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Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt

Note 5. Debt

In January 2019, the Company entered into credit and security agreements with MidCap Financial Services, or the Lender, which provided a maximum of $25.0 million credit facility consisting of a $20.0 million senior secured term loan (the "2019 Term Loan") and a $5.0 million 2019 revolving loan (the "2019 Revolver" and collectively with the 2019 Term Loan, the “2019 MidCap Credit Facility”). In November 2020, the Company entered into amended and restated credit and security agreements with the same institution, which replaced the 2019 MidCap Credit Facility, and provided for a maximum of $40.0 million credit facility consisting of a $35.0 million senior secured term loan (the "2020 Term Loan") and a $5.0 million revolving loan (the "2020 Revolver and collectively with the 2020 Term Loan, the “2020 MidCap Credit Facility”).

The obligations under the MidCap Loan Agreements are guaranteed by the Company's current and future subsidiaries, subject to exceptions for certain foreign subsidiaries. Obligations under the agreements are secured by substantially all assets of the Company, including material intellectual property. Additionally, the Company is subject to customary affirmative and negative covenants as defined in the credit agreement, including covenants that limit or restrict the ability to, among other things, incur indebtedness, grant liens, merge or consolidate, make investments, dispose of assets, make acquisitions, pay dividends or make distributions, repurchase stock and enter into certain transactions with affiliates, in each case subject to certain exceptions. The agreements also have financial covenants that relate to minimum trailing revenue targets, which began in November 2020, and are tested on a monthly basis. As of December 31, 2021, the Company was in compliance with all financial and non-financial covenants.

The MidCap Loan Agreements each contain events of default that include, among others, non-payment of principal, interest or fees, breach of covenants, inaccuracy of representations and warranties, cross-defaults and bankruptcy and insolvency events.

2020 Term Loan

The 2020 Term Loan has a five-year term and has a stated floating interest rate which equates to reserve- adjusted LIBOR + 7.00%. The effective interest rate at December 31, 2021 was 12.94%. The 2020 Term Loan is split into three tranches as follows: (i) the Tranche One Loans provide for $12.0 million in term loans which are deemed to have been converted from Tranche One Loans that were drawn and outstanding under the 2019 Term Loan immediately prior to entering into 2020 MidCap Credit Facility, (ii) the Tranche Two Loans provided for up to $2.0 million in term loans which are deemed to have been converted from Tranche Two Loans that were drawn and outstanding under the 2019 Term Loan

immediately prior to entering into 2020 MidCap Credit Facility, and (iii) the Tranche Three Loans provided for up to $21.0 million in new term loans. The Company borrowed $21.0 million under the Tranche Three Loans in November 2020.

The 2020 Term Loan requires monthly interest-only payments, which began in December 2020. Principal payments are scheduled to begin in December 2022, however, the interest-only period can be extended by an additional 24 months provided that the Company is in compliance with certain financial covenants and other terms as defined in the MidCap Loan Agreements. The Company currently has the ability to and intends to extend the interest-only period through December 2023.

In conjunction with entry into the 2020 MidCap Credit Facility, the Company issued a 10-year warrant to the Lender to purchase 300,000 shares of the Company’s Series F redeemable convertible preferred stock (the “2020 Warrant”) at an exercise price of $21.88 per share (see Note 9). The estimated fair value at issuance of the 2020 Warrant of $1.8 million. The 2020 Warrant was recorded at the fair value as a debt discount and as a warrant liability. In addition, the Company incurred $0.5 million of issuance costs paid to the Lender in conjunction with the 2020 Term Loan which represents a debt discount. The Company concluded that the 2020 Term Loan represented a modification of the 2019 Term Loan and accounted for the 2020 Term Loan as debt modification.

A final payment fee of 6% of the amounts borrowed is payable at the end of the term or when the borrowings are repaid in full. A long-term liability is being accreted using the effective interest method for the final payment fee over the term of the loan agreement. The borrowings are collateralized by a security interest in substantially all of the Company’s assets. The Company accrued $0.9 million and $0.5 million as of December 31, 2021 and 2020, respectively, related to accretion of final payment due at maturity per the agreement using the effective interest rate method.

2020 Revolver

The 2020 Revolver has a four-year term and has a stated floating interest rate which equates to reserve- adjusted LIBOR plus 4.50%. An unused line fee of 0.5% is payable monthly based on the average unused balance and a collateral management fee of 0.5% is payable monthly based on the outstanding balance of the 2020 Revolver. The Company can request to increase the 2020 Revolver commitment amount to $15.0 million under the term of the agreement. As of December 31, 2021, $5.0 million was available to be drawn under the 2020 Revolver.

Long-term and short-term debt as of December 31, 2021 and 2020 was as follows (in thousands):

 

 

As of December 31,

 

 

 

2021

 

 

2020

 

2020 Term Loan

 

$

35,000

 

 

$

35,000

 

Total principal payments due

 

 

35,000

 

 

 

35,000

 

Less: debt discount related to warrant liability and issuance costs

 

 

(2,344

)

 

 

(3,045

)

Total amounts outstanding

 

 

32,656

 

 

 

31,955

 

Less: Current portion

 

 

—

 

 

 

—

 

Total accrued and other current liabilities

 

$

32,656

 

 

$

31,955

 

The repayment schedule relating to the Company’s principal debt as of December 31, 2021, is as follows (in thousands):

 

 

Amount

 

2022

 

 

—

 

2023

 

 

(1,458

)

2024

 

 

(17,500

)

2025

 

 

(16,042

)

Total repayments

 

$

(35,000

)