v3.25.1
Current and Long-Term Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Current and Long-Term Debt
5.
CURRENT AND LONG-TERM DEBT
Current and long-term obligations, net, are shown in the table below:
 
    
December 31, 2024
     
December 31, 2023
  
2026 Notes
    $ 185,000      $ 185,000
Term debt
      —         13,228
2027 Convertible Notes
      25,450        —   
2025 Convertible Notes
      59,500        74,500
Mortgage Note
      42,923        43,500
Acquisition related promissory notes
      —         1,500
  
 
 
     
 
 
  
     312,873      317,728
Unamortized debt discount
      (6,156 )       (6,598 ) 
Unamortized deferred financing costs
      (4,744 )       (7,747 ) 
  
 
 
     
 
 
  
Total debt, net
      301,973      303,383
Less current portion, net*
      (52,461 )       (5,905 ) 
  
 
 
     
 
 
  
Long-term portion
    $ 249,512    $ 297,478
  
 
 
     
 
 
  
 
*
The current portion of the debt includes scheduled payments on the mortgage notes, acquisition related promissory notes and acquisition related notes payable, net of corresponding portions of the unamortized debt discount and unamortized deferred financing costs.
 
The Company was in compliance with all financial covenants and was not in default of any provisions under any of its debt arrangements as of December 31, 2024.
2026 Notes
On February 3, 2022, the Company closed a private placement (the “February 2022 Private Placement”) of $185,000 aggregate principal amount of 9.50% senior-secured first-lien notes due 2026 (the “2026 Notes”) and received aggregate gross proceeds of $153,250. The 2026 Notes are senior secured obligations of the Company and were issued at 100.0% of face value. The 2026 Notes accrue interest in arrears which is payable semi-annually and mature on February 3, 2026, unless earlier redeemed or repurchased. The Company may redeem the 2026 Notes at par, in whole or in part, on or after February 3, 2024, as more particularly described in the fourth supplemental trust indenture governing the 2026 Notes. In connection with the offering of the 2026 Notes, the Company exchanged $31,750 of the Company’s existing 13.0% senior secured first-lien notes (the “13.0% Term Debt”), pursuant to private agreements in accordance with the trust indenture, for an equivalent amount of 2026 Notes plus accrued but unpaid interest and any negotiated premium thereon.
The premium and paid interest were paid out of funds raised from the February 2022 Private Placement. The total unamortized debt and debt issuance costs of $2,153, related to the modified portion of the 13.0% Term Debt, will be amortized over the term of the 2026 Notes using the effective interest method. The Company incurred $7,189 in creditor fees in connection with the modified 13.0% Term Debt and 2026 Notes and $301 in third-party legal fees related to 2026 Notes which were capitalized and will be amortized over the term of the 2026 Notes using the effective interest rate method.
2024 Notes
As further described in Note 5 under the
sub-heading
“Term debt” of the Financial Statements incorporated by reference in the Company’s Form
10-K
for the year ended December 31, 2023, on October 23, 2023, the Company retired $25 million of its 13% Notes due May 2024 (the “2024 Notes”) through a proportional redemption process.
The 2024 Notes were paid in full on May 14, 2024. The Company incurred financing costs of $3,373 in connection with the issuance of these 2024 Notes.
March 2027 Convertible Notes
On March 19, 2024, the Company closed a private placement (the “March 2024 Private Placement”) of $25.75 million aggregate principal amount of 9.0% senior-secured first-lien notes due 2027 (the “2027 Notes”) and received aggregate gross proceeds of $15.6 million. The 2027 Notes are senior secured obligations of the Company and were issued at 80.0% of face value. The 2027 Notes accrue interest in arrears which is payable semi-annually and mature on March 19, 2027. In connection with the offering of the 2027 Notes, the Company exchanged $5 million of the Company’s existing 6.0% 2025 Convertible Notes. Through December 31, 2024, 983.604 shares were issued to convert $300 principal.
The principal amount of the 2027 Convertible Notes and the conversion price are denominated in U.S. dollars. As the functional currency of the Company is Canadian dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2027 Convertible Notes therefore represent an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2027 Convertible Notes, the Company is unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $2,632 on the date of issuance of debt with a corresponding debt discount and debt issuance costs of $5,952, reflected as a reduction to the carrying value of the 2027 Notes. The Company fair values the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative are recognized in the condensed consolidated statements of operations and comprehensive loss. The debt premium and debt issuance costs is amortized over the term of the 2027 Notes. Notes are impacted by the 2025 Debt Transaction.
2025 Convertible Notes
On June 29, 2021, the Company completed an offering of 6.0% Secured Convertible Notes Due 2025 (“2025 Convertible Notes”) for an aggregate principal amount of $74.5 million. The 2025 Convertible Notes are senior secured obligations of the Company and will accrue interest payable semiannually in arrears and mature on June 29, 2025, unless earlier converted, redeemed, or repurchased. The 2025 Convertible Notes shall be convertible, at the option of the holder, from the date of issuance until the date that is 10 days prior to
 
their maturity date into Common Shares of the Company at a conversion price equal to $6.49 payable on the business day prior to the date of conversion, adjusted downwards for any cash dividends paid to holders of Common Shares and other customary adjustments. The Company may redeem the 2025 Convertible Notes at par, in whole or in part, on or after June 29, 2023, if the volume weighted average price of the Common Shares trading on the Canadian Stock Exchange or Cboe Canada for 15 of the 30 trading days immediately preceding the day on which the Company exercises its redemption right, exceeds 120.0% of the conversion price of the 2025 Convertible Notes at a Redemption Price equal to 100.0% of the principal amount of the 2025 Convertible Notes redeemed, plus accrued but unpaid interest, if any, up to but excluding the Redemption Date.
The 2025 Convertible Notes require interest-only payments until June 29, 2025, at a rate of 6.0% per annum, payable semi-annually in June and December and commencing in December 2021. The 2025 Convertible Notes are due in full on June 29, 2025. The Company incurred financing costs of $3,190 in connection with the 2025 Convertible Notes. The principal amount of the 2025 Convertible Notes and the conversion price are denominated in U.S. dollars. As the functional currency of the Company is Canadian dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2025 Convertible Notes therefore represent an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2025 Convertible Notes, the Company is unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $15,099 on the date of issuance of debt with a corresponding debt discount, reflected as a reduction to the carrying value of the 2025 Convertible Notes. The Company fair values the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative are recognized in the consolidated statements of operations and comprehensive loss. The debt discount is amortized over the term of the 2025 Convertible Notes.
January 2024 Debt Exchange
On January 22, 2024, the Company entered into the Exchange Agreement, as amended on June 30, 2024 and September 30, 2024, (as amended, the “Exchange Agreement”), with certain holders (the “Holders”) of the Company’s 6.0% senior secured 2025 Convertible Notes, pursuant to which the Company agreed to the Repurchase of up to $25 million principal amount of the 2025 Convertible Notes in exchange for Common Shares (the “January 2024 Debt Exchange”).
Pursuant to the terms of the Exchange Agreement, the Holders agreed to:
 
*
by January 31, 2024, transfer $5 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$0.41 per Common Share and the 12.5% discount to the 5 days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice;
 
*
provided that the
five-day
volume weighted average price of the Common Shares on the Exchange is greater than C$0.47 as of the close of trading at 4:01pm on January 31, 2024, transfer $5 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at the Initial Exchange Price on or prior to February 29, 2024; and
 
*
provided that the February Exchange is completed and the daily volume weighted average price of the Common Shares on Cboe is greater than C$0.87 for 5 consecutive trading days, provided that, the trading volume of the Common Shares on Cboe was equal to or greater than 600,000 Common Shares on the applicable trading dates, from the period commencing on January 1, 2024 and ending on December 31, 2024), transfer in three separate equal tranches, an aggregate of $15 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$0.57 per Common Share and the 12.5% discount to the 5 days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice, in each case, subject to adjustment in certain instances, on or prior to December 31, 2024.
Through December 31, 2024, $10 million of the potential $25 million exchange had been completed, with approximately $10 million remaining available for exchange as $5 million were separately exchanged into the Company’s 2025 Notes, as described above. The term of the Exchange Agreement expired as of January 31, 2025.
Mortgages
In December 2021, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $20,000 mortgage on real property in New York and carries interest at a variable rate per annum equal to the Wall Street Prime Rate (“Index”) plus 2.25%. The debt is repayable in 59 monthly installments and a final balloon payment due on January 1, 2027, which is estimated at $18,133 as of December 31, 2024. In connection with this mortgage, the Company incurred financing costs of $655. In June 2022, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $16,500 mortgage on real property in New Jersey and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and a final balloon payment due on July 15, 2027, which is estimated at $15,734 as of December 31, 2024. In connection with this mortgage, the Company incurred financing costs of $209.
 
On August 10, 2023, the Company entered into two term loans and security agreements with a bank as follows:
 
*
The first agreement provides for a $6,250 mortgage on real property in Maryland and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $195 and netted $2,903 after the repayment of a prior outstanding mortgage on the property.
 
*
The second agreement provides for a $1,800 mortgage on real property in Delaware and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $77 and netted $1,723.
The following table summarizes the scheduled principal payments on the Company’s outstanding indebtedness as of December 31, 2024:
 
    
2025
     
2026
     
2027
     
2028
     
2029
     
Thereafter
     
Total
  
2027 Convertible Notes
    $ —     $ —     $ 25,450    $ —     $ —     $ —     $ 25,450
2025 Convertible Notes
      59,500      —         —         —         —         —         59,500
2026 Notes
      —         185,000      —         —         —         —         185,000
Mortgages Notes
      720      16,484      18,050      7,669      —         —         42,923
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
   $ 60,220    $ 201,484    $ 43,500    $ 7,669    $ —     $ —     $ 312,873
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
The Company was in compliance with all financial covenants and was not in default of any provisions under any of its debt arrangements as of December 31, 2024.
The following table presents information about the current and long-term debt obligations of the Company as of December 31, 2024:
 
    
Balance,
January 1
     
Borrowing
     
Acquisition
related
     
Conversion/Exchanges
    
Repayments
    
Balance,
December 31
  
Term debt
    $ 13,228    $ —     $ —     $ —    $ (13,228 )    $ — 
2025 Convertible Notes
      74,500      —         —         (10,000 )      (5,000 )      59,500
Mortgages Notes
      43,500      —         —         —        (577 )      42,923
2026 Notes
      185,000      —         —         —        —        185,000
2027 Convertible Notes
      —         25,750      —         (300 )      —        25,450
Acquisition related promissory notes
      1,500      —         —         —        (1,500 )      —   
  
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
   $ 317,728    $ 25,750    $ —     $ (10,300 )    $ (20,305 )    $ 312,873
  
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
The following table summarizes the scheduled principal payments on the Company’s outstanding indebtedness as of December 31, 2023:
 
    
Balance,
January 1
     
Borrowing
     
Acquisition
related
     
Conversion/Exchanges
     
Repayments
    
Balance,
December 31
  
Term debt
    $ 38,215    $ —     $ —     $ —     $ (24,987 )    $ 13,228
2025 Convertible Notes
      74,500      —         —         —         —        74,500
Mortgages Notes
      35,965      8,050      —         —         (515 )      43,500
2023 Convertible Notes
      5,600      —         —         —         (5,600 )      —   
2026 Notes
      185,000      —         —         —         —        185,000
Acquisition related real estate notes
      7,000      —         —         —         (7,000 )      —   
Acquisition related promissory notes
      3,000      —         —         —         (1,500 )      1,500
Acquisition related note payable
      3,214      —         —         —         (3,214 )      —   
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
   $ 352,494    $ 8,050    $ —     $ —     $ (42,816 )    $ 317,728
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
 
The Company was in compliance with all financial covenants and was not in default of any provisions under any of its debt arrangements as of December 31, 2024 and December 31, 2023.
Total interest and amortization expense on the Company’s debt obligations for the years ended December 31, 2024, 2023 and 2022 were as follows:
 
    
Year Ended
  
    
December 31,
2024
     
December 31,
2023
     
December 31,
2022
  
Interest expense on debt
    $ 29,573    $ 41,900    $ 40,123
Amortization of debt discount
    $ 5,592    $ 5,783    $ 5,327
Amortization of debt premium
    $ —     $ —     $ (164 ) 
Amortization of debt issuance costs
    $ 3,805    $ 3,569    $ 3,425
Other interest (expense) income, net
    $ (992 )     $ (565 )     $ (362 ) 
  
 
 
     
 
 
     
 
 
  
Total interest expense, net
    $ 37,978    $ 50,687    $ 48,349
  
 
 
     
 
 
     
 
 
  
The weighted average interest rate on the Company’s indebtedness was 8.85%.
2025 Debt Transaction
On February 27, 2025, the Company entered into a support agreement (the “
Support Agreement
”) with certain holders (the “
Supporting Noteholders
”) representing approximately 61% of the aggregate principal amount of issued Senior Notes (as defined below) regarding the exchange of their Senior Notes for new notes having a later maturity date and additional covenants, all as described herein (the “
2025 Debt Transaction
”). The Senior Notes consist of: (i) the six percent (6.0%) Senior Secured Convertible Notes due June 29, 2025 for an aggregate amount of US$59.5 million (the “
2025 Notes
”); (ii) the nine and one half percent (9.5%) Senior Secured First-Lien Notes due February 3, 2026 for an aggregate amount of US$185 million (the “
2026 Notes
”); and (iii) the nine percent (9.0%) Senior Secured Convertible Notes due March 19, 2027 for an aggregate amount of US$25.55 million (the “
2027 Notes
”, and together with the 2025 Notes and the 2026 Notes, the “
Senior Notes
”). Under the terms of the 2025 Debt Transaction, among other provisions, the holders of the 2025 Notes and the 2026 Notes will exchange their Senior Notes for an equal principal amount of 9.25% senior secured notes due December 31, 2028 (subject
to two six-month extension
options available to the Company upon payment of a 0.50% fee, payable in cash) (the “
New Senior Notes
”) and the holders of the 2027 Notes will be given the right to elect to receive either (i) an equal principal amount of New Senior Notes or (ii) an equal principal amount of newly issued 9.0% convertible notes, which will have the same conversion price as the existing 2027 Notes but will have the same extended maturity date as the New Senior Notes (the “
New Convertible Notes
”, and together with the New Senior Notes, the “
New Notes
”).