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Debt | 9 Months Ended
--- | ---
Sep. 30, 2020
Debt Disclosure [Abstract] |
Debt | Debt The Company's debt consists of the following:
(in thousands) |  | September 30, 2020 |  | December 31, 2019
Senior Secured Term Loan due 2026: |  |  |  |
Principal |  | $ | 400,000 |  |  | $ | — |
Less: debt discount (1) |  | (7,794) |  |  | — |
Less: deferred financing (1) |  | (5,863) |  |  | — |
Net carrying value of the Senior Secured Term Loan |  | $ | 386,343 |  |  | $ | — |
Senior Secured Term Loan due 2023 (2): |  |  |  |
Principal |  | $ | — |  |  | $ | 150,000 |
Less: debt discount (1) |  | — |  |  | (2,315) |
Less: deferred financing (1) |  | — |  |  | (311) |
Net carrying value of the Senior Secured Term Loan |  | $ | — |  |  | $ | 147,374 |
Convertible Notes due 2023 (3): |  |  |  |
Principal |  | $ | 2,825 |  |  | $ | 2,825 |
Less: debt discount (1) |  | (555) |  |  | (659) |
Less: deferred financing (1) |  | (29) |  |  | (35) |
Net carrying value of the Convertible Notes |  | $ | 2,241 |  |  | $ | 2,131 |
Net carrying value of Long-term debt |  | $ | 388,584 |  |  | $ | 149,505 |
______________________________ (1) Included in the Consolidated Balance Sheets within Long-term debt and amortized to interest expense over the remaining life of the Convertible Notes and Senior Secured Term Loans using the effective interest rate method. (2) The principle, accrued interest and early settlement premiums associated with the Senior Secured Term Loan due 2023 were fully paid and settled in July 2020. (3) The Convertible Notes are currently convertible as the last reported sale price of the Company's common stock was equal to or more than 130% of the conversion price for at least 20 trading days of the 30 consecutive trading days ending on the last day of the quarter. Senior Secured Term Loans In July 2020, the Company entered into a definitive agreement for a $400 million credit facility with Hayfin Capital Management (“Senior Secured Term Loan due 2026”) with an interest rate equal to 3-month LIBOR, subject to a 1% floor, plus 6.5% per annum and requires interest-only payments until mid-2024.The Senior Secured Term Loan due 2026 will be repaid in nine quarterly payments of $44.4 million, starting on July 2024 with the final balance due on the maturity date in July 2026. This transaction resulted in net proceeds of $385.9 million, after deducting fees and estimated expenses. There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2026. Additionally, the Company used $156.3 million of the proceeds to voluntarily settle the principal amount, $1.1 million accrued interest, and $5.2 million in early settlement premiums of the Senior Secured Term Loan with BioPharma Credit PLC that was due in 2023 ("Senior Secured Term Loan due 2023"). The remaining proceeds has been or will be used for other general corporate and product development purposes. As a result of this early extinguishment, the Company recognized a loss on extinguishment of debt of $7.3 million in the Consolidated Statements of Operations. The Senior Secured Term Loan due 2026 is subject to mandatory prepayment provisions that require prepayment upon a change of control, the incurrence of certain additional indebtedness, asset sale, or an event of loss, subject to certain conditions set forth in the Senior Secured Term Loan due 2026. The Company may prepay the Senior Secured Term Loan due 2026 in whole, at its option at any time. Any prepayment of the Senior Secured Term Loan due 2026 is subject to certain make-whole premiums and prepayment premiums, the latter of which decrease until the fourth anniversary of the transaction date at which point no prepayment penalty shall exist. The obligations under the Senior Secured Term Loan due 2026 are secured by a first lien security interest in certain assets of the Company. The Senior Secured Term Loan due 2026 contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company. The Senior Secured Term Loan due 2026 also contains a minimum liquidity covenant of $75 million, and an incremental minimum consolidated revenue covenant, measured as of the previous four consecutive fiscal quarters. The minimum consolidated revenue covenant ranges from $140 million, beginning March 31, 2021, and peaks at $225 million by June 30, 2023, continuing at that level until the Senior Secured Term Loan due 2026 is repaid. If an event of default occurs and is continuing, Hayfin Capital Management may declare all amounts outstanding under the Senior Secured Term Loan due 2026 to be immediately due and payable. Convertible Notes During the first and second quarter of 2019, the Company entered into separate, privately negotiated Exchange Agreements with a limited number of holders ("the Holders") of the unsecured Convertible Senior Notes due in 2023 ("the Convertible Notes"). Under the terms of the Exchange Agreements, the Holders agreed to exchange an aggregate principal amount of $247.2 million of Convertible Notes held by them in exchange for an aggregate of approximately 44.0 million shares of Company common stock, par value $0.01 per share. In addition, pursuant to the Exchange Agreements, the Company made aggregate cash payments of $1.3 million to the Holders to satisfy accrued and unpaid interest to the closing date of the transactions, along with cash in lieu of fractional shares. These transactions resulted in $215.0 million in additional paid-in-capital and common stock of $0.4 million on the Consolidated Balance Sheets as of September 30, 2019. Additionally, the Company recognized a loss on the exchange of debt of $40.6 million on the Consolidated Statements of Operations during the nine months ended September 30, 2019. During the three months ended September 30, 2019, there were no additional debt conversion transactions. During the first and second quarter of 2019, the Company terminated the Capped Call Confirmations related to the exchange of the Convertible Notes for proceeds of $19.9 million. Interest Expense The following table sets forth interest expense recognized related to the Company's debt for the three and nine months ended September 30, 2020 and 2019, respectively:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in thousands) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Contractual interest expense |  | $ | 6,250 |  |  | $ | 3,820 |  |  | $ | 13,245 |  |  | $ | 12,779 |
Amortization of debt discount |  | $ | 395 |  |  | $ | 182 |  |  | $ | 869 |  |  | $ | 2,164 |
Amortization of deferred financing |  | $ | 197 |  |  | $ | 23 |  |  | $ | 255 |  |  | $ | 145 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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