XML 31 R16.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Notes Payable, Long-Term Borrowing, and Convertible Notes | 6 Months Ended
--- | ---
Jun. 30, 2024
Debt Disclosure [Abstract] |
Notes Payable, Long-Term Borrowing, and Convertible Notes | Notes Payable, Long-Term Borrowing, and Convertible Notes Notes payable, long-term borrowing, and convertible notes as of June 30, 2024 and December 31, 2023 consist of the following (in thousands, except stated interest rate):
Note |  | Stated Interest Rate |  | Principal Balance |  | Capitalized Interest |  | Debt Premium (Discount) |  | June 30, 2024 |
2026 Convertible Notes |  | 3.25% |  | $ | 164,639 |  |  | $ | — |  |  | $ | (1,841) |  |  | $ | 162,798 |  |
2029 Convertible Notes |  | 7.5% |  | 177,506 |  |  | — |  |  | 12,434 |  |  | $ | 189,940 |  |
Note payable |  | 10.0% |  | 2,700 |  |  | 3,925 |  |  | — |  |  | 6,625 |  |
Bpifrance |  | 2.25% |  | 1,286 |  |  | — |  |  | — |  |  | 1,286 |  |
Other |  | 4.0% |  | 30 |  |  | 9 |  |  | — |  |  | 39 |  |
|  |  |  | $ | 346,161 |  |  | $ | 3,934 |  |  | $ | 10,593 |  |  | $ | 360,688 |  |
Note |  | Stated Interest Rate |  | Principal Balance |  | Capitalized Interest |  | Debt Discount |  | December 31, 2023 |
2026 Convertible Notes |  | 3.25% |  | $ | 397,500 |  |  | $ | — |  |  | $ | (5,752) |  |  | $ | 391,748 |  |
Note payable |  | 10.0% |  | 2,700 |  |  | 3,585 |  |  | — |  |  | $ | 6,285 |  |
Bpifrance |  | 2.25% |  | 1,612 |  |  | — |  |  | — |  |  | $ | 1,612 |  |
Other |  | 4.0% |  | 30 |  |  | 8 |  |  | — |  |  | 38 |  |
|  |  |  | $ | 401,842 |  |  | $ | 3,593 |  |  | $ | (5,752) |  |  | $ | 399,683 |  |
2026 Convertible Notes On February 2, 2021, the Company issued $402.5 million of convertible notes (“2026 Convertible Notes”). The 2026 Convertible Notes bear interest from February 2, 2021, at a rate of 3.25% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The 2026 Convertible Notes will mature on February 15, 2026, unless earlier converted, redeemed, or repurchased. The net proceeds from this offering were approximately $389.4 million, after deducting a discount and offering expenses of approximately $13.1 million. The Company accounts for the 2026 Convertible Notes under ASU 2020-06 as single liability measured at amortized cost. The Company did not elect the fair value option. The initial equivalent conversion price of the 2026 Convertible Notes was $57.78 per share of the Company’s common stock. Holders may convert their 2026 Convertible Notes on or after November 15, 2025, until the close of business on the second business day preceding the maturity date or prior to November 15, 2025 under certain circumstances including: (i)during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended on March 31, 2021, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii)during the five-business day period after any five consecutive trading day period in which the trading price for each trading day of such five consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii)if the Company calls any or all of the 2026 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv)upon the occurrence of specified corporate events. The Company may also redeem all or any portion of the 2026 Convertible Notes after February 20, 2024 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon conversion, the Company can elect to deliver cash or shares or a combination of cash or shares. If the Company undergoes a fundamental change (as defined in the Indenture), subject to certain conditions, holders of the 2026 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2026 Convertible Notes at a repurchase price equal to 100% of the principal amount of the 2026 Convertible Notes plus any accrued and unpaid interest. In addition, if a corporate event (as defined in the Indenture) occurs prior to the maturity date or if the Company issues a notice of redemption, the Company may be required increase the conversion rate by a pre-defined amount for any holder who elects to convert their 2026 Convertible Notes in connection with such a corporate event. During the three and six months ended June 30, 2024, the Company completed the repurchase of $27.0 million principal amount of the 2026 Convertible Notes with a net book value of $26.7 million for $14.7 million resulting in a gain of $12.1 million and is included in gain on extinguishment of debt in the condensed consolidated statements of operations and comprehensive loss. During the three months ended June 30, 2024, the Company paid approximately $0.3 million of interest expense, in connection with the 2026 Convertible Notes. During the three months ended June 30, 2024 and 2023, the Company recorded amortization expense of $0.3 million and $0.6 million, respectively, included in amortization of debt premium (discount), net in the condensed consolidated statements of operations and comprehensive loss. During the six months ended June 30, 2024 and 2023, the Company paid approximately $3.4 million and $6.5 million of interest expense, respectively, in connection with the 2026 Convertible Notes and recorded amortization expense of $0.6 million and $1.3 million, respectively, included in amortization of debt premium (discount), net in the condensed consolidated statements of operations and comprehensive loss. As of June 30, 2024, following the Exchange (defined below) and the repurchase described above, there is $164.6 million aggregate principal amount of 2026 Convertible Notes outstanding. The fair value (Level 2) of the 2026 Convertible Notes was $98.2 million and $288.2 million as of June 30, 2024 and December 31, 2023, respectively. 2029 Convertible Notes On December 29, 2023, the Company entered into a privately negotiated exchange agreement with certain affiliates and related funds of Mudrick Capital Management, L.P., which were holders of its existing 2026 Convertible Notes, to exchange $205.8 million principal amount of the 2026 Convertible Notes for $177.5 million in aggregate principal amount of the Company’s new convertible senior secured notes due 2029 (the “2029 Notes”), subject to customary closing conditions (the "Exchange"). The Exchange closed on January 2, 2024, when the 2029 Notes were issued pursuant to, and are governed by, an indenture, dated as of January 2, 2024, among the Company, the guarantors identified therein and U.S. Bank Trust Company, National Association, as trustee and collateral agent. At our election for any interest period, the 2029 Notes will bear interest at a rate of (i) 7.5% per annum on the principal amount thereof if interest is paid in cash and (ii) 10.0% per annum on the principal amount thereof if interest is paid in kind, in each case payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024. The 2029 Notes will mature on February 15, 2029, unless earlier converted or repurchased. The initial conversion rate of the 2029 Notes is 260.6474 shares of common stock per $1,000 principal amount of 2029 Notes, which represents an initial conversion price of approximately $3.84 per share of common stock. Holders may convert their 2029 Notes at their option in the following circumstances: (i)during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price per share of common stock is greater than or equal to 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii)during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day; (iii)upon the occurrence of certain corporate events or distributions on the Company’s common stock, as provided in the Indenture; and (iv)on or after November 15, 2028 until the close of business on the second scheduled trading day immediately before the Maturity Date. The Company may cause all outstanding 2029 Notes to be automatically converted, subject to certain conditions, if, at any time on or after January 2, 2025, the last reported sale price of the Company’s common stock has been at least 200% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period, the last of which 20 trading days is no more than 10 trading days before the date that the Company provides the notice of forced conversion. Upon the occurrence of a fundamental change (as defined in the Indenture), holders of the 2029 Notes may require the Company to repurchase their 2029 Notes at a cash repurchase price equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of fundamental change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. The 2029 Notes were initially recorded at fair value. The Company recognized the difference between the fair value of the 2029 Notes and the carrying value of the exchanged 2026 Notes as a gain on the extinguishment debt. The Company incurred $4.2 million of financing costs that have been capitalized on the balance sheet and are being amortized over the life of the 2029 Notes. During the three months ended June 30, 2024, the Company recorded income of $0.6 million included in amortization of debt premium (discount), net in the condensed consolidated statements of operations and comprehensive loss. During the six months ended June 30, 2024, the Company paid approximately $1.6 million of interest expense in connection with the 2029 Convertible Notes and recorded amortization income of $1.1 million included in amortization of debt premium (discount), net in the condensed consolidated statements of operations and comprehensive loss. The fair value (Level 2) of the 2029 Convertible Notes was $151.3 million as of June 30, 2024. Note payable The Company has recognized, through the consolidation of its subsidiary Evolution AI Corporation (“EAI”), a $2.7 million note payable bearing interest at the rate of 10% per annum that was due on October 1, 2018 (“CAM Digital Note”). The cumulative accrued interest on the CAM Digital Note amounts to $3.6 million. The CAM Digital Note is currently in a default condition due to non-payment of principal and interest. The outstanding balance as of June 30, 2024 and December 31, 2023, including interest and penalties, is $6.6 million and $6.3 million, respectively, and is included in notes payable on the accompanying condensed consolidated balance sheets. Bpifrance In December 2021, the Company assumed through the acquisition of Molotov, $3.7 million in notes bearing interest rates of 2.25% per annum. During the six months ended June 30, 2024 and 2023, the Company made principal payments of $0.3 million. As of June 30, 2024 and December 31, 2023, the principal balance totaled approximately $1.3 million and $1.6 million, respectively, and is included in long-term borrowings-current portion on the accompanying condensed consolidated balance sheet. Other The Company assumed, through the consolidation of its subsidiary EAI, a $30,000 note payable due to a relative of the former Chief Executive Officer, John Textor bearing interest at the rate of 4.0% per annum. As of June 30, 2024 and December 31, 2023, the principal balance and accrued interest totaled approximately $39,000 and $38,000, respectively, and is included in notes payable on the accompanying condensed consolidated balance sheet.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/470/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration