Company: BL
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001666134-25-000003
Chunk: 152

Company: BLACKLINE, INC.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 152
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 Notes issuance. Significant inputs used in the model to determine the applicable interest rate include implied volatility over the term of the 2026 Notes. The equity component representing the conversion option was determined by deducting the fair value of the liability component from the principal amount of the 2026 Notes. The difference between the principal amount of the 2026 Notes and the equity component totaling $276.3 million was recorded as a debt discount. In addition, the Company incurred $21.2 million of transaction costs related to the 2026 Notes, of which $16.1 million and $5.1 million, respectively, was allocated to the liability and equity components of the 2026 Notes. Transaction costs allocated to the equity component were recorded as additional debt discount. The equity component of the 2026 Notes was not remeasured as it continued to meet the conditions for equity classification. The debt discount was amortized to interest expense over the term of the 2026 Notes using the effective interest method. Additionally, the Company recorded, through equity, a deferred tax liability of $2.4 million, net of the related change in the valuation allowance, related to the debt issuance costs on the 2026 Notes.In connection with the adoption of ASU 2020-06 on January 1, 2022, the Company reclassified the remaining balance of the conversion feature of $271.2 million from additional paid-in capital to convertible debt for $233.4 million and retained earnings for $37.8 million. Accordingly, the Company no longer carries an equity component of the Notes, and no longer incurs non-cash interest expense related to the accretion of the debt discount associated with the embedded conversion option.In connection with the issuance of the 2029 Notes, the Company used approximately $662.6 million of the net proceeds from the offering of the 2029 Notes, as well as liquid investments on hand of $185.9 million to repurchase $919.8 million aggregate principal amount of the 2026 Notes. The difference between the consideration paid and the carrying value of the repurchased 2026 Notes, inclusive of any unamortized debt issuance costs, was recognized as a gain on extinguishment of $65.1 million in other income in the consolidated statement of operations for the year ended December 31, 2024.

87

The 2026 Notes consisted of the following (in thousands):December 3120242023