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Borrowing | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
Borrowing | BORROWING Long-term borrowing was as follows:
| December 31, |  |
(in thousands) | 2024 |  | 2023 |  | Interest rate
Principal |  |  |  |  |
Term A Loan | $ | 27,500 |  |  | $ | 27,500 |  |  | 7.95% + 0.022% + SOFR (subject to a floor of 1.0%)
Term B Loan | 22,500 |  |  | 22,500 |  |  | 7.95% + 0.022% + SOFR (subject to a floor of 1.0%)
Term C Loan | 50,000 |  |  | — |  |  | 4.25% + 0.022% + SOFR (subject to a floor of 4.7%)
Term D Loan | 50,000 |  |  | — |  |  | 4.00% + 0.022% + SOFR (subject to a floor of 4.7%)
Total principal | $ | 150,000 |  |  | $ | 50,000 |  |  |
Adjustments to principal value |  |  |  |  |
Unamortized discount and debt issuance costs | (1,136) |  |  | (912) |  |  |
Accreted value of final fee | 1,989 |  |  | 734 |  |  |
Total long-term debt | 150,853 |  |  | 49,822 |  |  |
Less: Current portion of long-term debt | — |  |  | — |  |  |
Long-term debt, net of current portion | $ | 150,853 |  |  | $ | 49,822 |  |  |
On February 23, 2022 (Closing Date), we entered into a loan and security agreement with SLR (2022 Loan Agreement) as collateral agent (Agent) and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders), which was subsequently amended in August 2022 (the First Amendment) and February 2023 (the Second Amendment). The 2022 Loan Agreement, as amended, provided for a senior secured loan facility (the Term A Loan) funded on the Closing Date and Term B Loan borrowable on or prior to December 20, 2023; provided that (i) we received approval by the U.S. FDA for our NDA for XPHOZAH by November 30, 2023, and (ii) we achieved certain product revenue milestone targets described in the 2022 Loan Agreement. We met the requirements to borrow Term B Loan and subsequently drew it in October 2023. In October 2023, we entered into a Third Amendment (the Third Amendment) with the 2022 Lenders. The Third Amendment provided us with the option to draw the Term C Loan by March 15, 2024, contingent upon having drawn the Term B Loan; and provided us with the option to draw the Term D Loan of uncommitted capital by December 31, 2026, subject to approval by the Agent’s investment committee. We provided the Agent with notice of our decision to draw the Term C Loan in February 2024 and received the proceeds in March 2024. In October 2024, we entered into a Fourth Amendment (the Fourth Amendment) with the 2022 Lenders. The Fourth Amendment, among other things, provided for the immediate draw of the Term D Loan on the closing date of the Fourth Amendment and provides us with the option to draw an additional $50.0 million of committed capital by June 30, 2025 (the Term E Loan and together with the Term A, B, C and D Loans, the Five Loans). The interest rate for the Term E Loan will be 4.00% plus a SOFR value equal to 0.022% plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website, subject to a SOFR floor of 4.7%. We drew the Term D Loan in October 2024. Under the Fourth Amendment, the maturity date for the Five Loans was extended to July 1, 2028 (the Maturity Date) and the period under which we are permitted to make interest-only payments on the Five Loans was extended to the Maturity Date. We paid fees of $0.2 million, $0.1 million, $0.3 million and $0.3 million on each funding date of the Term A, Term B, Term C and Term D Loans, respectively. In addition, we will be obligated to pay 0.5% of the aggregate original principal amount of the Term E Loan commitment, which shall be due on the earliest of (1) the funding of the Term E Loan, (2) June 30, 2025, or (3) the prepayment, refinancing, substitution or replacement of any of the Five Loans on or prior to the date immediately preceding June 30, 2025. We are obligated to pay a final fee equal to 4.95% of the aggregate original principal amount of the Five Loans, to the extent such loans are funded, upon the earliest to occur of the maturity date, the acceleration of the Five Loans, and the prepayment, refinancing, substitution, or replacement of the Five Loans. The total unaccreted final fee was $5.4 million and $1.7 million at December 31, 2024 and December 31, 2023, respectively. We may voluntarily prepay all amounts outstanding under the Five Loans, subject to a prepayment premium of 2% of the outstanding principal amount of the Five Loans if prepaid through and including October 17, 2025 or 1% of the outstanding principal amount of the Five Loans if prepaid after October 17, 2025 and prior to the maturity date. The Five Loans are secured by substantially all of our assets, except for our intellectual property and certain other customary exclusions. Additionally, as discussed in Note 10. Derivative Liabilities, in connection with the Term A and Term B Loans (Original Loans), we paid an exit fee in the amount of $1.0 million in October 2024. The 2022 Loan Agreement, as amended, contains customary representations and warranties that place restrictions on disposition of assets, granting liens, occurring additional debt and other matters, as well as customary events of default. We have agreed to not allow our cash, cash equivalents and available-for-sale investments to be less than the eighty percent (80%) of the outstanding balance of the Five Loans for any period in which our net revenue from the sale of any products, calculated on a trailing six (6) month basis and tested monthly, is less than sixty percent (60%) of the outstanding balance of the Five Loans. We have concluded that the provisions that could cause acceleration of the principal repayment are remote as of December 31, 2024. As of December 31, 2024, our total future payment obligation related to the outstanding balance of the Five Loans, excluding interest payments, was $157.4 million, which is due on July 1, 2028.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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