As part of the December 2023 Exchange Agreement, Acquisition LP and
Co-Invest LP consented to an amendment to the terms of the Indenture governing the 7.25% Convertible Notes to permit the issuance of the 11.00% / 13.00% Convertible Notes. Following the completion of the
transactions contemplated by the December 2023 Purchase Agreement and the December 2023 Exchange Agreement, the Reporting Persons no longer beneficially owned any 7.25% Convertible Notes.
Common Stock Warrant and Amended Warrant
On
June 14, 2021, the Company issued a Common Stock Warrant to Acquisition 2 LP as registered holder. On November 6, 2022, the Company and Acquisition 2 LP agreed to amend the Common Stock Warrant. This Amended Warrant is exercisable for
323,886 shares of Common Stock at an exercise price of $8.22 per share, at any time on or after May 9, 2023 and prior to May 9, 2028.
Second
Common Stock Warrant
On November 9, 2022, the Company issued the Second Common Stock Warrant to Acquisition LP and
Co-Invest LP in connection with the Interest Waiver Agreements. The Second Common Stock Warrant is exercisable for 500,249 shares of Common Stock, has an exercise price of $8.22 per share of Common Stock and
is exercisable at any time between May 9, 2023 and prior to its expiration on May 9, 2028.
September 2023
Pre-Funded Warrants
On September 18, 2023, pursuant to the terms of the September 2023 Exchange
Agreement, the Company issued (i) September 2023 Pre-Funded Warrants to purchase 1,787,209 shares of Common Stock to Acquisition 2 LP and (ii) September 2023
Pre-Funded Warrants to purchase 5,612,017 shares of Common Stock to Co-Invest LP. The September 2023 Pre-Funded Warrants have an
exercise price of $0.001 per share and are exercisable at any time on or after September 18, 2023 until such September 2023 Pre-Funded Warrants have been fully exercised in accordance with their terms.
Each of the September 2023 Pre-Funded Warrants are subject to certain exercise limitations, including a limitation on the ability to exercise if the holders beneficial ownership of Common Stock (together
with its affiliates and certain attribution parties) would exceed 49.9% of the outstanding Common Stock.
September 2023 Warrants
On September 18, 2023, pursuant to the terms of the September 2023 Exchange Agreement, the Company issued (i) September 2023 Warrants to purchase
4,017,899 shares of Common Stock to Acquisition 2 LP and (ii) September 2023 Warrants to purchase 12,616,608 shares of Common Stock to Co-Invest LP. The September 2023 Warrants have an exercise price of
$3.01 per share and are exercisable at any time on or after September 18, 2023 until September 18, 2026. Each of the September 2023 Warrants are subject to certain exercise limitations, including a limitation on the ability to exercise if
the holders beneficial ownership of Common Stock (together with its affiliates and certain attribution parties) would exceed 49.9% of the outstanding Common Stock.
11.00% / 13.00% Convertible Notes
On December 19,
2023, the Company issued a new series of 11.00% / 13.00% Convertible Notes. The 11.00% / 13.00% Convertible Notes were issued pursuant to, and are governed by, an indenture, dated as of December 19, 2023, by and between the Company and GLAS
Trust Company LLC, as trustee and collateral agent. The 11.00% / 13.00% Convertible Notes are the Companys senior secured obligations and are secured by substantially all of the Companys and its subsidiaries assets.
Interest on the 11.00% / 13.00% Convertible Notes is payable in cash, or at the Companys election subject to certain limitations, with a combination of
cash and shares of Common Stock (blended payments) or, with the agreement of the applicable holder, through payment-in-kind. The 11.00% / 13.00%
Convertible Notes will accrue interest at a rate of 11.00% per annum in the case of cash payment and 13.00% in the case of blended payments or payments-in-kind, payable
semi-annually in arrears on June 1 and December 1 of each year, with the initial payment on June 1, 2024. On December 19, 2023, the Company, Acquisition LP and Co-Invest LP agreed that
payments of interest on 11.00% / 13.00% Convertible Notes held by Acquisition LP and Co-Invest LP would be made as
payments-in-kind until Acquisition LP and Co-Invest LP provide five business days advance notice to the Company revoking this
election.
The 11.00% / 13.00% Convertible Notes will mature on the earlier of December 19, 2028 and the date that is 90 days prior to the maturity
of the 7.25% Convertible Notes solely to the extent there are 7.25% Convertible Notes outstanding in a principal amount equal to or greater than $5,000,000 as of such date, unless earlier repurchased, redeemed or converted.
At any time from the December 19, 2023 and before the close of business on the second scheduled trading day immediately before the maturity date,
noteholders may convert their 11.00% / 13.00% Convertible Notes at their option into shares of Common Stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is
641.02564 shares of Common Stock per $1,000 principal amount of 11.00% / 13.00% Convertible Notes, which represents an initial conversion price of approximately $1.56 per share of Common Stock. Noteholders that convert their Notes will be entitled
to an additional premium payment representing the amount of certain of the remaining interest payments on the 11.00% / 13.00% Convertible Notes as specified in the indenture, which the Company may settle in cash, shares of common stock, or a
combination, subject to the terms of the indenture. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. The 11.00% / 13.00% Convertible Notes are subject to certain limitations on
conversion, and limitations on the Companys ability to issue Common Stock to satisfy obligations under the 11.00% / 13.00% Convertible Notes, including a limitation on the ability of the holder to convert or the Company to issue Common Stock
if the holders beneficial ownership of Common Stock (together with its affiliates and certain attribution parties) would, in the case of Acquisition LP and Co-Invest LP, exceed 49.9% of the outstanding
Common Stock.