Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

11. Debt

Pursuant to the Note Purchase Agreement, as amended from time-to time, leading to the Third Amended and Restated Note Purchase Agreement (as further described under the heading Former Principal Stockholder in Note 18), as of September 30, 2024 and December 31, 2023, the Company has notes outstanding referred to as the senior secured notes (the “Senior Secured Notes”), the delayed draw term notes (the “Delayed Draw Term Notes”) and the 2022 bridge notes (the “2022 Bridge Notes”), as further described below.

Senior Secured Notes

The terms of the Senior Secured Notes provide for:

● a provision for the Company to enter into Delayed Draw Term Notes (as described below);

● a provision where the Company added $13,852 to the principal balance of the notes for interest payable prior to January 1, 2022 as payable in-kind;

● a provision where the paid in-kind interest can be paid in shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K convertible preferred stock, subject to certain adjustments;

● an interest rate of 10.0% per annum, subject to adjustment in the event of default, with a provision that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, unless waived, the Company will prepay certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions;

● interest on the notes payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes;

● a maturity date of December 31, 2026, subject to certain acceleration conditions; and

● the Company to enter into the 2022 Bridge Notes for $36,000 (as further described below).

Delayed Draw Term Notes

The terms of the Delayed Draw Term Notes provide for:

● an interest rate of 10.0% per annum, subject to adjustment in the event of default;

● interest on the notes payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes; and

● a maturity date on December 31, 2026, subject to certain acceleration terms.

2022 Bridge Notes

The terms of the 2022 Bridge Notes provide for:

● an interest rate fixed at 10.0% per annum (as amended from interest that was payable in cash at an interest rate of 12% per annum quarterly; with interest rate increases of 1.5% per annum on March 1, 2023, May 1, 2023, and July 1, 2023, pursuant to the First Amendment);

● a maturity date of December 31, 2026, and subject to certain mandatory prepayment requirements, including, but not limited to, a requirement that the Company apply the net proceeds from certain debt incurrences or equity offerings to repay the notes; and

● an election to prepay the notes, at any time, in whole or in part with no premium or penalty.

The following table summarizes the debt:

	As of September 30, 2024 (unaudited)							As of December 31, 2023
	Principal Balance		Unamortized Discount and Debt Issuance Costs			Carrying Value		Principal Balance		Unamortized Discount and Debt Issuance Costs			Carrying Value
Senior Secured Notes, effective interest rate of 10.1% as of September 30, 2024, as amended	$	62,691	$	(204	)	$	62,487	$	62,691	$	(272	)	$	62,419
Delayed Draw Term Notes, effective interest rate of 10.2% as of September 30, 2024, as amended		4,000		(23	)		3,977		4,000		(31	)		3,969
2022 Bridge Notes, effective interest rate of 10.2% as of September 30, 2024, as amended		36,000		(60	)		35,940		36,000		(79	)		35,921
Total	$	102,691	$	(287	)	$	102,404	$	102,691	$	(382	)	$	102,309

The debt issuance costs incurred under the debt modification pursuant to the First Amendment are being amortized over the term of the long-term debt. The debt modification pursuant to the Second Amendment resulted in the unamortized debt issuance cost being amortized over the extended term of the long-term debt.

On December 29, 2023, the Company failed to make the interest payment due on the Secured Senior Notes, Delayed Draw Term Notes and 2022 Bridge Notes (collectively the “Debt”) resulting in an event of default with subsequent agreement to a forbearance period that was extended to September 30, 2024. On July 12, 2024, the Company entered into Amendment No. 3 which further deferred the accrued interest due date to December 31, 2024 (see Note 18). On November 6, 2024, the Company received a letter from Renew (as described in Note 18) confirming the Company is not currently in default under the Loan Documents due to the cure of the default identified in the forbearance letter (see Note 20). As of September 30, 2024 and December 31, 2023, the current maturities of the Debt were $102,404 and $102,309, respectively. As of September 30, 2024, the principal balance due on maturity was $102,691.

Information for the three months and nine months ended September 30, 2024 and 2023, with respect to interest expense related to the Simplify Loan is provided under the heading Interest Expense in Note 12.