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Term Debt

9 Months Ended

Sep. 30, 2023

12. Term Debt

Senior Secured Notes

Pursuant to the Note Purchase Agreement and the First Amendment, as of September 30, 2023 and December 31, 2022, the Company has certain notes outstanding referred to as the senior secured notes (the “Senior Secured Notes”).

Pursuant to the Note Purchase Agreement and First Amendment (see Note 18), the Senior Secured Notes provide for:

	●	a provision for the Company to enter into Delayed Draw Term Notes (as described below), in an aggregate principal amount of $9,928 as of December 31, 2021 (the Company repaid $5,928 on December 31, 2022);

	●	a provision where the Company added $13,852 to the principal balance of the notes for interest payable on the notes on last day of a fiscal quarter from September 30, 2020 to December 31, 2021 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 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination on or prior to December 31, 2023, which may result in an event of default if not consummated, and subject to certain acceleration conditions; and

	●	the Company to enter into the 2022 Bridge Notes for $36,000 and to increase the line of credit with SLR in an aggregate principal amount not to exceed $40,000.

Delayed Draw Term Notes

Pursuant to the Note Purchase Agreement, as of September 30, 2023 and December 31, 2022, the Company has outstanding obligations of $4,000 for delayed draw term notes (the “Delayed Draw Term Notes”) that was further amended pursuant to the First Amendment, which include terms prior to and including the second amended and restated note purchase agreement.

Pursuant to the Note Purchase Agreement and First Amendment (see Note 18), 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 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination on or prior to December 31, 2023, which may result in an event of default if not consummated, and subject to certain acceleration terms.

2022 Bridge Notes

Pursuant to the First Amendment, the 2022 Bridge Notes outstanding as of December 31, 2022 were amended and reclassified from a current liability to a noncurrent liability.

Pursuant to the Note Purchase Agreement and First Amendment (see Note 18), 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 a rate of 12% per annum quarterly in arrears on March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023; provided that, on March 1, 2023, May 1, 2023, and July 1, 2023, the interest rate on the notes increased by 1.5% per annum pursuant to the First Amendment);

	●	a maturity date of December 31, 2026 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination on or prior to December 31, 2023, which may result in an event of default if not consummated, 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;

	●	a prepayment requirement to apply a portion of the net proceeds from the Business Combination to repay $20,000 of the principal balance under the notes upon the earlier of December 31, 2023 or the closing of the Business Combination;

	●	a provision for the failure to repay the $20,000 prepayment requirement in full with the proceeds of the Business Combination or failure to consummate the Business Combination by December 31, 2023 will result in an event of default under 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 term debt:

Schedule of Long Term Debt

	As of September 30, 2023 (unaudited)							As of December 31, 2022
		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 11.4% as of September 30, 2023, as amended, matures December 31, 2026, subject to acceleration	$	62,691	$	(228	)	$	62,463	$	62,691	$	(904	)	$	61,787
Senior Secured Notes, effective interest rate of 11.4% as of September 30, 2023, as amended, matures December 31, 2026, subject to acceleration	$	62,691	$	(228	)	$	62,463	$	62,691	$	(904	)	$	61,787
Delayed Draw Term Notes, effective interest rate of 12.5% as of September 30, 2023, as amended, matures December 31, 2026, subject to acceleration		4,000		(26	)		3,974		4,000		(103	)		3,897
2022 Bridge Notes, effective interest rate of 10.2% as of September 30, 2023, as amended, matures December 31, 2026, subject to acceleration		36,000		(95	)		35,905		-		-			-
Total	$	102,691	$	(349	)	$	102,342	$	66,691	$	(1,007	)	$	65,684

As of September 30, 2023, the current maturities and noncurrent maturities under the term debt were $19,980 and $82,362, respectively, totaling $102,342, and as of December 31, 2022, the current maturities and noncurrent maturities were $65,684 an $0, respectively, totaling $65,684.

The Company’s principal maturities of the term debt of $102,691 are due as follows: (i) $20,000 due upon the earlier of December 31, 2023 or the closing of the Business Combination; and (ii) $82,691 due on December 31, 2026, subject acceleration if the Business Combination in not consummated on or prior to December 31, 2023.

Information for the three and nine months ended September 30, 2023 and 2022 with respect to interest expense related to the term debt is provided below.

Interest Expense

The following table represents interest expense:

Summary of Interest Expense

	2023			2022		2023			2022
	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
Amortization of debt costs:
Line of credit	$	54		$	-	$	161		$	-
2022 Bridge Notes		161			-		1,200			-
Senior Secured Notes		228			228		676			803
Delayed Draw Term Notes		26			52		77			412
2023 Notes		64			-		64			-
Total amortization of debt costs		533			280		2,178			1,215
Noncash and accrued interest:
Parade		-			-		-			86
Other accrued interest		152			-		754			-
Total noncash and accrued interest		152			-		754			86
Cash paid interest:
Line of credit		598			372		1,345			814
2022 Bridge Notes		1,317			-		3,763			-
Senior Secured Notes		1,602			1,602		4,754			4,754
Delayed Draw Term Notes		102			254		303			753
2023 Notes		44			-		44			-
Other		32			676		422			888
Total cash paid interest		3,695			2,904		10,631			7,209
Less interest income ⁽¹⁾		(338	)		-		(338	)		-
Total interest expense	$	4,042		$	3,184	$	13,225		$	8,510

⁽¹⁾	During the three and nine months ended September 30, 2023, the Company recorded interest income of $338 related to the refunds received from the employee retention credits.

Noncash and accrued interest of $204 as of December 31, 2022, related to the 2022 Bridge Notes, was paid in cash during the nine months ended September 30, 2023.