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CONVERTIBLE NOTES (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Schedule of Convertible Notes
The carrying value of the convertible notes at September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30,December 31,
20232022
Outstanding principal at par
$66,944 $56,595 
Debt premium
5,641 — 
Unamortized debt discount
(35,744)— 
Unamortized debt issuance costs
(2,788)(182)
Net carrying amount
$34,053 $56,413 
At September 30, 2023 and December 31, 2022 the convertible notes were classified as follows (in thousands):

September 30,December 31,
20232022
Current portion of convertible notes$726 $56,413 
Convertible notes, non-current33,327 — 
Total convertible notes$34,053 $56,413 
The carrying value of the 2.50% Notes at September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30,December 31,
20232022
Outstanding principal at par
$726 $56,595 
Unamortized debt issuance— (182)
Net carrying amount
$726 $56,413 

At September 30, 2023 and December 31, 2022 the 2.50% Notes were classified as follows (in thousands):

September 30,December 31,
20232022
Current portion of convertible notes$726 $56,413 
Convertible notes, non-current— — 
Total convertible notes$726 $56,413 
The carrying value of the 5.00% Notes at September 30, 2023 and December 31, 2022 was as follows (in thousands):

September 30,December 31,
20232022
Outstanding principal at par
$66,218 $— 
Debt premium5,641 — 
Unamortized debt discount
(35,744)— 
Unamortized debt issuance(2,788)— 
Net carrying amount
$33,327 $— 
Schedule of Interest Expense
Interest expense related to convertible notes during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Contractual coupon interest$838 $79 $1,730 $1,528 
Amortization of premium, discount and issuance costs, net
1,367 121 2,060 386 
Total interest expense on convertible notes$2,205 $200 $3,790 $1,914 
Interest expense for the 2.50% Notes during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Contractual coupon interest$5 $79 $562 $1,528 
Amortization of debt issuance costs— 121 182 386 
Total interest expense on 2.50% Notes
$5 $200 $744 $1,914 
Interest expense for the 5.00% Notes during the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Contractual coupon interest$833 $— $1,168 $— 
Amortization of premium, discount and issuance costs, net
1,367 — 1,878 — 
Total interest expense on 5.00% Notes
$2,200 $— $3,046 $— 
Interest expense in connection with the Secured Note during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Contractual interest
$— $220 $784 $220 
Amortization of the debt discount— 275 1,034 275 
Total interest expense
$— $495 $1,818 $495 
Schedule of Gain (Loss) on Extinguishment
Gain (loss) on extinguishment of exchanged convertible notes during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Gain (loss) on extinguishment$51 $— $(6,499)$3,565 
Schedule of Derivative Financial Instrument Activity
The derivative financial instrument activity for the three and nine months ended September 30, 2023 and 2022 is comprised of the following (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Beginning balance$42,786 $— $— $— 
Initial measurement— — 38,160 — 
Extinguishment(380)— (380)— 
Change in value - gain(16,808)— (12,182)— 
Ending balance$25,598 $— $25,598 $— 
Schedule of Future Principal Payments
Future principal payments on the 5.00% Notes as of September 30, 2023 are as follows (in thousands):

Remainder of 2023$— 
2024— 
2025— 
202678,124 
Total including PIK interest, before unamortized discount and issuance costs$78,124 
Less: unaccrued PIK interest(11,905)
Less: unamortized discount and deferred issuance costs(32,892)
Convertible notes, non-current$33,327 
Schedule of Significant Inputs Used to Estimate Fair Value
The table below summarizes the significant inputs used to estimate the fair value of the 5.00% Notes as of September 30, 2023:

September 30,June 9,
20232023
Coupon rate5.00%5.00%
Term (years)3.23.5
Volatility55.00 %55.00 %
Risk-free rate4.78 %4.15 %
Discount yield25.00 %25.00 %
Discount factor47.00 %44.00 %
The table below summarizes the significant inputs used to estimate the fair value of the Conversion Option as of September 30, 2023 and June 9, 2023:

September 30,June 9,
20232023
Stock price$5.75$7.40
Initial conversion price$7.20$7.20
Conversion cap$8.30$8.30
Term (years)3.23.5
Time to call (years)1.72.0
Volatility55.00 %55.00 %
Risk-free rate4.78 %4.15 %
Discount yield25.00 %25.00 %
The table below summarizes the significant inputs used to estimate the fair value of the Schuler Purchase Obligation as of September 30, 2023 and June 9, 2023:
September 30,June 9,
20232023
Stock price$5.75$7.40
Exercise price$7.20$7.20
Term (years)0.210.52
Volatility55.00 %55.00 %
Risk-free rate5.55 %5.38 %
Fixed commitment purchase price (in thousands)$10,000$10,000
Number of Shares1,387,9491,387,949