Debt | Note 5. Debt The following is a summary of short- and long-term debt: (in thousands) June 30, 2022 December 31, 2021 2020 MFS Loan $ 278 $ 314 Manufacturers Capital Promissory Notes 845 968 Related Party - Energize Convertible Debt — 7,600 2020 SVB Loan 8,558 10,225 2021 SVB Loan 20,868 20,800 Related Party - Drive Capital Convertible Debt — 3,000 Related Party - ECP Holdings Convertible Debt — 7,000 Total Outstanding Principal 30,549 49,907 Less: Discounts and deferred financing fees (1,829 ) (7,403 ) Total Outstanding Debt 28,720 42,504 Fair Value of Derivatives — 4,395 Total Debt and Derivative Liabilities $ 28,720 $ 46,899 The following is the summary of future principal repayments of debt: (in thousands) June 30, 2022 Remainder of 2022 $ 11,233 2023 15,160 2024 3,949 2025 207 Total $ 30,549 2021 SVB Loan On February 4, 2022, the 2021 Silicon Valley Bank (“SVB”) Loan was amended to extend the maturity date from the Closing Date to April 3, 2023 and required payment of $2.0 million of the $20.0 million outstanding principal balance upon consummation of the Business Combination. This amendment also added the original $0.8 million fee due at the Closing Date to the amended loan’s outstanding principal balance, deferring its repayment until maturity. In exchange for the extension of the loan, Fast Radius will pay an additional fee of $2.1 million due at maturity. The Company will make six interest-only payments beginning March 1, 2022 and will begin paying $2.4 million in principal beginning September 1, 2022. The interest rate on the term loan is the prime rate + 6.0%. Related Party Convertible Notes – Energize Ventures Fund On March 12, 2021, Legacy Fast Radius entered into a note purchase agreement with Energize Ventures Fund LP, Energize Growth Fund I LP, EV FR SPV and Ironspring Venture Fund I-FR, derivative had a fair value of $2.5 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the condensed consolidated balance sheet. For the six months ended June 30, 2022, the Company recognized a mark to market gain associated with the derivative of $47 thousand. The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes I and Related Party Derivative Liability with Energize Ventures: (in thousands) Three Months Ended Six Months Ended 2022 2021 2022 2021 Contractual interest expense $ — $ 97 $ 44 $ 97 Amortization of deferred financing costs and convertible debt discount — 283 184 283 Total Interest Expense $ — $ 380 $ 228 $ 380 Effective interest rate 0.0 % 58.3 % 58.3 % 58.3 % The following provides a summary of the convertible notes and derivatives: (in thousands) As of Unamortized deferred issuance costs, derivative, and warrants $ 3,534 Net carrying amount of convertible note 4,066 Principal value of convertible note $ 7,600 Fair value of convertible note and derivative liability $ 9,936 Fair value of convertible note excluding derivative liability $ 7,446 Fair value Level Level 3 For further information on fair value measurements, refer to Note 12. Related Party Convertible Notes – Drive Capital Fund On August 23, 2021, Legacy Fast Radius entered into a Note Purchase Agreement with Drive Capital Fund II LP and Drive Capital Ignition Fund II LP (existing stockholders of Legacy Fast Radius) for convertible promissory notes (collectively the “Related Party Convertible Notes II”). Legacy Fast Radius received funding of $3.0 million on August 24, 2021 at closing. The Notes had a stated interest rate of 6%, with all accrued interest and principal due at maturity, which was scheduled to be August 23, 2023. These Related Party Convertible Notes II contained a share settlement redemption feature that qualified as a derivative liability and required bifurcation. The derivative had a fair value of $0.6 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the six months ended June 30, 2022, the Company recognized a mark to market loss associated with the derivative of $5 thousand. The following provides a summary of interest expense on the Company’s Related Party Convertible Notes II and Related Party Derivative Liability with Drive Capital: (in thousands) Three Monhs Ended Six Months Ended Contractual interest expense $ — $ 17 Amortization of deferred financing costs and convertible debt discount — 24 Total Interest Expense $ — $ 41 Effective interest rate 0.0 % 17.1 % The following provides a summary of the convertible notes and derivatives: (in thousands) As of Unamortized deferred issuance costs, derivative, and warrants $ 474 Net carrying amount of convertible note 2,526 Principal value of convertible note $ 3,000 Fair value of convertible note and derivative liability $ 3,390 Fair value of convertible note excluding derivative liability $ 2,830 Fair value Level Level 3 Related Party Convertible Notes – Energy Capital Partners Holdings On October 26, 2021, Legacy Fast Radius entered into a Note Purchase Agreement with Energy Capital Partners Holdings, LP for convertible promissory notes (collectively the “Related Party Convertible Notes III”). Legacy Fast Radius received funding of $7.0 million on October 26, 2021 at closing. The Notes had a stated interest rate of 6%, with all accrued interest and principal due at maturity, which was scheduled to be October 26, 2023. These Related Party Convertible Notes III contained a share settlement redemption feature that qualified as a derivative liability and required bifurcation. The derivative had a value of $1.3 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the six months ended June 30, 2022, the Company recognized a mark to market loss associated with the derivative of $12 thousand. The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes III and Related Party Derivative Liability with Energy Capital Partners Holdings: (in thousands) Three Months Ended Six Months Ended Contractual interest expense $ — $ 40 Amortization of deferred financing costs and convertible debt discount — 52 Total Interest Expense $ — $ 92 Effective interest rate 0.0 % 16.3 % The following provides a summary of the convertible notes and derivatives: (in thousands) As of Unamortized deferred issuance costs, derivative, and warrants $ 1,130 Net carrying amount of convertible note 5,870 Principal value of convertible note $ 7,000 Fair value of convertible note and derivative liability $ 7,829 Fair value of convertible note excluding derivative liability $ 6,484 Fair value Level Level 3 Immediately prior to the completion of the Business Combination, the Related Party Convertible Notes I, II and III, along with unpaid and accrued interest, were converted into 990 thousand shares of common stock of Legacy Fast Radius (2.0 million shares of Common Stock post Business Combination). | NOTE 5 –DEBT The following is a summary of short- and long-term debt: December 31, 2021 December 31, 2020 2018 ATEL Loan $ — $ 359,594 2020 MFS Loan 314,637 384,604 Manufacturers Capital Promissory Notes 967,710 — Related Party - Energize Convertible Debt 7,600,000 — 2020 SVB Loan 10,225,000 — 2021 SVB Loan 20,800,000 — Related Party - Drive Capital Convertible Debt 3,000,000 — Related Party - ECP Holdings Convertible Debt 7,000,000 — Total Outstanding Principal $ 49,907,347 $ 744,198 Less: Discounts (6,816,026 ) — Less: Deferred financing fees (588,339 ) (15,879 ) Total Outstanding debt $ 42,502,982 $ 728,319 Fair value of derivatives 4,395,000 — Total Debt and derivative liabilities $ 46,897,982 $ 728,319 The following is the summary of future principal repayments of debt: Amounts 2022 $ 15,059,584 2023 30,690,676 2024 3,949,970 2025 207,117 Total $ 49,907,347 2018 ATEL Loan On October 4, 2018, the Company entered into a credit agreement with ATEL Ventures (“ATEL”) with a principal amount up to $3.0 million to finance equipment purchases (hereafter referred to as the “ATEL Loan”). All advances under the agreement are collateralized by the specific equipment financed in accordance with the agreement terms. On December 31, 2018, the Company financed the acquisition of advanced manufacturing equipment and machinery in the amount of $1.1 million. The loan required 36 monthly payments of principal and interest, with a maturity date of November 1, 2021. The loan did not have a stated interest rate; therefore, the Company calculated the imputed interest rate using the Yield-to-Maturity A-3 one-third one- 2018 SVB Loan On October 12, 2018, the Company entered into a term loan agreement with Silicon Valley Bank (“SVB”) for $3.0 million (hereafter referred to as the “2018 SVB loan”). The term loan required monthly payments of principal and interest, with all remaining principal and interest due on September 1, 2022. The term loan had an interest rate of prime rate + 1.25%. The loan was substantially collateralized by personal property and equity, as guaranteed by the Company. The term loan agreement did not contain financial covenants. In conjunction with the term loan, the Company issued warrants for the purchase of up to 46,636 shares of Common Stock at an exercise price of $0.45 per share. The warrants were recorded as a discount to the term note. Refer to Note 8 for information regarding redeemable warrants. On February 19, 2020, the Company extinguished the 2018 SVB loan by repaying the outstanding interest and principal balance. The Company also expensed the remainder of the deferred financing fees associated with the loan. 2020 MFS Loan On November 4, 2020, the Company entered into a secured loan agreement with Manufacturers Financing Services (“MFS”) for $0.4 million to finance the purchase of printing equipment. The loan required a 10% down payment at the time of origination, with 60 monthly payments of $7 thousand inclusive of principal and interest to be paid through December 1, 2025. The imputed interest rate for the periods ended December 31, 2021 and 2020 was approximately 3.4% and 4.1%, respectively. The loan agreement does not contain any financial covenants. The loan is substantially secured by the equipment serving as collateral. The outstanding balance of the loan was $315 thousand as of December 31, 2021. 2020 SVB Loan On December 29, 2020, the Company entered into a term loan credit agreement with SVB with a maximum credit extension of $6.5 million (“2020 SVB loan”). On March 12, 2021, the agreement was amended to increase the maximum credit extension to $10.0 million. The credit agreement defines two tranches of “availability” for advances. The first tranche must be drawn by May 31, 2021 and the second tranche must be drawn by September 30, 2021. The agreement requires monthly interest payments of 4.9% on the outstanding principal and monthly principal payments of $277.8 thousand beginning January 1, 2022. The term of the loan is the earlier to occur of the 36th month after the last tranche of funding and no later than December 1, 2024. The interest rate on the term loan is the greater of (a) the prime rate + 1.0%, or (b) 2.25%. In connection with acquiring the financing from the 2020 SVB loan, the Company issued warrants for the purchase of 26,115 shares of Common Stock at an exercise price of $1.81 per share. On March 12, 2021, the Company issued 26,115 additional warrants for the purchase of common shares at an exercise price of $13.49 per share. On May 25, 2021, the Company issued 26,115 additional warrants for the purchase of common shares at an exercise price of $13.49 per share. The warrants were determined to be liability classified and were recorded at their issuance date fair value as a discount to the loan. See Note 8 for further discussion on redeemable warrants. On May 25, 2021, the Company drew the full availability of the loan. The outstanding balance of the loan as of December 31, 2021 was $10.0 million. 2021 SVB Loan On September 10, 2021, the Company entered into a term loan credit agreement with SVB with a maximum credit extension of $20.0 million. The first $10.0 million of the loan can be drawn upon immediately, and the remaining $10.0 million can only be drawn upon to the amount of other additional financing that the Company receives. The company will make interest-only payments until the term loan’s maturity date, which is the earlier of a merger with a special purpose acquisition company (“SPAC”) or March 10, 2022. The interest rate on the term loan is the prime rate + 6.0%. On September 10, 2021, the Company drew the initial $10.0 million and an additional $3.0 million when the Drive Capital convertible debt was issued. The Company subsequently drew the remaining $7.0 million on October 26, 2021 when the ECP convertible debt was issued. As of November 8, 2021, the full $20 million has been drawn on the loan. On February 4, 2022, the 2021 SVB Loan was amended to extend the maturity date from March 10, 2022 to April 3, 2023. Refer to Note 15 for further information regarding the extension. Manufacturers Capital Promissory Notes On January 15, 2021, the Company entered into a note agreement with Manufacturers Capital to finance the purchase of machinery and equipment. The Company received proceeds of $299 thousand which required down payment of 10% at the time of origination. The agreement calls for 48 monthly payments of $5 thousand, inclusive of principal and interest to be paid through January 15, 2025. The imputed interest rate for the year ended December 31, 2021 was 2.8%. The loan agreement does not contain any financial covenants and is substantially secured by the equipment serving as collateral. The outstanding balance of the loan was $168 thousand as of December 31, 2021. On March 24, 2021, the Company entered into a note agreement with Manufacturers Capital to finance the purchase of equipment. The Company received proceeds of $680 thousand which required down payment of 10% at the time of origination. The agreement calls for 48 monthly payments of $11.7 thousand, inclusive of principal and interest to be paid through March 24, 2025. The imputed interest rate for the year ended December 31, 2021 was 3.0%. The loan agreement does not contain any financial covenants and is substantially secured by the equipment serving as collateral. The outstanding balance of the loan was $389 thousand as of December 31, 2021. On July 13, 2021, the Company entered into a note agreement with Manufacturers Capital to finance the purchase of equipment. The Company received proceeds of $253 thousand which required down payment of 10% at the time of origination. The agreement calls for 48 monthly payments of $5.7 thousand, inclusive of principal and interest to be paid through July 13, 2025. The imputed interest rate for the year ended December 31, 2021 was 2.4%. The loan agreement does not contain any financial covenants and is substantially secured by the equipment serving as collateral. The outstanding balance of the loan was $203 thousand as of December 31, 2021. On August 16, 2021, the Company entered into a note agreement with Manufacturers Capital to finance the purchase of equipment. The Company received proceeds of $253 thousand which required down payment of 10% at the time of origination. The agreement calls for 48 monthly payments of $5.7 thousand, inclusive of principal and interest to be paid through August 16, 2025. The imputed interest rate for the year ended December 31, 2021 was 2.0%. The loan agreement does not contain any financial covenants and is substantially secured by the equipment serving as collateral. The outstanding balance of the loan was $207 thousand as of December 31, 2021. Related Party Convertible Notes – Energize Ventures Fund On March 12, 2021, the Company entered into a note purchase agreement with Energize Ventures Fund LP, Energize Growth Fund I LP, EV FR SPV and Ironspring Venture Fund I-FR, The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes I and Related Party Derivative Liability with Energize Ventures: Year ended December 31, (in thousands) 2021 Contractual interest expense $ 327 Amortization of deferred financing costs and convertible debt discount 1,102 Total Interest Expense $ 1,429 Effective interest rate 58.3 % The following provides a summary of the convertible notes and derivatives: As of (in thousands) December 31, 2021 Unamortized deferred issuance costs, derivative, and warrants $ 3,534 Net carrying amount of convertible note 4,066 Principal value of convertible note $ 7,600 Fair value of convertible note and derivative liability 9,936 Fair value of convertible note excluding the derivative liability $ 7,446 Fair value level Level 3 For further information on fair value measurements, refer to Note 10. Related Party Convertible Notes – Drive Capital Fund On August 23, 2021, the Company entered into a Note Purchase Agreement with Drive Capital Fund II LP and Drive Capital Ignition Fund II LP (existing stockholders) for convertible promissory notes (collectively the “Related Party Convertible Notes II”). The Company received funding of $3.0 million on August 24, 2021 at closing. The Notes have a stated interest rate of 6%, with all accrued interest and principal due at maturity, which is August 23, 2023. These Related Party Convertible Notes II contain a share settlement redemption feature that qualifies as a derivative liability and requires bifurcation. The derivative had a fair value of $0.6 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the year ended December 31, 2021, the Company recognized a mark to market loss associated with the derivative of $11 thousand. The following provides a summary of interest expense on the Company’s Related Party Convertible Notes II and Related Party Derivative Liability with Drive Capital: Year ended December 31, (in thousands) 2021 Contractual interest expense $ 63 Amortization of deferred financing costs and convertible debt discount 86 Total Interest Expense $ 149 Effective interest rate 17.1 % The following provides a summary of the convertible notes and derivatives: As of (in thousands) December 31, 2021 Unamortized deferred issuance costs, derivative, and warrants $ 474 Net carrying amount of convertible note 2,526 Principal value of convertible note $ 3,000 Fair value of convertible note and derivative liability 3,390 Fair value of convertible note excluding the derivative liability $ 2,830 Fair value level Level 3 Related Party Convertible Notes – Energy Capital Partners Holdings On October 26, 2021, the Company entered into a Note Purchase Agreement with Energy Capital Partners Holdings, LP for convertible promissory notes (collectively the “Related Party Convertible Notes III”). The Company received funding of $7.0 million on October 26, 2021 at closing. The Notes have a stated interest rate of 6%, with all accrued interest and principal due at maturity, which is October 26, 2023. These Related Party Convertible Notes III contain a share settlement redemption feature that qualifies as a derivative liability and requires bifurcation. The derivative had a value of $1.3 million as of December 31, 2021 and was recorded in Related party convertible notes and derivative liability on the consolidated balance sheet. For the year ended December 31, 2021, the Company recognized a mark to market loss associated with the derivative of $122 thousand. The following provides a summary of the interest expense of the Company’s Related Party Convertible Notes III and Related Party Derivative Liability with Energy Capital Partners Holdings: Year ended December 31, (in thousands) 2021 Contractual interest expense $ 76 Amortization of deferred financing costs and convertible debt discount 95 Total Interest Expense $ 171 Effective interest rate 16.3 % The following provides a summary of the convertible notes and derivatives: (in thousands) As of December 31, 2021 Unamortized deferred issuance costs, derivative, and warrants $ 1,130 Net carrying amount of convertible note 5,870 Principal value of convertible note $ 7,000 Fair value of convertible note and derivative liability 7,829 Fair value of convertible note excluding the derivative liability $ 6,484 Fair value level Level 3 The Related Party Convertible Notes I, II, and III are convertible |