Part 4: Chapter 16 - Long Term Debt

a/d) New debt was issued during the year. Poshmark issued $50 million in convertible notes to mature by September 14th, 2023. The notes do not accrue interest except at the condition of a default if there is no payment at the date of maturity. If there is a default, the outstanding principal rate will earn interest of up to 20%. The convertible notes will convert to shares of stock in the company at a discount. The discount depends on the time that the notes are converted. The discounts are as follows: - Prior to the first anniversary of September 15, 2020 (the “Issuance Date”), 85% - After the first anniversary but prior to the second anniversary of the Issuance Date, 80% - On or after the second anniversary of the Issuance Date, 75% The notes can be redeemed by the company prior to 2023, however, if they are left until maturity, the company must pay an exit fee of 33.3% of the outstanding principle. b) No debt was extinguished during the year. c) The debt strucutre is comprised of unsecured convertible notes. Under the terms of the convertible notes, the Company is subject to certain covenants that restrict its ability to incur indebtedness or liens.