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CONVERTIBLE NOTES (Tables)

12 Months Ended

Dec. 31, 2023

As of December 31, 2023 and 2022, the convertible note obligations were classified as follows in the consolidated balance sheets (in thousands):


	2023		2022
2.50% Notes	$	726	$	56,413
5.00% Notes	$	36,102	$	—
Total convertible notes	$	36,828	$	56,413
Current portion of convertible notes	$	726	$	56,413
Convertible notes, non-current	$	36,102	$	—

Schedule of Interest Expense

Interest expense related to the Company’s convertible note obligations consisted of the following for the years ended December 31 (in thousands):


	2023		2022		2021
Contractual coupon interest	$	2,425	$	1,794	$	3,934
Amortization of premium, discount and issuance costs, net	3,278		474		11,542
Total interest expense on convertible notes	$	5,703	$	2,268	$	15,476

Schedule of Gain (Loss) on Extinguishment

Gain (loss) on extinguishment of exchanged convertible notes were as follows for the years ended December 31 (in thousands):


	2023		2022		2021
(Loss) gain on extinguishment	$	(6,499)	$	3,565	$	4,916

Schedule of Convertible Notes

The carrying value of the 2.50% Notes was included in current portion of convertible notes and consisted of the following at December 31 (in thousands):


	2023		2022
Outstanding principal	$	726	$	56,595
Unamortized debt issuance	—		(182)
Net carrying amount	$	726	$	56,413

The carrying value of the 5.00% Notes consisted of the following at December 31 (in thousands):


	2023		2022
Outstanding principal at par	$	67,634	$	—
Unamortized debt premium	5,408		—
Unamortized debt discount	(34,267)		—
Unamortized debt issuance costs	(2,673)		—
Net carrying amount	$	36,102	$	—

Schedule of Derivative Financial Instrument Activity

The derivative financial instrument activity for the year ended December 31, 2023 is comprised of the following (in thousands):


	2023
Beginning balance	$	—
Initial measurement	38,160
Reduction as a result of conversion of 5.00% Notes	(380)
Change in value - gain	(10,872)
Reclassification to contributed capital	(26,908)
Ending balance	$	—

Schedule of Significant Assumptions and Inputs Used to Estimate the Fair Value of Convertible Notes and Conversion Option

The table below summarizes the significant inputs used to estimate the fair value of the 5.00% Notes as of December 31, 2023 and the June 9, 2023 issuance date:


	December 31,		June 09,
	2023		2023
Coupon rate	5.00%		5.00%
Term (years)	3.0		3.5
Volatility	55.00%		55.00%
Risk-free rate	4.02	%	4.15	%
Discount yield	25.00	%	25.00	%
Discount factor	50.00%		44.00%

The table below summarizes the significant inputs used to estimate the fair value of the Conversion Option as of October 17, 2023 and June 9, 2023:


	October 17			June 09,
	2023			2023
Stock price	$	5.94		$	7.40
Initial conversion price	$	7.20		$	7.20
Conversion cap	$	8.30		$	8.30
Term (years)	3.2			3.5
Time to call (years)	1.7			2.0
Volatility	55.00		%	55.00		%
Risk-free rate	5.00		%	4.15		%
Discount yield	25.00		%	25.00		%

The table below summarizes the significant inputs used to estimate the fair value of the Schuler Purchase Obligation as of December 31, 2023 and June 9, 2023:


	December 31,			June 9,
	2023			2023
Stock price	$	3.92		$	7.40
Exercise price	$	7.20		$	7.20
Term (years)	0.13			0.52
Volatility	55.00		%	55.00		%
Risk-free rate	5.55		%	5.38		%
Fixed commitment purchase price (in thousands)	$	10,000		$	10,000
Number of Shares	1,387,949			1,387,949
Obligation probability	75%			100%

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

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