NOTES PAYABLE AND CONVERTIBLE NOTES

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

NOTES PAYABLE AND CONVERTIBLE NOTES

NOTES PAYABLE AND CONVERTIBLE NOTES

The Company’s notes payable and convertible notes are as follows:

Terms	June 30, 2024		December 31, 2023
Secured promissory notes dated May 10, 2019, as subsequently amended, with a related party which mature on May 1, 2026 and bear interest at a rate of 16.5% per annum through May 1, 2024 and 12% per annum thereafter	$	28,939	$	47,491
Convertible promissory note dated October 6, 2021, which matures on October 6, 2024 and bears interest at a rate of 10% per annum	16,824		15,818
Promissory note dated October 13, 2023 under the senior secured credit facility which matured on December 1, 2023 and bears interest at a rate of 15.5% per annum. The Company is currently in negotiations to amend the terms of the agreement.	3,410		3,410
Unsecured convertible promissory note at $0.50 per share due December 18, 2024 at 12% per annum with monthly cash payments of $50,000 beginning January 15, 2024 through maturity	2,142		2,051
Promissory note issued for the acquisition of Island due October 25, 2026 at 6% per annum	11,329		11,030
Secured promissory note due January 1, 2024 at 1.5% monthly interest through November 30, 2022 and 2% monthly interest through maturity	3,078		2,734
Unsecured promissory note due November 30, 2024 with monthly interest payments at 12% per annum through September 2023 and 11% per annum through November 2024	1,639		1,630
Various	7		9
Total Notes Payable and Convertible Notes	$	67,368	$	84,173

LI Lending LLC

On May 10, 2019, the Company entered into a loan agreement with LI Lending LLC ("LI Lending"), a related party, for $50.0 million, of which $45.0 million was drawn as of June 30, 2024. On January 29, 2024, the Company entered into the second amendment to the restated loan agreement to convert $23.0 million of the loan into 244,680,852 SVS and issued LI Lending a warrant to purchase 36,702,127 SVS at a price of C$0.14, reducing the loan to $28.9 million. The warrant was determined to be a derivative liability under ASC 815, see Note 7 for further information. In addition, the Company issued LI Lending an RSU agreement providing that, in the event of a financing by the Company on or before July 29, 2024 at less than C$0.125 per SVS, LI Lending would be entitled to receive a number of shares necessary to restore it to 18.43% of the voting interests of the Company. No financing that would trigger the RSU has occurred as of June 30, 2024. See Note 7 for further information regarding the fair value of the restricted stock units. The parties agreed that accrued interest in the amount of $0.2 million would be paid-in-kind. The second amendment was deemed to be a substantial modification under ASC Subtopic 470-50 and a loss on extinguishment of debt of $11.8 million was recorded in the consolidated statement of operations for the six months ended June 30, 2024.

For the three months ended June 30, 2024 and 2023, the Company recognized accrued interest expense of $0.9 million and $1.9 million, respectively, on the related party loan and made $0.6 million and $1.6 million, respectively, in cash payments of principal and interest to the related party. For the six months ended June 30, 2024 and 2023, the Company recognized accrued interest expense of $1.8 million and $3.7 million, respectively, on the related party loan and made $1.4 million and $3.2 million, respectively, in cash payments of principal and interest to the related party. See Note 14 for further discussion of this related party transaction.

October 2021 Convertible Note

On October 6, 2021, the Company entered into a convertible promissory note for $15.0 million that is exercisable into SVS for $1.03 per share at any time at the option of the holder. The notes bear interest at 6% per annum and mature on October 6, 2024 upon which any remaining balance is payable in cash. All accrued and unpaid interest is payable in cash on an annual basis beginning on October 6, 2022.

On October 6, 2023, the Company amended the October 2021 Convertible Note to defer payment of accrued interest until the earlier of the maturity date, a change of control, or event of default under the loan. In addition, the outstanding balance, including any deferred interest payments, accrues interest at a rate of 10.0% per annum through maturity, and the conversion price was amended to $0.23 per share.

As of June 30, 2024, payments of principal and interest totaling $1.1 million have been made for this loan. As of June 30, 2024 and December 31, 2023, the unamortized discount balance related to the October 2021 Convertible Note was $0.2 million and $0.5 million, respectively, with a remaining amortization period of 0.25 years and 0.75 years, respectively. For the six months ended June 30, 2024 and 2023, the Company recognized interest expense of $0.8 million and $0.5 million, respectively, and accretion of debt discount of $0.2 million and $0.1 million, respectively, related to the October 2021 Convertible Note.