Subsequent Events |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events July 2024 PPA - Second Supplemental Agreement
On October 11, 2024 (the “October Supplemental Date”), the Company entered into a Supplemental Agreement (the “Second Supplemental Agreement”) with Yorkville to the July 2024 PPA. Pursuant to the Second Supplemental Agreement, Yorkville agreed to advance $2.7 million to the Company (the “Second Supplemental Advance”).
After giving effect to the commitment fee and the purchase price discount provided for in the July 2024 PPA, net proceeds of the Second Supplemental Advance to the Company were $2.5 million. The Second Supplemental Advance will be offset upon the issuances of shares of Common Stock at a Purchase Price equal to the lower of (i) $1.11 per share and (ii) the YA Variable Price; provided that in no event shall the Purchase Price be less than the July PPA Floor Price.
In connection with the Second Supplemental Advance, on the October Supplemental Date, the Company issued to Yorkville a warrant to purchase 1.2 million shares of Common Stock each at an exercise price of $1.11 per share, exercisable beginning on April 11, 2025 and with an expiration date of October 11, 2029 (the “October YA Warrant”). The October YA Warrant includes customary adjustment provisions for stock splits, combinations and similar events.
Second ATM Consent Agreement
Pursuant to the terms of each of the Current Yorkville PPAs, the Company may enter into an “at the market offering” or other continuous offering or similar offering of Common Stock with a registered broker-dealer, whereby the Company may sell Common Stock at a future determined price; provided, however, that the Company shall not be permitted to execute transactions under such agreement unless (i) an Amortization Event (as defined in the Current Yorkville PPAs) has occurred and is continuing, or (ii) there is no balance outstanding under all prior Prepaid Advances (as defined in the Current Yorkville PPAs).
On the October Supplemental Date, the Company and Yorkville entered into a second Omnibus Consent to Pre-Paid Advance Agreements (the “Second ATM Consent Agreement”) pursuant to which solely with respect to the period beginning on the October Supplemental Date and ending at the close of business on November 22, 2024 (such time period, the “Applicable ATM Time Period”), the Company will be allowed to utilize the Current ATM Offering at its discretion; provided that, other than the proceeds from the remaining Initial ATM Sales, the Company and Yorkville will, subject to the redemption premium set forth in the Current Yorkville PPAs, evenly split 50%/50% any gross proceeds receivable by the Company from sales of Common Stock pursuant to the Current ATM Offering during the Applicable ATM Time Period; provided further that any further sales under the Current ATM Offering subsequent to the Applicable ATM Time Period will require Yorkville’s prior written consent.
Additional Borrowings
On October 18, 2024, the Company issued an Unsecured Grid Promissory Note (the “Note”) to AFV Management Advisors, LLC (“AFVMA”), an entity affiliated with Mr. Aquila, the Company’s CEO, in the initial principal amount of $0.8 million. The Note provides that the Company may, from time to time request additional advances from AFVMA in such greater amount as shall be mutually agreed, which will be added to the Note. On October 21, 2024, the Company requested, and AFVMA agreed to fund, a second advance in an amount equal to $0.3 million under the Note, which was received on October 21, 2024.
On October 30, 2024 and November 1, 2024, the Company requested, and AFVMA agreed to fund, additional advances of $2.0 million and $0.7 million, respectively, under the Note. As of November 5, 2024, the aggregate principal amount outstanding under the Note was $3.8 million. Interest shall accrue on the unpaid portion of the principal amount at a fixed rate of 11% per annum, payable monthly.
On November 5, 2024, the Company entered into a Revolving Credit Facility Agreement and related Security Agreement with AFVMA (the “Secured WC Facility”), under which AFVMA may provide working capital advances to the Company of up to $12.0 million for a period of up to 12 months, which advances are secured by a first priority lien and security interest on the Company’s subsidiary’s equipment located at the Company’s Oklahoma City facility, and by a pledge of certain cash proceeds from the future release of cash collateral securing the Company’s obligations under a letter of credit issued to a third party. On the same day, the Company borrowed an initial amount of $3.9 million under the Secured WC Facility, and used the proceeds to repay all principal and interest due under the Note, and subsequently borrowed an additional $3.0 million under the Secured WC Facility through the date of this filing. Any additional advances beyond what has already been borrowed are subject to AFV’s discretion. There can be no assurance that any further advances under the Secured Credit Facility will be available to the Company.
The Secured WC Facility contains customary covenants and conditions, including a restriction on the Company or its subsidiaries pledging their assets to another party, and customary events of default. Advances under the Secured WC Facility bear interest at the One-Month Secured Overnight Financing Rate (SOFR) plus 6.00%, with interest paid monthly, and principal to be repaid within 120 days of being drawn. The Company may prepay amounts due under the Secured Credit Facility Note in whole or in part at any time without premium or penalty.
Workforce Reduction On October 31, 2024, the Company announced it will temporarily reduce its workforce in Oklahoma City by furloughing 23% of its factory workers for a period of twelve weeks as part of a broader realignment of its North American operations. This reduction is a continuation of the Company’s efforts to consolidate its U.S. workforce as it prepares for the next phase of growth.
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