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Term Loans
 9 Months Ended
Sep. 30, 2022
Term Loans  
Term Loans

7.    Term Loans

On August 1, 2022, the Company entered into the SPA with the Creditor in connection with the issuance of up to $45,000 of Notes, issuable in multiple tranches. On August 19, 2022, the Company closed on the initial tranche of $5,000, which has an Initial Conversion Price equal to $8.11 per share, which was calculated based on a 20% premium of the 5-day VWAP immediately prior to the announcement of the SPA. In connection with the first closing, the Company repaid in full its secured indebtedness with Bridge Bank in the amount of $5,000. The note becomes due on the maturity date, which is August 19, 2027.

On September 23, 2022, the Company closed on the second tranche of the Note Financing in the amount of $20,000, which has an Initial Conversion Price equal to $7.89 per share, which was calculated based on a 20% premium of the 5-day  VWAP immediately prior to the Second Closing Trigger.

Subsequent to the funding of the Second Closing Note, and before December 31, 2023, the Company may draw up to $20,000 of additional financing under the SPA, in one or more tranches of $10,000 upon mutual agreement of the Company and the Creditor. The Subsequent Closing Notes will be convertible at a price per share equal to $7.89 per share, which price is calculated on the same basis as for the Second Closing Note.

A commitment fee of 2.0% of the Notes is payable under the SPA. Half of such fee was paid by the issuance on the first closing of warrants to purchase 55,498 of the Company’s common shares and half was payable in cash or warrants of 55,498 of the Company’s common shares, at our election, on the second closing. The Company chose to issue warrants to

satisfy the payable on second closing. The warrants will be exercisable at a price per share of $8.11 and will have a term of five years from the date of the grant. The maturity date of the second tranche is September 23, 2027.

Cash interest on outstanding principal shall accrue at a rate of prime, plus 4.5% per annum (10.75% as of September 30, 2022), from the date of funding. Cash interest is due on the first business day of each calendar quarter (“Interest Date”). Payment-in-kind (“PIK”) interest will commence on funding date and accrue at a rate of 3.5% per annum (9.75% as of September 30, 2022). PIK interest will stop accruing on August 24, 2024. Any accrued PIK interest shall remain outstanding and be payable on each Interest Date and be added to the outstanding principal amount.

The SPA notes are convertible into fully paid, non-assessable share of common shares at any point after their issuance dates and before the maturity date. Any amount of the SPA notes may be converted into common shares so long as it does not create partial shares. The conversion rate is determined by dividing the conversion amount by the conversion price.

Aggregate annual payments due on the SPA as of September 30, 2022, are as follows:

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Years Ending December 31,

    

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Amount

2022

 

$

—

2023

 

​

—

2024

 

​

—

2025

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​

—

2026

​

​

—

2027

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25,000

Total future payments

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​

25,000

Less: unamortized debt discount

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​

(312)

Total term loan, net of debt discount

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$

24,688

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In the event of default or change of control, all unpaid principal and all accrued and unpaid interest amounts (if any) become immediately due and payable. Events of default include, but are not limited to, a payment default, a material adverse change, and insolvency. The SPA facility is secured by all of the Company’s assets, including all capital stock held by the Company.

Debt issuance costs amounting to $175 were paid in cash to the Creditor and warrants valued at $441 (non-cash) secured access to the SPA. These amounts were capitalized and are being amortized over the access period of the SPA. Upon drawing tranche 1 and tranche 2, the Company recorded a debt discount of $314, which was based on a pro-rata allocation of the issue costs to secure the SPA, reducing the capitalized amount by the same amount. The debt discount is being amortized over the term of the SPA.