Senior Secured Note Payable

On September 25, 2018, the Company repaid in full all the outstanding debt, together with interest, under the senior secured note payable to Brainlab (the “Brainlab Note”). The Brainlab Note had a maturity date of December 31, 2018, and interest was payable quarterly in arrears at an annual rate of 5.5%. In connection with the repayment, the security agreement under which the Brainlab Note had been collateralized by all the assets of the Company was terminated.

2014 Junior Secured Notes Payable

The indebtedness outstanding under the 2014 Junior Secured Notes Payable (the “2014 Secured Notes”) at each of March 31, 2019 and December 31, 2018 was $1.975 million. The 2014 Secured Notes bear interest at an annual rate of 12%, payable semi-annually in arrears, are collateralized by a first-priority security interest in all the Company’s assets and are due in September 2020.

The carrying amount of the 2014 Secured Notes in the accompanying condensed consolidated balance sheets is presented net of a discount and unamortized issuance costs, as discussed further below.

The discount related to the 2014 Secured Notes, arising from warrants issued to noteholders at issuance of the 2014 Secured Notes, is being amortized to interest expense over the contractual life of the notes using the effective interest method. The unamortized discount at March 31, 2019 and December 31, 2018 was $20,331 and $23,719, respectively.

The deferred financing costs, arising from warrants issued to the placement agents at issuance of the 2014 Secured Notes, have an unamortized balance of $9,798 and $11,430 at March 31, 2019 and December 31, 2018, respectively, and are being amortized to interest expense over the contractual life of the notes using the effective interest method.

2010 Junior Secured Notes Payable

The indebtedness outstanding under the 2010 Junior Secured Notes Payable (the “2010 Secured Notes”) at each of March 31, 2019 and December 31, 2018 was $3.0 million. The 2010 Secured Notes accrue interest at an annual rate of 3.5% and are collateralized by a security interest in all the Company’s assets, which security interest is junior and subordinate to the security interest that collateralizes the 2014 Secured Notes. All outstanding principal and interest on the 2010 Secured Notes will be due and payable in a single payment upon maturity in November 2020.

The carrying amount of the 2010 Secured Notes in the accompanying condensed consolidated balance sheets is presented net of a discount arising from shares issued to the noteholders at issuance of the 2010 Secured Notes. The unamortized discount at March 31, 2019 and December 31, 2018 was $1,295,052 and $1,459,209, respectively. This discount is being amortized to interest expense over the term of the notes using the effective interest method.

At each of March 31, 2019 and December 31, 2018, the Company’s Chairman and one of the Company’s officers held 2010 Secured Notes they purchased at the date of original issuance having an aggregate principal balance of $197,000.

Scheduled Notes Payable Maturities

Scheduled principal payments as of March 31, 2019 with respect to notes payable are summarized as follows: