v3.26.1
Debt
 9 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
The Company's debt consists of the following (in thousands, except stated interest rate):
NoteStated Interest RatePrincipal Balance
Debt Premium
June 30,
2026
2029 Convertible Notes7.5%$177,506 $47,447 $224,953 
Note payable - related party
4.2%145,000 145,000 
Long-term borrowings - current portion
2.25%342 — 342 
2029 Convertible Notes
On December 29, 2023, the Company entered into a privately negotiated exchange agreement with certain affiliates and related funds of Mudrick Capital Management, L.P., which were holders of its existing 2026 Convertible Notes, to exchange $205.8 million principal amount of the 2026 Convertible Notes for $177.5 million in aggregate principal amount of the Company’s new convertible senior secured notes due 2029 (the “2029 Convertible Notes”) (the "Exchange"). The Exchange closed on January 2, 2024, when the 2029 Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of January 2, 2024, among the Company, the guarantors identified therein and U.S. Bank Trust Company, National Association, as trustee and collateral agent.
At our election for any interest period, the 2029 Convertible Notes will bear interest at a rate of (i) 7.5% per annum on the principal amount thereof if interest is paid in cash and (ii) 10.0% per annum on the principal amount thereof if interest is paid in kind, in each case payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024. The 2029 Convertible Notes will mature on February 15, 2029, unless earlier converted or repurchased.
The initial conversion rate of the 2029 Convertible Notes is 21.7206 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of approximately $46.04 per share of common stock. Holders may convert their 2029 Convertible Notes at their option in the following circumstances:
(i)during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price per share of common stock is greater than or equal to 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
(ii)during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of 2029 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day;
(iii)upon the occurrence of certain corporate events or distributions on the Company’s common stock, as provided in the Indenture; and
(iv)on or after November 15, 2028 until the close of business on the second scheduled trading day immediately before the Maturity Date.
The Company may cause all outstanding 2029 Convertible Notes to be automatically converted, subject to certain conditions, if, at any time on or after January 2, 2025, the last reported sale price of the Company’s common stock has been at least 200% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period, the last of which 20 trading days is no more than 10 trading days before the date that the Company provides the notice of forced conversion. Upon conversion, the Company can elect to deliver cash or shares or a combination of cash or shares.
Upon the occurrence of a fundamental change (as defined in the Indenture), holders of the 2029 Convertible Notes may require the Company to repurchase their 2029 Convertible Notes at a cash repurchase price equal to the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of fundamental change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.
As previously disclosed, the closing of the Business Combination constituted a fundamental change under the indenture governing our 2029 Convertible Notes, triggering our delivery of a notice to holders of 2029 Convertible Notes regarding their fundamental change repurchase right (the “2029 Notes Tender Offer”). The Tender Offer expired on January 6, 2026 at 5:00 p.m. New York City time (the “2029 Notes Expiration Time”). As of the 2029 Notes Expiration Time, none of the outstanding 2029 Convertible Notes were surrendered for repurchase pursuant to the 2029 Notes Tender Offer. As of June 30, 2026, the aggregate principal amount of 2029 Convertible Notes outstanding is approximately $177.5 million, which will mature on February 15, 2029, unless earlier repurchased or converted.
During the nine months ended June 30, 2026, the Company paid approximately $6.7 million of interest expense in connection with the 2029 Convertible Notes. No interest expense was paid during the three months ended June 30, 2026.
During the three and nine months ended June 30, 2026, the Company recorded amortization income of $4.7 million and $12.4 million, respectively, included in amortization of debt premium, net in the condensed consolidated statements of operations and comprehensive loss.
The fair value (Level 2) of the 2029 Convertible Notes was $175.1 million as of June 30, 2026.
Note payable - related party
On January 5, 2026, the Company issued the Disney Note to Disney Enterprises, Inc. (the “Lender”), an affiliate of Disney, pursuant to which the Company borrowed an aggregate principal amount of $145.0 million. The Disney Note was issued pursuant to a commitment letter, dated January 6, 2025, executed concurrently with the Business Combination Agreement, pursuant to which the Lender committed to provide the Company, on January 5, 2026 and on the terms and subject to the conditions set forth therein, up to $145.0 million of indebtedness in the form of a senior unsecured term facility.
The Disney Note bears interest at a rate equal to 4.2% per annum. The Disney Note is unsecured and matures on January 5, 2031 unless earlier repaid, subject to springing maturity in the event the Company incurs certain unsecured indebtedness with a scheduled maturity prior to January 5, 2031. The Company may prepay any portion of the outstanding principal at any time without penalty.
The Disney Note includes customary covenants and sets forth certain events of default after which the outstanding principal may be declared immediately due and payable, including certain types of bankruptcy or insolvency events of default involving the Company and certain of its subsidiaries.
During the three and nine months ended June 30, 2026, the Company paid $1.5 million and $2.7 million, respectively, in interest expense related to the Disney Note.
As discussed in Note 3, the proceeds from the Disney Note were used to repay $144.8 million of outstanding principal and approximately $2.0 million of interest expense on the 2026 Convertible Notes.