Long-Term Debt

12 Months Ended

Dec. 31, 2020

Long-Term Debt

Long-Term Debt

14. Long-Term Debt

In March 2019, the Company entered into a loan and security agreement, as amended (the ”Loan Agreement”), with Generate Lending, LLC (“Generate Capital”), providing for a secured term loan facility in the amount of $100 million (the “Term Loan Facility”). The Company used the proceeds to pay off in full the Company’s previous loan with NY Green Bank a Division of the New York State Energy Research & Development (“Green-Bank Loan”) and terminate and re-purchase certain equipment leases with Generate Plug Power SLB II, LLC. In connection with this transaction, the Company recognized a loss on extinguishment of debt of approximately $0.5 million during the year ended December 31, 2019. This loss was recorded in gain (loss) on extinguishment of debt, in the Company’s consolidated statement of operations. The Company borrowed an incremental $20 million in November 2019.

Additionally, during the year ended December 31, 2020, the Company, under another series of amendments to the Loan Agreement, borrowed an incremental $100 million. As part of the amendment to the Loan Agreement, the Company’s interest rate on the secured term loan facility was reduced to 9.50% from 12.00% per annum, and  the maturity date was extended to October 31, 2025 from October 6, 2022. On December 31, 2020, the outstanding balance under the Term Loan Facility was $165.8 million.

The Loan Agreement includes covenants, limitations, and events of default customary for similar facilities. Interest and a portion of the principal amount is payable on a quarterly basis.  Principal payments will be funded in part by releases of restricted cash, as described in Note 22, “Commitments and Contingencies, as restated.” Based on the amortization schedule as of December 31, 2020, the aforementioned loan balance under the Term Loan Facility will be fully paid by October 31, 2025.  The Company is in compliance with, or has obtained waivers for, all debt covenants.  

The Term Loan Facility is secured by substantially all of the Company’s and the guarantor subsidiaries’ assets, including, among other assets, all intellectual property, all securities in domestic subsidiaries and 65% of the securities in foreign subsidiaries, subject to certain exceptions and exclusions.

The Loan Agreement provides that if there is an event of default due to the Company’s insolvency or if the Company fails to perform in any material respect the servicing requirements for fuel cell systems under certain customer agreements, which failure would entitle the customer to terminate such customer agreement, replace the Company or withhold the payment of any material amount to the Company under such customer agreement, then Generate Capital has the right to cause Proton Services Inc., a wholly owned subsidiary of the Company, to replace the Company in performing the maintenance services under such customer agreement.

Additionally, $1.75 million was paid to an escrow account related to additional fees due in connection with the Green-Bank Loan if the Company does not meet certain New York State employment and fuel cell deployment targets by March 2021.

The amount of escrow expected to be received of $700 thousand was recorded in short-term other assets on the Company’s consolidated balance sheets as of December 31, 2020. During the year ended December 31, 2020, the Company received $250 thousand from escrow related to the New York state employment targets.  The Company also received $700 thousand related to the New York State employment targets in March 2021.  The Company did not meet the deployment targets and charged-off $800 thousand to interest expense during December, 2020.

As of December 31, 2020 the Term Loan Facility requires the principal balance as of each of the following dates not to exceed the following (in thousands):

December 31, 2021	127,317
December 31, 2022	93,321
December 31, 2023	62,920
December 31, 2024	33,692
December 31, 2025	—