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Notes Payable (Tables)
 9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Debt Disclosure [Abstract]    
Schedule of notes payable
   September 30, 2022        
Note Name  Contractual
Maturity Date		  Contractual
Interest
Rates		   Unpaid
Principal
Balance		   Fair Value
Measurement
Adjustments		   Original
issue
discount 
and
proceeds
allocated to
warrants		   Net
Carrying
Value		   Interest
Expense
for the
Three Months
Ended
September 30,
2022		   Interest
Expense
for the
Nine Months
Ended
September 30,
2022		 
June 2021 Notes(3)  October 31, 2026      0%  $4,012   $612   $(955)  $3,669   $   —   $— 
Optional Notes(3)  October 31, 2026   15%   2,687    737    (912)   2,512    28    2,572 
Bridge Notes(4)  August 14, 2026   10%   44,500    7,690    (11,421)   40,769    418    418 
Notes payable – China various other  Due on Demand   0%   4,902    —    —    4,902    —    — 
Auto loans  October 26, 2026   7%   106    —    —    106    —    — 
           $56,207   $9,039   $(13,288)  $51,958   $446   $2,990 

 

   Nine months ended September 30, 2022
Note Name  Contractual
Maturity Date		  Contractual
Interest
Rates		   Net
carrying
value at
12/31/2021		   Fair Value
Measurement
Adjustments		   Payment
Premium		   Cash
Payment		   Conversion
into
Class A
Common
Stock		 
March 1, 2021 Notes (1)   March 1, 2022   14%  $56,695   $(1,695)  $—     $(55,000)  $—   
August 26, 2021 Notes (1)   March 1, 2022   14%   30,924    (924)   2,065    (32,065)   — 
June 2021 Notes (3)   October 31, 2026   0%   35,071    917    —    —    (35,988)
Optional Notes (3)   October 31, 2026   15%   31,934    (704)   —    —    (31,230)
PPP Loan (2)   April 17, 2022   1%   193    —    —    (193)   — 
           $154,817   $(2,406)  $2,065   $(87,258)  $(67,218)

 

(1) On March 1, 2021, the Company amended the NPA to permit the issuance of additional notes payable with principal amounts up to $85,000. On the same day, the Company entered into notes payable agreements with Ares for an aggregate principal of $55,000. The notes payable were collateralized by a first lien on virtually all tangible and intangible assets of the Company, bore interest at 14% per annum and matured on March 1, 2022. On February 25, 2022, the Company repaid the $55,000 principal amount of the March 1, 2021 Notes with accrued interest of $7,721.

 

(2) In April 2022, the Company paid the remaining principal and accrued interest in an aggregate amount of $193.

 

(3) On July 26, 2022, the Company entered into an agreement (the “ATW July Amendment”) with entities affiliated with ATW Partners LLC (collectively, the “Investors”), to extend the maturity date, adjust the conversion price and otherwise amend the terms (as described further below) of the Optional Notes and the June 2021 Notes (together, “ATW NPA Notes”).

 

(4) On August 14, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with certain entities affiliated with ATW Partners LLC and RAAJJ Trading LLC (and together with Senyun, as defined below, the “Purchasers”) to issue and sell the Company’s senior secured convertible notes (the “Bridge Notes”) in three tranches aggregating to $52,000 in principal (as increased on September 23, 2022 to $57,000, which increase was subsequently terminated upon the Initial Senyun Funding Date, as defined below) and maturing on August 14, 2026 (subsequently extended to October 27, 2028). The Bridge Notes are subject to an original issue discount of 10%, and are convertible, along with any interest accrued, into shares of Class A Common Stock at a conversion price equal to $2.69 (or $2.2865 for the initial tranche) (“Conversion Price”), subject to a full ratchet anti-dilution protection. When calculating the shares issuable upon conversion, the converted amount shall be decreased by 50% of the original issue discount pertaining to such amount. As of September 30, 2022, the Purchasers funded $44,500, less total original discounts of $4,450 and transaction costs of $2,813, equating to net proceeds of $37,237.

 

   December 31, 2021
Note Name  Contractual
Maturity
Date		  Contractual
Interest
Rates		   Unpaid
Balance		   Fair Value
Measurement
Adjustments		   Original
issue
discount
and
proceeds
allocated to
warrants		   Net
Carrying
Value		 
March 1, 2021 Notes  March 1, 2022   14%  $55,000   $7,692   $(5,997)  $56,695 
August 26, 2021 Notes  March 1, 2022   14%   30,000    1,011    (87)   30,924 
June 9, 2021 Note 1 and Note 2  December 9, 2022   —%   40,000    8,503    (9,522)   38,981 
August 10, 2021 Optional Notes  February 10, 2023   15%   33,917    12,283    (11,518)   34,682 
Notes payable - China various other  Due on demand   —%   5,458    —    —    5,458 
PPP Loan  April 17, 2022   1%   193    —    —    193 
Auto loans  Various   Various    121    —    —    121 
Total notes payable          $164,689   $29,489   $(27,124)  $167,054 
   December 31, 2021
Note Name  Contractual
Maturity
Date		  Contractual
Interest
Rates		   Unpaid
Balance		   Net
Carrying
Value at
12/31/21		 
Related party notes - China(1)    Due on Demand   18.00%  $9,411   $9,411 
Related party notes - China various other(2)    Due on Demand   0.00%   4,244    4,244 
Total related party notes payable          $13,655   $13,655 

 

   December 31, 2020
Note Name  Contractual
Maturity
Date		  Contractual
Interest  
Rates		  Unpaid
Balance		   Fair Value
Measurement
Adjustments		   0%  
Coupon
Discount		   Loss (Gain) on  
Extinguishments		   Net
Carrying
Value at
12/31/2020		 
Related party note (3)    June 30, 2021  12.00%  $240,543   $—   $(861)  $204   $239,886 
Related party note (4)    Due on Demand  15.00%   10,000    —    —    —    10,000 
Related party notes – NPA tranche (5)    October 6, 2021  10.00%   27,593    5,356    —    —    32,949 
Related party notes – China (1)    Due on Demand  18.00%   9,196    —    —    —    9,196 
Related party notes – China various other (2)(6)    Due on Demand  0% coupon, 10.00% imputed   6,548    —    (190)   (22)   6,336 
Related party notes – China various other (6)    Due on Demand  8.99%   1,410    —    —    (3)   1,407 
Related party notes – Other (7)    Due on Demand  0.00%   424    —    —    —    424 
Related party notes – Other (8)    June 30, 2021  6.99%   4,160    —    —    (50)   4,110 
Related party notes – Other (9)    June 30, 2021  8.00%   6,452    —    —    (35)   6,417 
Related party notes - Other (10)    June 30, 2021  1.52%, 8.99%,  8.00%, 2.86%   8,440    —    —    (137)   8,303 
Related party notes – Other (11)    Due on Demand,  June 30, 2021  8.99%, 6.99%   1,760    —    —    (11)   1,749 
Related party notes – Other (12)    June 30, 2021  8.00%   11,635    —    —    (57)   11,578 
Total related party notes payable        $328,161   $5,356   $(1,051)  $(111)  $332,355 

 
Schedule of fair value of financial instruments
   September 30,
2022		  December 31,
2021
March 1, 2021 Notes      
Outstanding principal  $—   $55,000 
Accrued interest   —    6,455 
Interest expense for the nine months ended September 30, 2022   1,266    — 
Principal payments   55,000    — 
Interest payments   7,721    — 

 

   September 30,
2022		  December 31,
2021
August 26, 2021 Notes      
Outstanding principal  $—   $30,000 
Accrued interest   —    1,473 
Interest expense for the nine months ended September 30, 2022   662    — 
Principal payments   30,000    — 
Interest payments   2,135    — 
Payment Premium payments   2,065    — 

 
March 1, 2021 Notes  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $55,000   $— 
Accrued interest   6,455    — 
Interest expense   6,455    — 
Original issue discount   3,490    — 
Proceeds   51,510    — 

 

August 26, 2021 Notes  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $30,000   $— 
Accrued interest   1,473    — 
Interest expense   1,473    — 
Original issue discount   87    — 
Proceeds   29,913    — 

 

June 9, 2021 Note 1  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $20,000   $— 
Original issue discount and debt issuance costs   1,797    — 
Proceeds   18,203    — 

 

June 9, 2021 Note 2  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $20,000   $— 
Original issue discount and debt issuance costs   2,600    — 
Proceeds   17,400    — 

 

August 10, 2021 Optional Notes  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $33,917   $— 
Accrued interest   183    — 
Interest expense   183    — 
Original issue discount and debt issuance costs   3,542    — 
Proceeds   30,375    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $5,458   $4,597 
Foreign exchange (gain) loss on principal   133    297 
Reclassification from related party notes payable   730    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $193   $9,168 
Accrued interest   2    65 
Interest expense   92    65 
Payroll Protection Program principal forgiveness   8,975    — 
Payroll Protection Program interest forgiveness   155    — 
Proceeds   —    9,168 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $57,293 
Accrued interest   —    13,769 
Interest expense   3,408    7,387 
Foreign exchange (gain) loss on principal   (1,293)   4,108 
Principal settled with equity   56,000    — 
Interest settled with equity   17,177    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $17,637 
Accrued interest   —    2,637 
Interest expense   976    1,768 
Principal conversion premium settled with equity   3,527    — 
Interest settled with equity   3,613    — 
Principal payments in cash   17,637    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $10,600 
Accrued interest   —    2,547 
Interest expense   704    1,275 
Principal settled with equity   10,600    — 
Interest settled with equity   3,251    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $1,500 
Accrued interest   —    587 
Interest expense   112    203 
Principal settled with equity   1,500    — 
Interest settled with equity   699    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $7,000 
Accrued interest   —    1,682 
Interest expense   465    842 
Principal and conversion premium settled with equity   10,375    — 
Interest settled with equity   2,147    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $3,677 
Accrued interest   —    2,314 
Interest expense   374    637 
Principal settled with equity   3,715    — 
Interest settled with equity   2,713    — 
Foreign exchange (gain) loss on principal   219    237 
Foreign exchange (gain) loss on accrued interest   167    142 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $4,140 
Accrued interest   —    569 
Interest expense   139    235 
Principal settled with equity   4,181    — 
Interest settled with equity   713    — 
Foreign exchange (gain) loss on principal   260    219 
Foreign exchange (gain) loss on accrued interest   44    35 
Proceeds   —    766 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $729 
Accrued interest   —    19 
Interest expense   24    19 
Principal settled with equity   736    — 
Interest settled with equity   44    — 
Principal payments   —    32 
Foreign exchange (gain) loss on principal   (25)   — 
Foreign exchange (gain) loss on accrued interest   1    — 
Proceeds   —    761 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $15,000 
Principal and conversion premium settled with equity   20,367    — 
Proceeds   —    13,800 

 

January 13 and March 12, 2021 Notes  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $— 
Original issue discount and debt issuance costs   1,940    — 
Principal and conversion premium settled with equity   23,725    — 
Proceeds   16,310    — 

 

   As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $15,000 
Interest expense   1,334    366 
Principal conversion premium settled with equity   2,785    — 
Interest and adjustment fee settled with equity   270    — 
Principal and conversion premium payments in cash   18,992    — 
Interest payments in cash   1,197    366 
Proceeds   —    15,000 

 

January 13 and March 8, 2021 Notes  As of and for the Year
Ended December 31,		 
   2021   2020 
Outstanding principal  $—   $— 
Original issue discount and debt issuance costs   1,132    — 
Interest expense   632    — 
Principal conversion premium settled with equity   2,069    — 
Interest settled with equity   82    — 
Principal and conversion premium payments in cash   11,582    — 
Interest payments in cash   550    — 
Proceeds   8,218    — 

 
Schedule of principal maturities of notes payable
Due on demand  $4,902 
2022   4,012 
2023   2,687 
2026   44,606 
   $56,207 

 
Years ended December 31,    
2022   130,772 
2023   33,917 
   $164,689 
Schedule of notes payable consists  
    December 31, 2021
Note Name   Contractual
Maturity
Date		   Contractual
Interest
Rates		     Unpaid
Balance		     Fair
Value
Measurement
Adjustments		     Original issue
discount and
proceeds
allocated to
warrants		     Net
Carrying
Value		  
March 1, 2021 Notes(1)   March 1, 2022     14.00 %   $ 55,000     $ 7,692     $ (5,997 )   $ 56,695  
August 26, 2021 Notes(1)   March 1, 2022     14.00 %     30,000       1,011       (87 )     30,924  
June 9, 2021 Note 1 and Note 2(2)   December 9, 2022     — %     40,000       8,503       (9,522 )     38,981  
August 10, 2021 Optional Notes(2)   February 10, 2023     15.00 %     33,917       12,283       (11,518 )     34,682  
Notes payable - China various other(3)   Due on demand     — %     5,458       —       —       5,458  
Notes payable(4)   April 17, 2022     1.00 %     193       —       —       193  
Auto loans   Various     Various       121       —       —       121  
                $ 164,689     $ 29,489     $ (27,124 )   $ 167,054  

 

    December 31, 2020
Note Name   Contractual
Maturity
Date		   Contractual
Interest
Rates		     Unpaid
Balance		     Fair
Value
Measurement
Adjustments		     Loss(Gain)
on
Extinguishments		     Net
Carrying
Value		  
Note payable(5)   Contingent     12.00 %   $ 57,293     $ —     $               —     $ 57,293  
Notes payable – NPA tranche(6)   October 6, 2021     10.00 %     17,637       3,422       —       21,059  
Notes payable(7)   June 30, 2021     12.00 %     19,100       —       —       19,100  
Notes payable – China various other(8)   Due on Demand     9.00 %     3,677       —       (18 )     3,659  
Notes payable – China various other(8)   Various Dates 2021     6.00 %     4,869       —       (62 )     4,807  
Notes payable – China various other(3)   Due on Demand     — %     4,597       —       —       4,597  
Note payable(9)   March 9, 2021     — %     15,000       2,712       —       17,712  
Note payable(10)   October 6, 2021     12.75 %     15,000       5,972       —       20,972  
Notes payable(4)   April 17, 2022     1.00 %     9,168       —       —       9,168  
                $ 146,341     $ 12,106     $ (80 )   $ 158,367  

 

(1)On March 1, 2021, the Company amended the NPA to permit the issuance of additional notes payable with principal amounts up to $85,000. On the same day, the Company entered into notes payable agreements with Ares for an aggregate principal of $55,000, receiving net proceeds of $51,510, inclusive of a 4.00% original issue discount and $90 of debt issuance costs paid directly by the lender. The notes payable are collateralized by a first lien on virtually all tangible and intangible assets of the Company and bear interest at 14% per annum. The notes payable mature on March 1, 2022.

 

(2)On June 9, 2021, the Company amended the NPA to permit the issuance of two notes payable, each with a principal value of $20,000 (“June 2021 Notes”), to a US-based investment firm. The Company received net proceeds of $35,603 as part of the June 2021 Notes inclusive of $4,200 of original issuance discount and $197 of debt issuance costs paid by the lender. The June 2021 Notes are subordinate to the notes payable issued to Ares on March 1, 2021 and August 26, 2021 (see (1) above) and senior in priority to the notes payable issued under the NPA prior to September 9, 2020. The June 2021 Notes mature on December 9, 2022, and do not bear interest unless extended beyond its maturity date by the US-based investment firm, in which case, the June 2021 Notes will bear interest at 10% per annum starting upon their original maturity. Each of the June 2021 Notes are subject to an original issue discount of 8% and 13%, respectively. One of the June 2021 Notes with a principal amount of $20,000 contains a conversion premium that, within a year of a Qualified SPAC Merger, the then outstanding principal and accrued interest of the notes playable plus a 30% premium may convert into Class A Common Stock of the Company, at the election of the US-based investment firm.

 

(3)The Company issued notes with various third parties through its operations in China.

 

(4)On April 17, 2020, the Company received loan proceeds from East West Bank of $9,168 under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and provided for loans to qualifying businesses. The loans and accrued interest are forgivable so long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, as described in the CARES Act. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the later of the first six months or when the amount of the loan forgiveness is determined. The Company used the proceeds for purposes consistent with the PPP requirements. The note matured on April 17, 2022, had no covenants, and was unsecured.

 

(5)In January 2019, upon extinguishment of a portion of the Faraday and Future (HK) Limited related party notes payable, the Company borrowed $54,179 through notes payable from a Chinese lender. The notes payable originally matured on December 31, 2020, bore interest of 12.00% per annum, had no covenants, and were unsecured.

 

(6)The Company issued 10% interest notes with various third parties through the NPA. Notes payable issued under the NPA are collateralized by virtually all tangible and intangible assets of the Company. Upon both a preferred stock offering and prepayment notice by the holder or the maturity date of the notes payable, the holder of the notes payable may elect to convert all of the outstanding principal and accrued interest of the notes payable plus a 20% premium into shares of preferred stock of the Company issued in a preferred stock offering. The Company elected the fair value option for these notes payable. See Note 8, Fair Value of Financial Instruments. On October 9, 2020, the Company entered into the Second A&R NPA with Birch Lake and the lender, which extended the maturity dates of all NPA notes to the earliest of (i) October 6, 2021, (ii) the consummation of a Qualified SPAC Merger, (iii) the occurrence of a change in control, or (iv) the acceleration of the NPA obligations pursuant to an event of default, as defined in the NPA, as amended.

 

(7)The Company issued the following notes with an interest rate of 12.00% per annum.

 

(8)The Company issued notes with various third parties through its operations in China.

 

(9)On September 9, 2020, the Company issued $15,000 of secured convertible promissory notes to a US-based investment firm by entering into a joinder to the NPA, received net proceeds of $13,800, inclusive of an 8% original issue discount. The senior convertible promissory notes bore interest at 0%. The NPA notes mature on the earliest of (i) March 9, 2022, (ii) the Vendor Trust maturity date (See Note 11, Vendor Payables in Trust), as amended, (iii) the maturity of any First Out NPA Notes, which include the notes with Birch Lake and FF Ventures (“First Out Notes”), or (iv) the acceleration of the NPA notes payable pursuant to an event of default.

 

(10)On October 9, 2020, the Company entered into a Second A&R NPA with Birch Lake borrowing $15,000 in secured convertible notes payable (“BL Notes”). The BL Notes accrued interest at 12.75% per annum through January 31, 2021 and at 15.75% per annum thereafter. The BL Notes mature on the earliest of (i) October 6, 2021, (ii) the consummation of a Qualified SPAC Merger, (iii) the occurrence of a change in control, or (iv) the acceleration of the NPA obligations pursuant to an event of default. Additionally, the BL Notes contain a liquidation premium that ranges from 35% to 45% depending on the timing of settlement with 50% of this premium convertible into equity and the lender is able to demand repayment if an event of default, change in control, or a Qualified SPAC Merger occurs. The Company determined that the feature to settle the BL Notes at a premium upon the occurrence of a default, change in control, or a Qualified SPAC Merger is a contingently exercisable put option with a liquidation premium and represents an embedded derivative. The Company elected the fair value option for this note payable. See Note 8, Fair Value of Financial Instruments. The fair value of the note payable was $20,972 as of December 31, 2020.

 
Schedule of accrued interest and conversion premiums pursuant to the closing of the business combination  
   Year ending December 31, 2021 
Note Name  Net Carrying
Value at
12/31/2020		   Borrowings,
net of
OID		   Fair Value
Measurement
Adjustments		   Accrued
Interest at
Settlement		   FX
and
Other		   Cash Payment   Equity
Settlement		   Net Carrying
Value at
12/31/2021		   Loss
(Gain) at
Settlement		 
Settlement prior to the Business Combination:                                    
Note payable(5)  $57,293   $—   $—   $17,177   $(1,293)  $—   $(73,177)  $—   $— 
Notes payable(7)   19,100    —    —    6,098    —    —    (25,198)   —    — 
Subtotal settlements prior to the Business Combination   76,393    —    —    23,275    (1,293)   —    (98,375)   —    — 
Settlements in the Business Combination:                                             
Notes payable – NPA(6)   21,059    —    104    3,614    —    (17,636)   (7,141)   —    2,699 
Notes payable – China(8)   3,659    —    —    2,713    56    —    (6,428)   —    2,430 
Notes payable – China(8)   4,807    —    —    757    110    —    (5,674)   —    2,145 
Note payable(9)   17,712    —    1,988    —    667    —    (20,367)   —    7,698 
January 13 and March 12, 2021 Notes(9)   —    16,790    6,935    —    —    —    (23,725)   —    8,968 
Note payable(10)   20,972    —    138    270    667    (18,992)   (3,055)   —    1,155 
January 13 and March 8, 2021 Notes(10)   —    8,750    4,901    82    —    (11,582)   (2,151)   —    813 
Subtotal settlements in the Business Combination   68,209    25,540    14,066    7,436    1,500    (48,210)   (68,541)   —    25,908 
Notes payable(4)   9,168    —    —    —    (8,975)   —    —    193    (8,975)
Total  $153,770   $25,540   $14,066   $30,711   $(8,768)  $(48,210)  $(166,916)  $193   $16,933 

 

(5)In January 2019, upon extinguishment of a portion of the Faraday and Future (HK) Limited related party notes payable, the Company borrowed $54,179 through notes payable from a Chinese lender. The notes payable originally matured on December 31, 2020, bore interest of 12.00% per annum, had no covenants, and were unsecured.

 

(6)The Company issued 10% interest notes with various third parties through the NPA. Notes payable issued under the NPA are collateralized by virtually all tangible and intangible assets of the Company. Upon both a preferred stock offering and prepayment notice by the holder or the maturity date of the notes payable, the holder of the notes payable may elect to convert all of the outstanding principal and accrued interest of the notes payable plus a 20% premium into shares of preferred stock of the Company issued in a preferred stock offering. The Company elected the fair value option for these notes payable. See Note 8, Fair Value of Financial Instruments. On October 9, 2020, the Company entered into the Second A&R NPA with Birch Lake and the lender, which extended the maturity dates of all NPA notes to the earliest of (i) October 6, 2021, (ii) the consummation of a Qualified SPAC Merger, (iii) the occurrence of a change in control, or (iv) the acceleration of the NPA obligations pursuant to an event of default, as defined in the NPA, as amended.

 

(7)The Company issued the following notes with an interest rate of 12.00% per annum.

 

(8)The Company issued notes with various third parties through its operations in China.

 

(9)On September 9, 2020, the Company issued $15,000 of secured convertible promissory notes to a US-based investment firm by entering into a joinder to the NPA, received net proceeds of $13,800, inclusive of an 8% original issue discount. The senior convertible promissory notes bore interest at 0%. The NPA notes mature on the earliest of (i) March 9, 2022, (ii) the Vendor Trust maturity date (See Note 11, Vendor Payables in Trust), as amended, (iii) the maturity of any First Out NPA Notes, which include the notes with Birch Lake and FF Ventures (“First Out Notes”), or (iv) the acceleration of the NPA notes payable pursuant to an event of default.

 

(10)On October 9, 2020, the Company entered into a Second A&R NPA with Birch Lake borrowing $15,000 in secured convertible notes payable (“BL Notes”). The BL Notes accrued interest at 12.75% per annum through January 31, 2021 and at 15.75% per annum thereafter. The BL Notes mature on the earliest of (i) October 6, 2021, (ii) the consummation of a Qualified SPAC Merger, (iii) the occurrence of a change in control, or (iv) the acceleration of the NPA obligations pursuant to an event of default. Additionally, the BL Notes contain a liquidation premium that ranges from 35% to 45% depending on the timing of settlement with 50% of this premium convertible into equity and the lender is able to demand repayment if an event of default, change in control, or a Qualified SPAC Merger occurs. The Company determined that the feature to settle the BL Notes at a premium upon the occurrence of a default, change in control, or a Qualified SPAC Merger is a contingently exercisable put option with a liquidation premium and represents an embedded derivative. The Company elected the fair value option for this note payable. See Note 8, Fair Value of Financial Instruments. The fair value of the note payable was $20,972 as of December 31, 2020.