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Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt

(16) Debt

Debt obligations consisted of the following as of December 31, 2024 and 2023 (in thousands):

Debt instrument

 

Balance at
December 31,
2024

 

 

Unamortized

Debt Discount

 

 

Net balance at
December 31,
2024

 

Current Portion:

 

 

 

 

 

 

 

 

 

2015 Subordinated Notes

 

$

2,471

 

 

$

—

 

 

$

2,471

 

Debentures

 

 

146

 

 

 

—

 

 

 

146

 

Other

 

 

81

 

 

 

—

 

 

 

81

 

Long-term Portion:

 

 

 

 

 

 

 

 

 

2015 Subordinated Notes

 

 

10,500

 

 

 

—

 

 

 

10,500

 

Promissory Note

 

 

22,000

 

 

 

(2,027

)

 

 

19,973

 

Total

 

$

35,198

 

 

$

(2,027

)

 

$

33,171

 

Debt instrument

 

Balance at
December 31,
2023

 

Current Portion:

 

 

 

Debentures

 

$

146

 

Long-term Portion:

 

 

 

2015 Subordinated Notes

 

 

12,768

 

Total

 

$

12,914

 

As of December 31, 2024, and 2023, the principal amount of our outstanding debt balance was $35.2 million and $13.1 million, respectively.

Promissory Note

On November 26, 2024, we, through a subsidiary, entered into a promissory note (the “Note”) with Ocean 1181 LLC (the “Lender”) for a loan in an aggregate principal amount of $22.0 million (the “Loan”). The Loan has a two-year term and is principally secured by our manufacturing facility in Berkeley, CA and parcels of land located in Vacaville, CA (collectively, the “Mortgaged Properties”).

We unconditionally guarantee to the Lender the payment and performance of the obligations under the Note. The Loan bears interest at a rate of 12% through November 30, 2025 and 13% from December 1, 2025 through November 30, 2026. Interest under the Note is payable monthly, one half in cash and one half of the Company’s common stock. Additionally, $1.8 million of the Loan funds were held back to serve as an interest payment reserve for the Loan.

At the closing of the Loan, we paid the Lender 153,003 shares of the Company’s common stock, representing the first month of interest, a 1% origination fee, as well as certain transaction expenses.

The Note contains customary representations, warranties and covenants, including customary events of default, including failure to repay the Loan when due. Any event of default, if not cured or waived in a timely manner, could result in the acceleration of the Loan under the Note.

If we pay off or release any of the Mortgaged Properties within 120 days of the closing of the Loan, then there will be a two percent payoff fee assessed on the released amount. In the event of a disposition of a Mortgaged Property, the loan is subject to prepayment in an amount equal to the amount of the Loan applicable to the disposed Mortgaged Property.

The Loan was accounted for as debt under the guidance of ASU 470: Debt. As part of the transaction, we reimbursed the Lender for transaction costs and paid a 1% origination fee. These costs totaled approximately $0.4 million. Additionally, as stated above, the Lender withheld approximately $1.8 million of the proceeds to serve as an interest payment reserve. We have deemed this amount to represent debt discount. These amounts are presented net of the liability in our consolidated balance sheets and will be amortized to interest expense over the term of the Loan.

Subordinated Notes

On February 20, 2015, we, certain existing investors and certain additional investors entered into an Amended and Restated Note Purchase Agreement (the “2015 Subordinated Notes”) in the aggregate principal amount of $14.0 million and issued five year warrants (the “2015 Warrants”) to purchase 70,000 shares of our common stock at an exercise price of $102.00 per share.

The 2015 Subordinated Notes bear interest at a rate of 8% per annum, payable in cash on the first day of each month in arrears. Among other default and acceleration terms customary for indebtedness of this type, the 2015 Subordinated Notes include default provisions which allow for the noteholders to accelerate the principal payment of the 2015 Subordinated Notes in the event we become involved in certain bankruptcy proceedings, become insolvent, fail to make a payment of principal or (after a grace period) interest on the 2015 Subordinated Notes, default on other indebtedness with an aggregate principal balance of $13.5 million or more if such default has the effect of accelerating the maturity of such indebtedness, or become subject to a legal judgment or similar order for the payment of money in an amount greater than $13.5 million if such amount will not be covered by third-party insurance.

In February 2020 we repaid $0.5 million of the 2015 Subordinated Notes and in April 2020 we repaid an additional $0.5 million of the 2015 Subordinated Notes and cancelled the related warrants.

On November 30, 2022, we entered into an Amendment to Notes, Termination of Warrants and Sale of New Warrants (the “2022 Amendment”) pursuant to which we:

•
extended the maturity date of the $13.0 million 2015 Subordinated Notes by two years from February 20, 2023 to February 20, 2025;
•
terminated the warrants held by such noteholders to purchase 65,000 shares of the Company’s common stock previously issued in 2015;
•
terminated the warrants held by such noteholders to purchase 32,500 shares of the Company’s common stock previously issued in 2020; and
•
issued to such noteholders new warrants to purchase 65,000 shares of the Company’s common stock that will expire February 20, 2026 and issued new warrants to purchase 32,500 shares of the Company’s common stock that will expire February 20, 2028, all such warrants having an exercise price of $56.80 per share, which represented a 15% premium over the 30-day average trailing closing price of the Company’s common stock for the period ending November 9, 2022, and (the “New Warrants”).

The amended 2015 Subordinated Notes are not convertible into shares of our common stock and are set to mature on February 20, 2025, at which point we would be required to repay the full outstanding balance in cash. We may prepay the amended 2015 Subordinated Notes at any time, in part or in full, without premium or penalty.

In February 2025, we extended the maturity date of $10.5 million of the 2015 Subordinated Notes by sixteen months, from February 20, 2025 to July 20, 2026. Refer to Note 22 for additional detail.

The 2022 Amendment was accounted for as a debt extinguishment under the guidance of ASU 470: Debt. For the year ended December 31, 2022, we recorded a loss of approximately $1.9 million in other expense in our consolidated statements of operations and comprehensive loss, which primarily represents the fair value of the new warrants. The amended 2015 Subordinated Notes were recorded at fair value.