Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.23.3
Notes Payable
 3 Months Ended
Sep. 30, 2023
Notes Payable [Abstract]  
Notes Payable

Note 10. Notes Payable

 

Convertible Senior Notes due 2027

 

The following table summarizes convertible debt as of September 30, 2023 (in thousands):

 

    Maturity
Date		     Stated
Interest
Rate		     Conversion
Price		     Face
Value		     Remaining
Debt
(Discount)		     Fair
Value of
Embedded
Derivatives		     Carrying
Value		  
Long Term convertible notes payable                                          
6.0% convertible senior notes     06/15/2027       6.00 %   $         4.71     $ 44,000     $ (2,578 )   $         66     $ 41,488  
Ending Balance as of September 30, 2023                           $ 44,000     $ (2,578 )   $ 66     $ 41,488  

 

The following table summarizes convertible debt as of June 30, 2023 (in thousands):

 

    Maturity
Date		     Stated
Interest
Rate		     Conversion
Price		     Face
Value		     Remaining
Debt
(Discount)		     Fair
Value of
Embedded
Derivatives		     Carrying
Value		  
Long Term convertible notes payable                                          
6.0% convertible senior notes     06/15/2027       6.00 %   $ 4.71     $ 44,000     $ (2,733 )   $ 2,080     $ 43,347  
Ending Balance as of June 30, 2023                           $ 44,000     $ (2,733 )   $ 2,080     $ 43,347  

 

Interest expense on the Notes during the three months ended September 30, 2023 included contractual interest of $660 thousand and debt discount amortization of $155 thousand.

 

GDSI Acquisition Promissory Note

 

The Company issued a secured promissory note (the “Promissory Note”) in the original principal amount of $4.0 million issued by Akoustis, Inc. to the Sellers’ representative in connection with the Company’s acquisition of GDSI in January 2023. The Sellers’ representative is a current employee of the Company. The Promissory Note does not bear interest, is subject to partial prepayment (reduction of the outstanding principal amount down to $1.3 million) on the second anniversary of the Closing Date, and is payable in full on the third anniversary of the Closing Date. The Purchaser can reduce the principal amount of the Promissory Note (i) to satisfy certain post-closing adjustments to the Transaction purchase price, (ii) to satisfy the Sellers’ indemnification obligations under the Purchase Agreement, and (iii) if GDSI’s President is terminated for cause or due to disability or resigns without good reason prior to maturity the Promissory Note will be cancelled in its entirety. The Promissory Note is secured by certain of the Purchaser’s and GDSI’s assets. In the event of certain events of default, including failure to pay amounts due under the Promissory Note and certain bankruptcy events, the outstanding principal amount of the Promissory Note will become immediately due. The Promissory Note will be recognized on a straight line basis over the term of the Promissory Note as compensation expense. The Company recorded compensation expense totaling $333 thousand for the three months ended September 30, 2023 in “General and administrative expenses” in the Condensed Consolidated Statements of Operations with the associated liability included in “Promissory notes payable” in the Condensed Consolidated Balance Sheets.