BORROWINGS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BORROWINGS | BORROWINGS Senior Secured Notes In October 2022, the Company and Ginkgo executed several concurrent agreements including a Senior Secured Note Purchase Agreement (the “Ginkgo Note Purchase Agreement”), an amendment to the 2021 Technical Development Agreement (“2021 TDA”), a 2022 Technical Development Agreement (“2022 TDA”), a Pledge and Security Agreement, and Trademark and Patent Security Agreements (see Note 10 – Commitments and Contingencies). Under the terms of the Ginkgo Note Purchase Agreement, the Company issued and sold to Ginkgo and Ginkgo agreed to purchase senior secured notes (the “Senior Secured Notes”) on October 14, 2022 (the “Notes Issuance Date”), in the aggregate original stated principal amount of $30 million. Upon its execution, the Ginkgo Note Purchase Agreement required the Company to pay Ginkgo $10.0 million as an upfront payment for future technical services to be provided by Ginkgo under the 2022 TDA. The remainder of the proceeds from the Senior Secured Notes issuance may be used by the Company for working capital and general corporate purposes. The Senior Secured Notes initially matured on October 14, 2024 (the "Maturity Date") or earlier upon an event of default as defined by the Ginkgo Note Purchase Agreement. The Ginkgo Note Purchase Agreement initially required quarterly interest payments on the outstanding principal amount of the Notes, from the Notes Issuance Date until and including the Maturity Date, at a rate equal to the three-month United States Treasury Security Rate on the date three business days prior to the applicable quarterly payment date (defined as (i) the last business day of each fiscal quarter beginning on the first such date prior to issuance of the Senior Secured Notes and (ii) the Maturity Date), plus six percent. The Senior Secured Notes initially carried a default rate of interest, due upon the occurrence and during events of default, as defined in the Ginkgo Note Purchase Agreement, of an incremental three percent. Principal payments were initially due quarterly, starting in the first quarter subsequent to a qualified equity issuance, as defined in the Ginkgo Note Purchase Agreement, for cash proceeds greater than or equal to $50.0 million (defined as the “Amortization Date”), through the Maturity Date. Senior Secured Notes issued under the Ginkgo Note Purchase Agreement, once repaid or prepaid, may not be reborrowed. The Senior Secured Notes may be prepaid at any time without penalty or premium. The Senior Secured Notes are collateralized by substantially all of the Company’s assets, and each of its legal subsidiaries’ tangible and intangible assets. The Senior Secured Notes contain customary covenants and events of default. Additionally, the Senior Secured Notes contains subjective acceleration clauses to accelerate the Maturity Date of the Senior Secured Notes in the event that a material adverse change has occurred within the business, operations, or financial condition of the Company. At June 30, 2025, the Company believes that the likelihood of the acceleration of the Maturity Date due to the subjective acceleration clauses is remote. In December 2023, the Company entered into an amendment to modify the Ginkgo Note Purchase Agreement (“Ginkgo NPA Amendment”). Under the terms of the modification, $10.0 million of outstanding principal was exchanged for a $10.0 million convertible note (“Ginkgo Convertible Note”), which was subjected to the terms of a separate note purchase agreement with certain investors ("Bridge NPA") (See Part II, Item 8 “Financial Statements and Supplementary Data - Note 8 to the Consolidated Financial Statements - Borrowings and Other Financing Arrangements” in the 2024 Annual Report on Form 10-K for the year ended December 31, 2024 for more information about the Bridge NPA). The remaining $20.0 million of outstanding principal, $0.1 million of unamortized issuance costs, and accrued interest of $1.7 million related to the outstanding principal, were exchanged for amended senior secured notes with a principal balance of $11.8 million (the “Amended Senior Note”), a nonexclusive right to license Bolt Threads’ intellectual property relating to Mylo (“IP Transfer”), and a reduction of the prepaid balance relating to the 2022 TDA by $5.4 million (collectively, the “2023 Ginkgo Amendment”). The Amended Senior Note increased the interest rate from the Senior Secured Notes from the existing rate of treasury rate plus 6% per annum to a fixed rate of 12% per annum. In addition, the Amended Senior Note extended the Maturity Date from October 14, 2024 per the Senior Secured Notes to December 31, 2027. In April 2024, the Company and Ginkgo entered into the second amendment to the Ginkgo Note Purchase Agreement (the “Ginkgo Note Purchase Agreement Amendment No. 2”). Pursuant to the Ginkgo Note Purchase Agreement Amendment No. 2, the interest from the Ginkgo NPA Amendment effective date until the occurrence of the SPAC transaction was to be paid either entirely in cash or in kind by capitalizing and adding such accrued interest to the principal of the Amended Senior Notes at the option of the Company. In addition, upon the occurrence of the SPAC transaction, the Company was obligated to prepay an aggregate principal amount of the Amended Senior Notes equal to the sum of (i) the product of (x) $250,000 and (y) the number of interest payments that were paid in kind, plus (ii) any accrued but unpaid interest amount. After the Merger consummation in August 2024, the Company paid $0.5 million in principal of the Amended Senior Note in September 2024. At December 31, 2024, the total outstanding principal balance under the Amended Senior Note was $12.0 million and had an effective interest rate of 8.3%. The carrying value of the Amended Senior Note was $13.2 million at December 31, 2024, and is included in long-term debt, non-current, in the interim condensed consolidated balance sheet. At June 30, 2025, the total outstanding balance under the Amended Senior Note was $12.0 million and had an effective interest rate of 8.3%. The carrying value of the Amended Senior Note was $13.0 million at June 30, 2025, and is included in long-term debt, non-current, in the interim condensed consolidated balance sheet. For the three months ended June 30, 2025 and 2024, interest expense recognized on the Amended Senior Note was $0.3 million and $0.3 million, respectively. For the six months ended June 30, 2025 and 2024, interest expense recognized on the Amended Senior Note was $0.5 million and $0.6 million, respectively. At June 30, 2025 and December 31, 2024, there was $0.4 million and $0.4 million of accrued interest related to the Amended Senior Note, respectively, that is included within the accrued expenses and other current liabilities in the interim condensed consolidated balance sheets. The Company calculates and records interest expenses on the Amended Senior Note using the effective interest method. On July 3, 2025, the Company and Ginkgo entered into a waiver agreement to the Amended Senior Note, which deferred the June 30, 2025 interest payment date to July 31, 2025. On August 7, 2025, the Company and Ginkgo entered into a waiver agreement to the Amended Senior Note, which further deferred the June 30, 2025 interest payment date to the earlier of 1) the date that the claims purchase agreement between Ginkgo and Seneca terminates (see Note 12 - Subsequent Events for more information on the Seneca transaction) or 2) August 31, 2025. At June 30, 2025 and December 31, 2024, management has represented that the Company was in compliance with all applicable covenants under the Amended Senior Note. The following table summarizes the Company’s stated maturities and future scheduled principal repayments for the Amended Senior Note at June 30, 2025 (in thousands):
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