XML 27 R15.htm IDEA: XBRL DOCUMENT v3.24.2.u1
CONVERTIBLE SENIOR NOTES AND TERM LOAN
 3 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE SENIOR NOTES AND TERM LOAN CONVERTIBLE SENIOR NOTES AND TERM LOAN
2022 Term Loan and Warrants
As of June 30, 2024 and March 31, 2024, the Company had $225.0 million of principal amount outstanding in a senior secured term loan facility (the “2022 Term Loan”) under a term loan credit agreement (the “2022 Credit Agreement”) entered into on August 3, 2022 with Wilmington Savings Fund Society, FSB, as administrative agent, and certain affiliates of Francisco Partners (“FP”). The 2022 Term Loan matures on August 3, 2027 and bears interest at an annual rate equal to the term Standard Overnight Financing Rate ("Term SOFR") (subject to a floor of 1.00% and a credit spread adjustment of 0.10%), plus a margin of 6.50%. As of June 30, 2024, the debt discount and debt issuance costs are amortized to interest expense over the term of the 2022 Term Loan at an effective interest rate of 11.9%.
Mandatory prepayments of the 2022 Term Loan are required to be made upon the occurrence of certain events, including, without limitation, (i) sales of certain assets, (ii) receipt of certain casualty and condemnation awards proceeds, and (iii) the incurrence of non-permitted indebtedness, subject to certain thresholds and reinvestment rights. Voluntary prepayments are permitted at any time, subject to certain prepayment premiums. On May 9, 2023, the Company voluntarily prepaid without penalty $25.0 million of principal amount outstanding and $0.2 million of accrued interest on the 2022 Term Loan. The prepayment penalty of 2% on additional early prepayment of principal expired August 3, 2024. This payment had no impact on the Company's compliance with the 2022 Term Loan covenants. As of June 30, 2024, the Company was in compliance with all covenants set forth in the 2022 Credit Agreement.
The obligations under the 2022 Credit Agreement are guaranteed by the Company’s wholly-owned subsidiaries, subject to certain customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
In connection with the 2022 Credit Agreement, the Company issued detachable warrants (the “Warrants”) to affiliates of FP to purchase an aggregate of 3.1 million shares of the Company’s common stock with a five-year term and an exercise price of $7.15 per share (subject to adjustment) that represents a 27.5% premium over the closing price per share of the Company’s common stock on August 3, 2022. The Warrants are classified as liabilities measured at fair value during each reporting period as the Warrants contain certain terms that could result in cash settlement as a result of events outside of the Company’s control. As of June 30, 2024 and March 31, 2024, the fair value of the Warrants was $1.6 million and $3.3 million, respectively, and was recorded within other liabilities, non-current on the condensed consolidated balance sheets. The subsequent changes in fair value were recorded through Other income (expense), net on the Company’s consolidated statement of operations. See Note 3, Fair Value Measurements, for further details.
The following table presents the net carrying amount of the 2022 Term Loan (in thousands):
June 30, 2024March 31, 2024
Principal$225,000 $225,000 
Unamortized debt discount and issuance costs(12,282)(13,106)
Net carrying amount$212,718 $211,894 
Interest expense recognized related to the 2022 Term Loan was as follows (in thousands):
Three Months Ended June 30,
 20242023
Contractual interest expense$6,855 $6,879 
Amortization of debt discount and issuance costs824 775 
Total interest expense$7,679 $7,654 
2028 Notes
As of June 30, 2024 and March 31, 2024, the Company had $201.9 million aggregate principal amount of 4.00% convertible senior notes due 2028 (the “2028 Notes”), with debt issuance costs of approximately $5.6 million, of which 50% was paid in the form of shares of the Company's common stock.
The 2028 Notes are senior obligations of the Company that accrue interest, payable semi-annually in arrears on February 1 and August 1 of each year. The 2028 Notes will mature on February 1, 2028, unless earlier converted, redeemed or repurchased. As of June 30, 2024, the Company was in compliance with all covenants set forth in the indenture governing the 2028 Notes.
The debt discount and debt issuance costs are amortized to interest expense over the term of the 2028 Notes at an effective interest rate of 4.70%.
The following table presents the net carrying amount of the 2028 Notes (in thousands):
June 30, 2024March 31, 2024
Principal$201,914 $201,914 
Unamortized debt discount and issuance costs(3,881)(4,118)
Net carrying amount$198,033 $197,796 
Interest expense recognized related to the 2028 Notes was as follows (in thousands):
Three Months Ended June 30,
20242023
Contractual interest expense$2,039 $2,014 
Amortization of debt discount and issuance costs238 227 
Total interest expense$2,277 $2,241