debt discount and an addition to “additional paid-in capital” on the consolidated balance sheets. In addition, there was $5,000 of additional cash debt discount.
Related party term note and working capital facility
In October 2019, the Company entered into a term note and working capital facility (the “Facility”), with a company represented on the board. Under the Facility, the Company may borrow up to $24,000. Borrowings under the Facility, which were $3,000 as of June 30, 2021, are secured by substantially all the Company’s assets, are subject to borrowing base limitations, and require the Company to meet certain covenants. Interest is payable quarterly on borrowings at a fixed annual rate of 15%.
In connection with entering into this Facility, the Company issued warrants in 2020 and 2019, exercisable into 60,241 and 301,205, respectively, shares of Series C preferred stock at the conversion price of $1.66 per share. At the time of issuance, the Company estimated the fair value of the warrants at $6 and $66, respectively, and has recorded a debt discount, which was being recognized over the life of the Facility borrowings, and a warrant liability, which is adjusted to fair value each reporting period, with the changes in fair value reported as a component of “other income, net.”
During the six months ended June 30, 2021, the Company borrowed an additional $4,000 for a total borrowings of $10,000. As a result of the Business Combination, the Facility was paid down to $3,000 as of June 30, 2021 and the warrants were converted to common stock based on the Exchange Ratio.
Third-party secured promissory note
In February 2021 the Company borrowed $3,000 by entering into a promissory note with a third-party lender. The note was secured by substantially all the Company’s assets and bore an annual interest rate of 20%, of which 10% was to be paid in cash and 10% was to be paid-in-kind by adding such interest to the principal balance. Interest which was to be paid quarterly beginning on April 30, 2021 until the earliest of the following events to occur: the maturity date of February 19, 2022; or 14 days after the closing of the Business Combination as described in Note 1, at which time all outstanding principal and interest was due.
As a result of the Business Combination, the Facility was paid down from $3,000 as of March 31, 2021 to zero as of June 30, 2021.
Related party 2020 convertible notes payable
In February 2020, the Company borrowed $3,000 in the aggregate under two convertible note payable agreements from companies represented on the board. Theses convertible notes bore interest at 8% and were subject to certain covenants. In May 2020, these notes were subject to a mandatory redemption in connection with a qualified equity offering of $3,000, resulting in a conversion into 2,118,819 Series C preferred shares at a weighted average conversion price of $1.42 per share. The mandatory redemption was treated as a debt extinguishment for accounting purposes. To record the extinguishment, the fair value of consideration received and debt relieved was compared to the fair value of consideration paid and equity instruments issued. The fair value of consideration received was greater than the consideration paid. The excess fair value of $1,844 was recorded as a contribution to “additional paid-in capital”.
In connection with the redemption, the Company issued short and long-term warrants, exercisable into 3,614,457 and 831,326, respectively, shares of Series C preferred shares at the conversion price of $1.66 per share. The Company estimated the fair value of the warrants at $336. The change in fair value is reported within “loss (gain) from change in fair value of warrant liabilities.” As a result of the Business Combination, the warrants were converted to common stock based on the Exchange Ratio.
Related and Third-party 2020 short-term convertible notes payable
In August and September 2020, the Company borrowed $9,679 in the aggregate under convertible note purchase agreements from third parties ($6,454) and related parties ($3,225). The related parties include officers, a director, and