DEBT

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

DEBT

DEBT

The Company’s outstanding debt with Perceptive Credit Holdings IV, LP (as initial lender and administrative agent) (“Perceptive Credit Agreement”) at June 30, 2024 and December 31, 2023 bears interest at a floating rate based on one-month SOFR, subject to a floor of 5.0%, plus 7.0% (12.3% at June 30, 2024). Included in interest expense for the three and six months ended June 30, 2024 are $64,000 and $129,000, respectively, of amortization of the debt issuance costs and $158,000 and $314,000, respectively, of amortization of debt discounts. Included in interest expense for the three and six months ended June 30, 2023 are $60,000 and $88,000, respectively, of amortization of the debt issuance costs and $83,000 and $121,000, respectively, of amortization of the debt discounts, including accretion of the exit fee on the Company’s prior credit agreement.

A $7.5 million delayed draw loan is available until December 31, 2024, conditioned upon, among other things, the achievement of a minimum revenue target. If drawn, the loan will be used for working capital and general corporate purposes.

The Perceptive debt contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the Perceptive Credit Agreement. The Perceptive Credit Agreement also requires the Company to satisfy certain financial covenants, including minimum trailing twelve month net revenue targets relating to its Advanced Energy segment (tested quarterly), with year-end targets of $41.6 million, $57.0 million, $70.2 million, and $87.8 million for 2024, 2025, 2026, and 2027, respectively. Additionally, the Company must maintain a balance of $3 million in cash and cash equivalents during the duration of the Perceptive Credit Agreement’s term. As of June 30, 2024, the Company was in compliance with the financial covenants contained within the Perceptive Credit Agreement. The Company’s continued compliance with covenants is subject to meeting or exceeding forecasted Advanced Energy revenues.

In connection with the Company’s initial loan under the Perceptive Credit Agreement, the Company issued Perceptive warrants to purchase up to 1,250,000 shares of its common stock, par value $0.001, with an exercise price of $2.43 per share.

The Company’s term loan under the Perceptive Credit Agreement, net consists of the following:

(In thousands)	June 30, 2024		December 31, 2023
Term loan	$	37,500	$	37,500
Unamortized debt issuance costs	(1,111)		(1,240)
Unamortized debt discount	(2,761)		(3,075)
Term loan, net	$	33,628	$	33,185

As of June 30, 2024, principal repayments on the debt are as follows:

(In thousands)
2024	$	—
2025	—
2026	—
2027	2,216
2028	35,284
Total repayments	$	37,500