LOANS PAYABLE, NET

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

LOANS PAYABLE, NET

6. LOANS PAYABLE, NET

As of March 31, 2025 and 2024, loans payable, net, consisted of the SIF Loan, the TPC loan (as defined below) and the Term Loan. The following tables show the component of loans payable (in thousands):

	Effective Interest Rate	As of March 31, 2025		As of December 31, 2024
Loans payable, net, current:
TPC Loan, current	Interest free	$	348	$	348
Total loans payable, net, current		$	348	$	348
Loans payable, net, non-current:
SIF Loan	Variable1	$	30,367	$	30,128
Total loans payable, net, non-current		$	30,367	$	30,128

1Refer below for additional information on the SIF Loan repayment period and effective interest rate.

TPC loan

During the period spanning 2010 through 2021, the Company received funding totaling C$12.5 million from Technology Partnerships Canada (the "TPC Loan"). On November 23, 2020, an amendment forgave C$5.0 million of unpaid accrued debt principal and interest from prior years. Additionally, the amendment waived the interest charge on the remaining C$2.5 million of principal and revised the repayment schedule to C$0.5 million due annually on each April 30 through 2025.

The estimated fair value of the TPC Loan (Level 2) at March 31, 2025 was $0.3 million. The fair value of the TPC Loan was valued using a discounted cash flow model, with key inputs relating to terms, discount rate and expectations for defaults and prepayments.

As the TPC Loan is originated through a government program, a market rate of interest is not imputed in accordance with the scope limitations of ASC 835.

SIF Loan

On November 20, 2020, the Company entered into the SIF Loan. As of December 31, 2023, the Company had received the full C$40.0 million in eight tranches between November 2020 and December 2023. Funds from the SIF Loan were used for projects involving the adaptation of research findings for commercial applications that have the potential for market disruption; development of current product and services through the implementation of new or incremental technology that will enhance the Company’s competitive capability; and development of process improvements which reduce the environmental footprint of current production through the use of new or improved technologies.

Principal and interest amounts to be repaid under the SIF Loan are determined using a revenue-based formula, and are capped at 150% of the principal amount (the "Repayment Cap"). Repayments are due in up to 15 annual installments, commencing on April 30 of the second fiscal year following the fiscal year in which the Company first reports annual revenue of at least $70.0 million (the "Benchmark Year"). If the Company fails to reach $70.0 million in annual revenue after 14 years from origination, or if the total of the 15 revenue-based annual installments is less than the principal amount, any remaining repayment obligation will be forgiven.

Repayments of the SIF Loan can also be triggered upon default of the agreement, termination of the agreement, or upon a change of control that has not been approved by the Canadian government. As of March 31, 2025, the Company is not aware of any events that would trigger default or termination of the agreement.

The gross proceeds of the SIF Loan were recorded as a liability related to the sale of future revenues (see Note 2 - Basis of Presentation and Summary of Significant Accounting Policies). As of March 31, 2025 and December 31, 2024, the Company calculated a weighted average effective interest rate for all tranches of 2.46% and 2.46%, respectively based on the most recent revenue projections at each reporting date.

The estimated fair value of the SIF Loan (Level 3) at March 31, 2025 was $8.9 million. The fair value of SIF Loan was valued using a discounted cash flow model, with significant assumptions relating to the amount and timing of future revenues and the appropriate discount rate.

Term Loan

On April 13, 2023, the Company entered into the Term Loan with PSPIB Unitas Investments II Inc. ("PSPIB"), a related party to the Company's largest shareholder. Under the Term Loan, term loans in aggregate principal amount of $50.0 million were to be made available to the Company in three tranches, subject to certain terms and conditions.

The Company fully repaid and extinguished the Term Loan on October 22, 2024, that included $30.0 million in principal and $4.3 million in accrued payable in kind ("PIK") interest. The Term Loan, originally set to mature on March 31, 2027, was secured by a first-priority security interest in substantially all of the Company's assets and included certain operational and financial covenants. It bore interest at either 10.0% payable in cash or 11.0% PIK, with the latter added to the principal balance. For the three months ended March 31, 2025 and 2024, the Company recognized zero and $0.9 million, respectively, in interest expense.

Throughout 2023 and 2024, multiple amendments were made to the Term Loan, including covenant waivers, modifications to prepayment requirements, and exemptions for certain share issuance proceeds. The sixth and final amendment, entered on April 16, 2024, provided temporary prepayment exemptions for up to $30.0 million in proceeds from share issuances, with an additional $20.0 million exempt from the 10% prepayment premium.

With the full repayment of the Term Loan, the Company has no remaining obligations under this facility.