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v3.24.3

Debt | 9 Months Ended
--- | ---
Sep. 30, 2024
Debt |
Debt | 7. Debt The Company’s outstanding debt was as follows (in thousands):
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Outstanding Principal |  |  | Fair Value |  |  | Outstanding Principal |  |  | Fair Value |
Convertible promissory notes: |  |  |  |  |  |  |  |  |  |  |  |
Historical convertible promissory notes |  | $ | 4,000 |  |  | $ | 4,008 |  |  | $ | 35,347 |  |  | $ | 34,033 |
2024 convertible promissory note |  |  | 5,000 |  |  |  | 4,830 |  |  |  | — |  |  |  | — |
Total convertible promissory notes |  |  | 9,000 |  |  |  | 8,838 |  |  |  | 35,347 |  |  |  | 34,033 |
Borrowings: |  |  |  |  |  |  |  |  |  |  |  |
KEB Hana Bank |  |  | 6,820 |  |  |  | 6,820 |  |  |  | 6,980 |  |  |  | 6,980 |
IBK Industrial Bank |  |  | 6,972 |  |  |  | 6,972 |  |  |  | 7,135 |  |  |  | 7,135 |
Note payable (one individual investor) |  |  | — |  |  |  | — |  |  |  | 1,000 |  |  |  | 1,000 |
Mujin Electronics Co., Ltd. |  |  | 3,789 |  |  |  | 3,789 |  |  |  | — |  |  |  | — |
M-Venture Investment, Inc. |  |  | — |  |  |  | — |  |  |  | 7,756 |  |  |  | 7,756 |
Anapass, Inc., related party |  |  | 9,851 |  |  |  | 9,851 |  |  |  | 10,082 |  |  |  | 10,082 |
i Best Investment Co., Ltd |  |  | 4,546 |  |  |  | 4,546 |  |  |  | 10,082 |  |  |  | 10,082 |
Kyeongho Lee, related party |  |  | 841 |  |  |  | 841 |  |  |  | 1,474 |  |  |  | 1,474 |
Total debt |  | $ | 41,819 |  |  |  | 41,657 |  |  | $ | 79,856 |  |  |  | 78,542 |
Less: current portion |  |  |  |  |  | (36,827 | ) |  |  |  |  |  | (72,303 | )
Debt, net of current portion |  |  |  |  | $ | 4,830 |  |  |  |  |  | $ | 6,239 |
Expected future minimum principal payments under the Company’s total debt is as follows as of September 30, 2024 (in thousands):
Years |  | Convertible Notes Payable |  |  | Borrowings |  |  | Total |
2024, remainder |  | $ | 4,000 |  |  | $ | 7,813 |  |  | $ | 11,813 |
2025 |  |  | — |  |  |  | 25,006 |  |  |  | 25,006 |
2026 |  |  | 5,000 |  |  |  | — |  |  |  | 5,000 |
Total debt |  | $ | 9,000 |  |  | $ | 32,819 |  |  | $ | 41,819 |
Convertible Promissory Notes Historical Convertible Promissory Notes Between 2017 and 2022, the Company issued convertible promissory notes to various investors with maturity dates ranging from October 2020 to April 2025. The annual interest rates varied between 4.0% and 7.0%. In November 2023, the Company entered into an amendment with certain convertible promissory noteholders to modify the conversion terms such that these notes were automatically convertible upon a special purpose acquisition company (“SPAC”) transaction. In March 2024, upon the Closing of the Business Combination, an aggregate principal and interest amount of $32.1 million converted into 4,258,223 shares of common stock at a conversion price of $10.00. In April 2024, the Company repaid one of the convertible promissory notes that was issued in 2021 with a principal amount of $0.6 million. In August and September 2024, the Company repaid one of the convertible promissory notes that was issued in 2017 with a principal amount of $1.0 million. As of September 30, 2024, the remaining principal and interest amount of $5.9 million was outstanding and related to one noteholder where conversion is at the noteholder’s discretion and at a conversion price of $3.50 per share. 2023 and 2024 Convertible Promissory Notes In November 2023, February 2024 and March 2024, the Company issued convertible promissory notes to certain investors (the “CVT Investors”), pursuant to which the CVT Investors agreed to lend to the Company an aggregate principal amount of $13.3 million. These notes had maturity dates ranging from November 2026 to March 2027, bore an interest rate of 5.0%, and were automatically convertible upon IPO or SPAC transaction. In March 2024, upon the Closing of the Business Combination, an aggregate principal and interest amount of $13.4 million converted into 2,004,535 shares of common stock at a conversion price of $6.67. As of September 30, 2024, none of the notes issued to CVT Investors remain outstanding. In February 2024, the Company issued a convertible promissory note to a strategic investor for a principal amount of $5.0 million, which matures in February 2026 and bears an interest rate of 5.0% per annum. On or after the earlier of (i) six months from the issuance date of the convertible promissory note and (ii) the Closing of the Business Combination, the noteholder may demand that the Company convert all principal and interest due under the convertible promissory note into shares of Company’s common stock, at a conversion price of $10.00 per share. This note includes customary representations, warranties, and events of default, as well as a covenant relating to the performance of obligations by the Company related to the Company’s 5G activity. As of September 30, 2024, the remaining principal and interest amount of $5.1 million was outstanding. Borrowings Pursuant to Term Loan and Security Agreements The amounts in Korean Won (“KRW”) presented below were converted into US dollars based on the applicable historical exchange rates. KEB Hana Bank In July 2016, the Company entered into an unsecured term loan agreement with KEB Hana Bank, pursuant to which it borrowed 9.0 billion in KRW ($6.7 million), bearing a variable interest rate (initial annual interest rate of 2.6% and interest ranging between 3.5-5.2% as of June 30, 2024), paid monthly, and maturing in July 2017. The terms of such unsecured term loan agreement have been extended annually for additional one-year terms since 2017, and the maturity date was July 2024. In April 2024, the Company executed an amendment to extend the maturity date to April 2025 for the principal amount of KRW 1.0 billion ($0.7 million) with an interest rate of 3.5%. In July 2024, the Company executed an amendment to extend the maturity date to July 2025 for the principal amount of KRW 8.0 billion ($6.0 million) with an interest rate of 4.9%. Anapass, Inc., a related party, provided certificates of deposit as collateral to KEB Hana Bank to secure the Company’s obligations under this loan (see Note 8). IBK Industrial Bank In January 2017, the Company entered into a term loan agreement with IBK Industrial Bank, pursuant to which the Company borrowed KRW 9.2 billion ($6.8 million). The term loan has a maturity date in November 2024 and bears an annual interest rate of 4.9%. Note Payable (One Individual Investor) In June 2021, the Company entered into a note payable agreement with an individual investor, pursuant to which the Company borrowed $1.0 million. The note had a maturity date of June 2024 and bears an annual interest rate of 4.0%. In April 2022, the Company entered into an amendment with this one individual investor to remove the conversion right from the note payable. In June 2024, the Company executed an amendment with the individual investor to extend the maturity date from June 2024 to August 2024. In August 2024, the Company repaid this note. M-Venture Investment, Inc. In October 2021, the Company entered into a term loan and security agreement with M-Venture Investment, Inc. pursuant to which the Company borrowed KRW 5.0 billion ($3.7 million) and repaid KRW 0.6 billion ($0.4 million) and KRW 0.4 billion ($0.3 million) in 2021 and 2022, respectively, such that KRW 4.0 billion ($3.0 million) remained outstanding. The term loan bears an annual interest rate of 6.5%. In April 2024, the Company executed an amendment with M-Venture Investment, Inc., pursuant to which the Company repaid KRW 2.0 billion ($1.5 million) in April 2024. In May 2024, the Company repaid the term loan in full. In April 2022, the Company entered into a term loan and security agreement with M-Venture Investment, Inc., pursuant to which the Company borrowed amounts in two draws of KRW 1.0 billion ($0.7 million) and KRW 5.0 billion ($3.7 million), respectively. The term loan had a maturity date in April 2024, and each respective draw bears an annual interest rate of 6.5% and 8.7%. In April 2024, the Company executed an amendment with M-Venture Investment, Inc., pursuant to which the maturity date for both draws were amended. The maturity date for the principal amount of KRW 1.0 billion ($0.7 million) was extended from April 2024 to June 2024. The maturity date for the principal amount of KRW 5.0 billion ($3.7 million) was extended from April 2024 to July 2024. In July 2024, the Company partially repaid the loan of KRW 1.0 billion ($0.7 million) and transferred the remaining balance (“M-Venture Loan”) as further discussed below. Mujin Electronics Co., Ltd. In July 2024, the Company executed agreement with M-Venture Investment, Inc. and Mujin Electronics Co., Ltd., in which Mujin Electronics Co., Ltd. fully assumed the remaining M-Venture Loan with the same principal amount of KRW 5.0 billion ($3.7 million). The maturity date of assumed loan is January 2025, with an interest rate of 6.8%. Anapass, Inc., Related Party In July 2016, the Company entered into a loan agreement with Anapass, Inc. pursuant to which the Company borrowed KRW 6.0 billion ($4.5 million) in a term loan. Interest only payments are due monthly at 5.5% per annum and the principal amount of the term loan is due on the maturity date of July 2024. In July 2024, the Company and Anapass, Inc. amended the loan agreement to extend the maturity date from July 2024 to July 2025. The loan is collateralized by the Company’s assets as described under the Assets Pledged as Collateral (see Note 8). In May and September 2022, the Company entered into two term loan agreements with Anapass, Inc. pursuant to which the Company borrowed KRW 3.0 billion ($2.2 million) and KRW 4.0 billion ($3.0 million). The term loans had respective maturity dates in May 2024 and September 2024 and both bear an annual interest rate of 5.5%. In May 2024, the Company executed an amendment with Anapass, Inc., to extend the maturity date from May 2024 to May 2025 for the term loan entered in May 2022. In September 2024, the Company executed an amendment with Anapass, Inc., to extend the maturity date from September 2024 to September 2025 for the term loan entered in September 2022. i Best Investment Co., Ltd Between 2022 and 2023, the Company entered into multiple term loans and security agreements with i Best Investment Co., Ltd pursuant to which it borrowed principal amounts in six draws with an aggregate principal balance of KRW 14.0 billion ($10.3 million). All of the term loans had a maturity date in June 2024 and bear an annual interest rate of 6.5%. In June 2024, the Company executed an amendment with the I Best Investment Co., Ltd to extend the maturity date from June 2024 to August 2024 for its first draw, fifth draw and sixth draw. In December 2023, the Company made a $0.8 million repayment of the outstanding principal and interest on its second draw. In March 2024, the Company repaid $2.3 million of the outstanding principal and interest amount of its fourth draw. In June 2024, the Company repaid in full of the term loans with a principal amount of $1.4 million outstanding on its third draw. In July 2024, the Company executed an amendment with i Best Investment Co., Ltd. to extend the maturity date from August 2024 to February 2025 for its first draw, fifth draw and sixth draw. Kyeongho Lee, Related Party Between 2017 and 2021, the Company entered into multiple promissory note and term loan agreements with Kyeongho Lee pursuant to which the Company borrowed (a) KRW 500.0 million ($0.4 million), and KRW 500.0 million ($0.4 million) in promissory notes, and (b) KRW 1.0 billion ($0.7 million) and KRW 110.0 million ($0.1 million) in term loans. The promissory notes have a maturity date in November 2024 and bear an annual interest rate varying from 7.5% and 9.0%. In March 2024, the Company repaid to Kyeongho Lee the term loan of KRW 1.0 billion ($0.7 million). The outstanding term loan had a maturity date in May 2024 and bears no interest. In May 2024, the Company executed an amendment with Kyeongho Lee to extend the maturity date from May 2024 to November 2024 for its term loan.

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