Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Management has determined that no material events or transactions have occurred subsequent to the balance sheet date, other than those events noted below, that require disclosure in the condensed consolidated financial statements.

In July and August 2022, we granted a total of 8,523,783 RSUs to new and existing employees under the 2021 EIP (see Note 11, Commitments and Contingencies).

On August 12, 2022, we entered into senior secured convertible note subscription agreements with certain institutional investors, pursuant to which we agreed to issue and sell $67.5 million in aggregate principal amount of a new series of variable rate convertible senior secured notes due December 15, 2025 (the “2025 Notes”) to holders of our 6.25% convertible senior notes due June 15, 2026 (see Note 8, Debt) in a private placement transaction, raising approximately $22.5 million in gross cash proceeds, after paying for a repurchase of $45.0 million of the 2026 Notes, which proceeds will be used in part to fully repay the seller notes. The 2025 Notes are convertible into shares of UpHealth common stock at a conversion price, subject to the occurrence of certain corporate events, of $1.75 per share. The 2025 Notes will be senior secured obligations of UpHealth, secured by substantially all of our assets and those of our domestic subsidiaries, and will accrue interest at a rate equal to the daily secured overnight financing rate (“SOFR”) plus 9.0% per annum, with a minimum rate of 10.5% per annum, payable quarterly in arrears. The 2025 Notes will mature on December 15, 2025, unless earlier repurchased, redeemed or converted. Holders will have the right to convert their 2025 Notes at any time. Upon the occurrence of certain corporate events, holders of the 2025 Notes can require UpHealth to repurchase for cash all or part of their 2025 Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price that will be equal to 105% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest thereon, if any. In the event that UpHealth sells assets with net proceeds in excess of $15.0 million, then it will make an offer to all holders of the 2025 Notes to repurchase the 2025 Notes for an aggregate amount of cash equal to 20.0% of the net proceeds of such asset sale, at a repurchase price per 2025 Note equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any. UpHealth may not otherwise seek to redeem the 2025 Notes prior to June 16, 2024. UpHealth will settle conversions solely in shares of its common stock, except for payments of cash in lieu of fractional shares.