Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Note 5. Debt

The following is a summary of short- and long-term debt:

(in thousands)	March 31, 2022			December 31, 2021
2020 MFS Loan	$	296		$	314
Manufacturers Capital Promissory Notes		907			968
Related Party - Energize Convertible Debt		-			7,600
2020 SVB Loan		9,392			10,225
2021 SVB Loan		20,868			20,800
Related Party - Drive Capital Convertible Debt		-			3,000
Related Party - ECP Holdings Convertible Debt		-			7,000
Total Outstanding Principal		31,463			49,907
Less: Discounts and deferred financing fees		(2,542	)		(7,403	)
Total Outstanding Debt		28,921			42,504
Fair Value of Derivatives		-			4,395
Total Debt and Derivative Liabilities	$	28,921		$	46,899

The following is the summary of future principal repayments of debt:

(in thousands)	March 31, 2022
Remainder of 2022	$	12,147
2023		15,160
2024		3,949
2025		207
Total	$	31,463

2021 SVB Loan

On February 4, 2022, the 2021 Silicon Valley Bank (“SVB”) Loan was amended to extend the maturity date from the Closing Date to April 3, 2023 and required payment of $2.0 million of the $20.0 million outstanding principal balance upon consummation of the Business Combination. This amendment also added the original $0.8 million fee due at the Closing Date to the amended loan’s outstanding principal balance, deferring its repayment until maturity. In exchange for the extension of the loan, Fast Radius will pay an additional fee of $2.1 million due at maturity. The Company will make six interest-only payments beginning March 1, 2022 and will begin paying $2.4 million in principal beginning September 1, 2022. The interest rate on the term loan is the prime rate + 6.0%.

Related Party Convertible Notes – Energize Ventures Fund

On March 12, 2021, Legacy Fast Radius entered into a note purchase agreement with Energize Ventures Fund LP, Energize Growth Fund I LP, EV FR SPV and Ironspring Venture Fund I-FR, LP, all of which were existing stockholders or affiliates of existing shareholders of Legacy Fast Radius, for convertible promissory notes (collectively the “Related Party Convertible Notes I”). Legacy

Fast Radius received the principal of $7.6 million on April 13, 2021 at closing. The Related Party Convertible Notes had a stated interest rate of 6%, with all accrued interest and principal due at maturity, which was scheduled to be April 13, 2023. Further, warrants to purchase a maximum of 140,000 shares with an exercise price of $0.01 were issued in conjunction with the closing of the Related Party Convertible Notes I. The warrants were determined to be equity classified and were recorded as a discount to the Related Party Convertible Notes I. The Related Party Convertible Notes I contained a share settlement redemption feature that qualified as a derivative liability and required bifurcation. The derivative had a fair value of $2.5 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the condensed consolidated balance sheet. For the three months ended March 31, 2022, the Company recognized a mark to market gain associated with the derivative of $47 thousand.

The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes I and Related Party Derivative Liability with Energize Ventures:

(in thousands)	Three Months Ended March 31, 2022
Contractual interest expense		44
Amortization of deferred financing costs and convertible debt discount		184
Total Interest Expense		228
Effective interest rate		58.3	%

The following provides a summary of the convertible notes and derivatives:

	As of
(in thousands)	December 31, 2021
Unamortized deferred issuance costs, derivative, and warrants	$	3,534
Net carrying amount of convertible note		4,066
Principal value of convertible note	$	7,600
Fair value of convertible note and derivative liability	$	9,936
Fair value of convertible note excluding derivative liability	$	7,446
Fair value Level	Level 3

For further information on fair value measurements, refer to Note 12.

Related Party Convertible Notes – Drive Capital Fund

On August 23, 2021, Legacy Fast Radius entered into a Note Purchase Agreement with Drive Capital Fund II LP and Drive Capital Ignition Fund II LP (existing stockholders of Legacy Fast Radius) for convertible promissory notes (collectively the “Related Party Convertible Notes II”). Legacy Fast Radius received funding of $3.0 million on August 24, 2021 at closing. The Notes had a stated interest rate of 6%, with all accrued interest and principal due at maturity, which was scheduled to be August 23, 2023. These Related Party Convertible Notes II contained a share settlement redemption feature that qualified as a derivative liability and required bifurcation. The derivative had a fair value of $0.6 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the three months ended March 31, 2022, the Company recognized a mark to market loss associated with the derivative of $5 thousand.

The following provides a summary of interest expense on the Company’s Related Party Convertible Notes II and Related Party Derivative Liability with Drive Capital:

	Three Months Ended March 31,
(in thousands)	2022
Contractual interest expense		17
Amortization of deferred financing costs and convertible debt discount		24
Total Interest Expense		41
Effective interest rate		17.1	%

The following provides a summary of the convertible notes and derivatives:

	As of
(in thousands)	December 31, 2021
Unamortized deferred issuance costs, derivative, and warrants	$	474
Net carrying amount of convertible note		2,526
Principal value of convertible note	$	3,000
Fair value of convertible note and derivative liability	$	3,390
Fair value of convertible note excluding derivative liability	$	2,830
Fair value Level	Level 3

Related Party Convertible Notes – Energy Capital Partners Holdings

On October 26, 2021, Legacy Fast Radius entered into a Note Purchase Agreement with Energy Capital Partners Holdings, LP for convertible promissory notes (collectively the “Related Party Convertible Notes III”). Legacy Fast Radius received funding of $7.0 million on October 26, 2021 at closing. The Notes had a stated interest rate of 6%, with all accrued interest and principal due at maturity, which was scheduled to be October 26, 2023. These Related Party Convertible Notes III contained a share settlement redemption feature that qualified as a derivative liability and required bifurcation. The derivative had a value of $1.3 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the three months ended March 31, 2022, the Company recognized a mark to market loss associated with the derivative of $12 thousand.

The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes III and Related Party Derivative Liability with Energy Capital Partners Holdings:

	Three Months Ended March 31,
(in thousands)	2022
Contractual interest expense		40
Amortization of deferred financing costs and convertible debt discount		52
Total Interest Expense		92
Effective interest rate		16.3	%

The following provides a summary of the convertible notes and derivatives:

	As of
(in thousands)	December 31, 2021
Unamortized deferred issuance costs, derivative, and warrants	$	1,130
Net carrying amount of convertible note		5,870
Principal value of convertible note	$	7,000
Fair value of convertible note and derivative liability	$	7,829
Fair value of convertible note excluding derivative liability	$	6,484
Fair value Level	Level 3

Immediately prior to the completion of the Business Combination, the Related Party Convertible Notes I, II and III, along with unpaid and accrued interest, were converted into 990 thousand shares of common stock of Legacy Fast Radius (2.0 million shares of Common Stock post Business Combination).