|9 Months Ended|
Sep. 30, 2020
|Subsequent Events [Abstract]|
|Subsequent Events||SUBSEQUENT EVENTS
The Company evaluates events and transactions occurring subsequent to the date of the condensed consolidated financial statements for matters requiring recognition or disclosure in the condensed consolidated financial statements. The accompanying condensed consolidated financial statements consider events through the date on which the condensed consolidated financial statements were available to be issued.
4.0% Senior Secured Convertible Notes Due 2024
On October 14, 2020 the Company issued $200 million par value convertible notes (the “Convertible Note III” or “Note III”) due October 14, 2024. Note III is a senior secured obligation of the Company, and ranks senior to all unsecured debt of the Company. Interest is payable quarterly beginning January 15, 2021 at a rate of 4.0% per annum. The interest rate on the Note III may be reduced to 2.75% if the Company meets certain conditions. The Convertible Note III is convertible at a rate of $35.29, subject to change for anti-dilution adjustments and adjustments for certain corporate events. Note III will generally not be redeemable at the option of the Company prior to the third anniversary of their issue date.
The Convertible Note III is guaranteed by all the Company’s current and future subsidiaries and are secured by substantially all the assets of the Company and its subsidiaries. The Company is required to hold the proceeds of the Convertible Note III in escrow until it completes certain requirements related to the collateral. Note III includes certain covenants, including limitations on liens, additional indebtedness, investments, and dividends and other restricted payments, and customary events of default. In connection with Note III, the Company entered into a security agreement, including customary covenants and agreements governing the collateral.
The Company paid commissions in connection with the Convertible Note III, reducing the proceeds to the Company to approximately $194.5 million. The Company expects to use the net proceeds from this offering to increase and accelerate production volume, advance new products to market, and support current working capital and other general corporate purposes.
Impact of COVID-19 Pandemic
The Company has recently experienced an outbreak of COVID-19 cases amongst our employees. As of the date of this filing, approximately 36% of our production employees have tested positive for COVID-19 or are currently awaiting test results. Additionally, several of our suppliers have experienced capacity constraints due to the pandemic, which has limited their shipment volumes. As a result, we expect a significant reduction to our planned production volume in the fourth quarter of 2020.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef