diff --git a/app/assets/javascripts/views/challenge_modal/challenge-modal.pug b/app/assets/javascripts/views/challenge_modal/challenge-modal.pug
index 159dd38e9..9e1fcef49 100644
--- a/app/assets/javascripts/views/challenge_modal/challenge-modal.pug
+++ b/app/assets/javascripts/views/challenge_modal/challenge-modal.pug
@@ -11,26 +11,44 @@
       .sk-panel-content
         .sk-panel-section
           div(ng-repeat="type in ctrl.state.types")
-            .sk-p.sk-bold.sk-panel-row
+            .sk-p.sk-bold.sk-panel-row.centered
               strong {{ctrl.promptForChallenge(type)}}
             .sk-panel-row
               input.sk-input.contrast(
-                ng-model="ctrl.state.values[type].value" 
-                should-focus="$index == 0" 
-                sn-autofocus="true" 
+                ng-model="ctrl.state.values[type].value"
+                should-focus="$index == 0"
+                sn-autofocus="true"
                 sn-enter="ctrl.submit()" ,
                 ng-change="ctrl.onTextValueChange(type)"
                 type="password"
                 )
-            .sk-panel-row
+            .sk-panel-row.centered
               label.sk-label.danger(
                 ng-if="ctrl.state.values[type].invalid"
                 ) Invalid authentication. Please try again.
-          .sk-panel-row
       .sk-panel-footer.extra-padding
         .sk-button.info.big.block.bold(
           ng-click="ctrl.submit()",
           ng-class="{'info' : !ctrl.state.processing, 'neutral': ctrl.state.processing}"
           ng-disabled="ctrl.state.processing"
           )
-          .sk-label {{ctrl.state.processing ? 'Generating Keys...' : 'Submit'}} 
+          .sk-label {{ctrl.state.processing ? 'Generating Keys...' : 'Submit'}}
+
+      .sk-panel-footer(ng-if="ctrl.state.showForgotPasscodeLink")
+        a.sk-panel-row.sk-a.info.centered(
+          ng-if="!ctrl.state.forgotPasscode"
+          ng-click="ctrl.onForgotPasscodeClick()"
+        ) Forgot your passcode?
+        p.sk-panel-row.sk-p(ng-if="ctrl.state.forgotPasscode").
+          {{
+            ctrl.state.hasAccount
+              ? "If you forgot your local passcode, your only option is to clear
+                 your local data from this device and sign back in to your account."
+              : "If you forgot your local passcode, your only option is
+                 to delete your data."
+          }}
+        a.sk-panel-row.sk-a.danger.centered(
+          ng-if="ctrl.state.forgotPasscode"
+          ng-click="ctrl.destroyLocalData()"
+        ) Delete Local Data
+        .sk-panel-row
diff --git a/app/assets/javascripts/views/challenge_modal/challenge_modal.ts b/app/assets/javascripts/views/challenge_modal/challenge_modal.ts
index 608f07030..2c372776c 100644
--- a/app/assets/javascripts/views/challenge_modal/challenge_modal.ts
+++ b/app/assets/javascripts/views/challenge_modal/challenge_modal.ts
@@ -5,9 +5,12 @@ import {
   ChallengeValue,
   removeFromArray,
   Challenge,
+  ChallengeReason,
 } from 'snjs';
 import { PureViewCtrl } from '@Views/abstract/pure_view_ctrl';
 import { WebDirective } from '@/types';
+import { confirmDialog } from '@/services/alertService';
+import { STRING_SIGN_OUT_CONFIRMATION } from '@/strings';
 
 type InputValue = {
   value: string
@@ -19,7 +22,9 @@ type Values = Record<ChallengeType, InputValue>
 type ChallengeModalState = {
   types: ChallengeType[]
   values: Partial<Values>
-  processing: boolean
+  processing: boolean,
+  forgotPasscode: boolean,
+  showForgotPasscodeLink: boolean,
 }
 
 class ChallengeModalCtrl extends PureViewCtrl {
@@ -27,6 +32,7 @@ class ChallengeModalCtrl extends PureViewCtrl {
   private processingTypes: ChallengeType[] = []
   application!: WebApplication
   challenge!: Challenge
+  private cancelable = false
 
   /* @ngInject */
   constructor(
@@ -51,10 +57,15 @@ class ChallengeModalCtrl extends PureViewCtrl {
         invalid: false
       };
     }
+    const showForgotPasscodeLink = this.challenge.reason === ChallengeReason.ApplicationUnlock
+    this.cancelable = !showForgotPasscodeLink
     this.setState({
-      types: types,
-      values: values,
-      processing: false
+      types,
+      values,
+      processing: false,
+      forgotPasscode: false,
+      showForgotPasscodeLink,
+      hasAccount: this.application.hasAccount(),
     });
     this.application.setChallengeCallbacks({
       challenge: this.challenge,
@@ -94,13 +105,29 @@ class ChallengeModalCtrl extends PureViewCtrl {
     }
   }
 
+  async destroyLocalData() {
+    if (await confirmDialog({
+      text: STRING_SIGN_OUT_CONFIRMATION,
+      confirmButtonStyle: "danger"
+    })) {
+      await this.application.signOut();
+      this.dismiss();
+    };
+  }
+
   cancel() {
-    // if (!this.cancelable) {
-    //   return;
-    // }
+    if (!this.cancelable) {
+      return;
+    }
     this.dismiss();
   }
 
+  onForgotPasscodeClick() {
+    this.setState({
+      forgotPasscode: true
+    });
+  }
+
   onTextValueChange(challenge: ChallengeType) {
     const values = this.getState().values;
     values[challenge]!.invalid = false;
diff --git a/app/assets/stylesheets/_modals.scss b/app/assets/stylesheets/_modals.scss
index cb29d8caf..faf3e89dd 100644
--- a/app/assets/stylesheets/_modals.scss
+++ b/app/assets/stylesheets/_modals.scss
@@ -12,7 +12,15 @@
 }
 
 #privileges-modal {
-  width: 700px;
+  width: 400px;
+
+  input {
+    text-align: center;
+  }
+
+  .sk-panel-header {
+    justify-content: center;
+  }
 
   table {
     margin-bottom: 12px;