DEBT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

DEBT

DEBT

Long-term debt consists of the following (in thousands):

	September 30, 2024		December 31, 2023
Term loan	$	—	$	139,401
Debt issuance costs and debt discount	—		(15,970)
Property, plant and equipment finance agreement	—		90
	—		123,521
Less long-term debt due within one year	—		123,465
Total long-term debt, net of portion due within one year	$	—	$	56

On December 1, 2021, the Company entered into a Loan, Guaranty and Security Agreement (the “LGSA”) with Wilmington Trust, National Association as administrative agent, which was subsequently amended in 2022 and 2023 and consisted of total Term Loans of $146.0 million (the “Term Loans”) with an interest rate of 11.5% and a maturity date of December 1, 2024.

Subsequent to an amendment to the LGSA in March 2023 (the “Fifth Amendment”), the Company was required to pay amounts subject to an excess cash flow sweep, as defined, on a quarterly basis which automatically extended to the maturity of the Term Loans in the event the Company repaid at least $40.0 million of the principal balance of the Term Loans by April 1, 2024, which the Company did in February 2024. Interest payments were due quarterly in arrears prior to the Fifth Amendment and were due monthly in arrears subsequent to the Fifth Amendment. The Company had the option to prepay all or any portion of the Term Loans in increments of at least $5.0 million subject to certain prepayment fees equal to an amount of 2% of the prepaid principal, applicable to 85% of the outstanding principal. Certain events, as described in the LGSA, required mandatory prepayment.

The Company made no repayments on the principal balance of the Term Loans during the three and nine months ended September 30, 2023. During the fourth quarter of 2023, the Company repaid $6.6 million of the outstanding principal balance of the Term Loans which represented the excess cash flow sweep for the quarter ended September 30, 2023. As of December 31, 2023, certain of the investors in the Term Loans were related parties due to cumulative voting control by members of the Company’s management and an individual who was then a member of the Company’s board of directors. The outstanding principal amounts under the Term Loans held by related party entities were $12.9 million as of December 31, 2023. During the three and nine months ended September 30, 2024, the Company repaid $75.8 million and $139.4 million of the principal balance of the Term Loans, respectively, including voluntary prepayments of $56.0 million and $74.5 million, respectively. In connection with the voluntary prepayments, the Company recorded a loss on extinguishment of debt of $4.3 million and $6.3 million, respectively, which is included in the condensed consolidated statement of operations for the three and nine months ended September 30, 2024, consisting of $1.0 million and $1.3 million of prepayment fees, respectively, and the immediate write-off of $3.3 million and $5.0 million, respectively, of unamortized debt discount associated with the principal repaid. The Company has fully repaid the principal balance of the Term Loans as of September 30, 2024.

In 2022, in connection with First and Third Amendments to the LGSA, the Company issued warrants to the lenders to purchase 8,455,410 shares of Common Stock at $0.01 per share. During the three and nine months ended September 30, 2023, 1,610,184 and 2,740,587 warrants issued in connection with the LGSA, respectively, were exercised for issuance of the same number of shares of Common Stock for aggregate proceeds to the Company of $16,000 and $27,000, respectively. In March 2023, in connection with the Fifth Amendment to the LGSA the Company entered into a warrant agreement (the “Warrant Agreement”) to issue the following warrants to the lenders: (i) 27,759,265 warrants to purchase an aggregate number of shares of the Company’s Common Stock equal to 10.0% of the fully diluted equity of the Company as of the Fifth Amendment effective date with an exercise price of $0.01 per share of the Company’s Common Stock (the “Penny Warrants”) and (ii) 13,879,630 warrants to purchase an aggregate number of shares of the Company’s Common Stock equal to 5.0% of the fully diluted equity of the Company as of the Fifth Amendment effective date with an exercise price of $1.00 per share of the Company’s Common Stock (the “Dollar Warrants”). The Penny Warrants are exercisable during the period beginning on April 1, 2024 and ending on December 31, 2025, and the Dollar Warrants are exercisable during the period beginning on April 1, 2024 and ending on December 31, 2026. In March 2023, in connection with the issuance of the warrants pursuant to the Warrant Agreement, the Company entered into a registration rights agreement pursuant to which the Company has agreed to provide customary shelf and piggyback registration rights to the LGSA lenders with respect to the common stock issuable upon exercise of the warrants described above.

During the three and nine months ended September 30, 2024, 2,292,200 and 31,534,861 warrants issued in connection with the LGSA, respectively, were exercised for issuance of the same number of shares of Common Stock, comprising 0 and 27,617,539 Penny Warrants, respectively, and 2,292,200 and 3,917,322 Dollar Warrants, respectively, for aggregate proceeds to the Company of $2.3 million and $4.2 million, respectively. All warrants granted by the Company as a component of debt transactions are classified as equity in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.

In connection with the Term Loans under the LGSA, the Company issued to the holders of the Term Loans certain shares of Common Stock, warrants to purchase shares of Common Stock and incurred issuance costs and up front fees, which included $29.8 million in December 2021 in connection with the original issuance, $3.5 million in July 2022 in connection with the First Amendment, $2.9 million in October 2022 in connection with the Third Amendment, and $16.0 million in March 2023 in connection with the Fifth Amendment. These amounts represented debt issuance costs and debt discount which were being amortized as an adjustment of interest expense over the term of the LGSA.

During the three and nine months ended September 30, 2024, the Company amortized total debt issuance costs and debt discount of $0.2 million and $10.9 million, respectively, which was recorded as interest expense in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2023, the Company amortized total debt issuance costs and debt discount of $6.0 million and $16.0 million, respectively, of which $6.0 million and $14.3 million, respectively, was recorded as interest expense in the condensed consolidated statements of operations, $0 and $1.2 million, respectively, was capitalized interest in property, plant and equipment, net in the condensed consolidated balance sheet, and $0 and $0.5 million, respectively, was capitalized interest in equity in net assets of investee in the condensed consolidated balance sheet. In connection with the voluntary prepayments of the LGSA, the Company wrote-off unamortized debt discount $3.3 million and $5.0 million during the three and nine months ended September 30, 2024, respectively, which is included in loss on extinguishment of debt in the condensed consolidated statement of operations for the three and nine months ended September 30, 2024