-term debt, inclusive of amortization of debt discounts, amounted to $1,732,663 and $0 for the three months ended September 30, 2021 and 2020, respectively. Total interest expense on long-term debt, inclusive of amortization of debt discounts, amounted to $2,405,222 and $0 for the nine months ended September 30, 2021 and 2020, respectively.