Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

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Notes Payable
9 Months Ended
Mar. 31, 2024
Notes Payable [Abstract]  
Notes Payable

Note 10. Notes Payable

 

Convertible Senior Notes due 2027

 

The following table summarizes convertible debt as of March 31, 2024 (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     $ (2,269 )   $ 22     $ 41,753  
Ending Balance as of March 31, 2024                       $ 44,000     $ (2,269 )   $ 22     $ 41,753  

 

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 Convertible Notes during the three months ended March 31, 2024 included contractual interest of $660 thousand and debt discount amortization of $152 thousand. Interest expense on the Convertible Notes during the nine months ended March 31, 2024 included contractual interest of $1,980 thousand and debt discount amortization of $464 thousand.

  

Promissory Note

 

The Company’s wholly-owned subsidiary, Akoustis, Inc. issued a secured promissory note (the “Promissory Note”) in the original principal amount of $4.0 million 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 the Sellers’ indemnification obligations under the Purchase Agreement, and (ii) 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 and $1.0 million for the three and nine months, respectively, ended March 31, 2024 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.