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Notes Payable
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Notes Payable

Note 10. Notes Payable

 

The SVB Loan Facility

 

On June 18, 2021, the Company entered into a $10 million loan facility (the “SVB Loan Facility”) with Silicon Valley Bank (“SVB”). The Company immediately used $6 million from the SVB Loan Facility to retire all outstanding indebtedness with Horizon Technology Finance Corporation as further discussed below. Concurrently with this transaction, the Company used $6.0 million of other available funds to establish a restricted cash account which serves as security for the SVB Loan Facility.

 

The SVB Loan Facility is in the form of money market secured indebtedness bearing interest at a calculated WSJ Prime-based variable rate (currently 8.0%). A final payment equal to 3% of the total $10 million commitment amount is due upon maturity or prepayment of the SVB Loan Facility. There was no facility commitment fee and no stock or warrants were issued to SVB. Payments under the loan agreement are interest only for the first 24 months after loan closing, followed by a 24-month amortization period of principal and interest through the scheduled maturity date.

 

In connection with the SVB Loan Facility, the Company incurred financing fees and expenses totaling $243,370 which is recorded and classified as debt discount and are being amortized as interest expense using the effective interest method over the life of the loan. Also, in connection with the SVB Loan Facility, the Company is required to pay an end-of-term fee equal to 3.0% of the original loan amount at time of maturity. Therefore, these amounts totaling $300,000 are being amortized as interest expense using the effective interest method over the life of the loan. During the three-month period ended March 31, 2023, the Company incurred interest expense of $115,292 and amortized $44,693 as interest expense for debt discounts and end-of-term fee in connection with the SVB Financing Facility. During the three-month period ended March 31, 2022, the Company incurred interest expense of $49,375, and amortized $45,513 as interest expense for debt discounts and end-of-term fee in connection with the SVB Financing Facility.

 

 

Following is a schedule of future principal payments, net of unamortized debt discounts and amortized end-of-term fee, due on the SVB Loan Facility:

 

   As of March 31, 
2023  $1,500,000 
2024   3,000,000 
2025   1,500,000 
2026 and thereafter   – 
Subtotal of future principal payments   6,000,000 
Amortized end-of term fee, net   80,413 
Total  $6,080,413