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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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11. DEBT The following table summarizes loans payable, net (in thousands):
We have a Credit Agreement with MidCap entered on September 27, 2019 (Closing Date) and amended on March 29, 2021 (First Amendment), February 11, 2022 (Second Amendment), July 27, 2022 (Third Amendment), and April 11, 2024 (Fourth Amendment). The Credit Agreement provides for a $60.0 million term loan credit facility, which was fully funded as of December 31, 2024 and 2023. In April 2024, we entered into Fourth Amendment to the Credit Agreement, which among other things, extended the maturity date and interest only period for the term loans, revised the interest rate, reset the prepayment fee, increased the exit fee, and updated certain financial covenants. Under the amended Credit Agreement, the term loans mature on September 1, 2027, and the interest-only period is through October 1, 2025. The interest rate applicable to the term loans under is the sum of one-month SOFR, plus an adjustment of 0.11448%, subject to 4.00% applicable floor, plus applicable margin of 6.50%. A final payment fee of 4.25% of principal is due at maturity date of the term loans. The amendment was accounted for as debt modification. The unamortized debt issuance costs are continuously being amortized as interest expense through maturity using the effective interest rate method. Prior to the Fourth Amendment to the Credit Agreement, the term loans would mature on September 1, 2026, and the interest-only period was through October 1, 2024. The term loans bore interest rate equal to the sum of one-month SOFR, plus an adjustment of 0.11448%, subject to 1.50% applicable floor, plus applicable margin of 5.65%, and a final payment fee of 2.50% of principal due at maturity date. We may make voluntary prepayments, in whole or in part, subject to certain prepayment premiums and additional interest payments. The Credit Agreement also contains certain provisions, such as event of default and change in control provisions, which, if triggered, would require us to make mandatory prepayments on the term loan, which are subject to certain prepayment premiums and additional interest payments. The obligations under the amended Credit Agreement are secured by a perfected security interest in all of our assets including our intellectual property. Interest expense, including amortization of the debt discount and accretion of the final fees related to the Credit Agreement for the years ended December 31, 2024, 2023 and 2022 were $7.9 million, $6.8 million and $3.0 million, respectively. Accrued interest of $2.1 million and $1.5 million as of December 31, 2024 and 2023, respectively, was included within other accrued liabilities in the balance sheet. The following table presents the future minimum principal payments of the outstanding loan as of December 31, 2024 (in thousands):
The amended Credit Agreement contains certain covenants which, among others, require us to deliver financial reports at designated times of the year and maintain minimum unrestricted cash and trailing net revenues. As of December 31, 2024, we were not in violation of any covenants. |
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