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Note 10 - Long-term Debt
 9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 10 – Long-Term Debt

 

On  March 7, 2022, the Company entered into a loan agreement with Pharmakon for a senior secured term loan of up to $100 million in two tranches. The first tranche of $75 million was funded in  March 2022. At its option, the Company  may draw up to an additional $25 million before  December 31, 2022, subject to customary bring down conditions and deliverables. The facility will mature five years from initial funding and can be prepaid in whole at the Company's discretion, at any time, subject to prepayment premiums and make-whole amounts. The loan will require interest-only payments for the first 48 months followed by principal and interest payments with interest accruing using 3-month London Inter-Bank Offered Rate (“LIBOR”) (with a 1.25% floor) plus 8.25%. In the event of the cessation of LIBOR, the benchmark governing the interest rate will be replaced with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York. The Company is not required to maintain any financial covenants.

 

The Company incurred financing expenses of $4.2 million which are recognized as a direct offset to the long-term debt on the Company's condensed consolidated balance sheet. These debt issuance costs are amortized over the term of the debt using the effective interest method, and are recorded in the condensed consolidated statements of operations as “Interest expense".

 

The following table shows the activity with respect to the carrying value of the long-term debt, in thousands:

 

Long-term debt at closing of Pharmakon loan

   $ 75,000  

Capitalized costs and discounts

     (4,207 )

Interest expense

     5,215  

Amounts paid and payable

     (4,138 )

Carrying value of Pharmakon loan as of September 30, 2022

   $ 71,870