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Note 10 - Long-term Debt
 6 Months Ended
Jun. 30, 2023
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. The second tranche of $25 million was funded in  December 2022. 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%. On June 29, 2023, the loan agreement with Pharmakon was amended to replace the benchmark governing the interest rate with a rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York.  Effective July 2023, the loan will accrue interest using a benchmark rate of 3-month SOFR plus a 0.26161% adjustment. 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 sheets. 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

 $100,000 

Capitalized costs and discounts

  (4,217)

Interest expense

  8,438 

Amounts paid

  (6,685)

Carrying value of Pharmakon loan as of December 31, 2022

  97,537 

Interest expense

  7,314 

Amounts paid

  (6,555)

Carrying value of Pharmakon loan as of June 30, 2023

 $98,296