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Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt

Note 5. Debt

In 2023, the Company had two credit and security agreements with certain entities affiliated with MidCap Financial Trust (such entities collectively, “MidCap”), which provided for a maximum $40.0 million credit facility, consisting of a $35.0 million senior secured term loan (the “MidCap Term Loan”) and a $5.0 million revolving loan (the "MidCap Revolver" and collectively with the Term Loan, the “MidCap Credit Facility”). In July 2023, the Company paid off and discharged all of its obligations under the agreement evidencing the MidCap Revolver, which terminated in accordance with the provision of the payoff and termination agreements. As of December 31, 2023, the MidCap Term Loan remained outstanding.

As of December 31, 2023, commitment obligations under the Amended and Restated Credit and Security Agreement (Term Loan) (the “MidCap Term Loan Agreement”) were guaranteed by the Company’s current and future subsidiaries, subject to exceptions for certain foreign subsidiaries, and secured by substantially all assets of the Company, including material intellectual property. Additionally, as of December 31, 2023, the Company was subject to customary affirmative and negative covenants as defined in the MidCap Term Loan Agreement, including minimum revenue and cash covenants, as well as 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. As of December 31, 2023, the Company was in compliance with all financial and non-financial covenants under the MidCap Term Loan Agreement. The MidCap Term Loan Agreement had a maturity date of November 1, 2025, and principal payments under the Term Loan were scheduled to commence in December 2024.

As of December 31, 2023, the MidCap Term Loan Agreement contained events of default that included, among others, non-payment of principal, interest or fees, breach of covenants, inaccuracy of representations and warranties, cross-defaults and bankruptcy and insolvency events. In addition, as of December 31, 2023, the MidCap Term Loan Agreement included a stated floating interest rate that was reserve-adjusted Secured Overnight Finance Rate, plus 7.00%, and a provision for a final payment fee of 6.0% of the $35.0 million Term Loan balance, which had been partially accrued and recorded as a long-term interest payable in other noncurrent liabilities of $1.5 million as of December 31, 2023 and $1.2 million as of December 31, 2022.

In January 2024, the Company entered into a loan and security agreement (the “Hercules Credit Agreement”) with Hercules Capital Inc. (“Hercules”) and certain of its affiliates (collectively with Hercules, the “Lenders”), which provides for a maximum $65.0 million credit facility. At closing, Hercules funded $35.0 million, which the Company utilized to pay in full the balance due under the MidCap Term Loan. The Hercules Credit Agreement has a maturity date of July 1, 2028, with an interest only period of 30 months, which is extendable to up to 36 months. The stated floating interest rate under the Hercules Credit Agreement is the greater of 10.35% or the Prime Rate plus 2.35%, with the initial interest rate of 10.85%. The final payment fee under the Hercules Credit Agreement is 5.95% of the funded balance. Obligations under the agreement are subject to customary affirmative and negative covenants. In conjunction with the funding of the Hercules Credit Agreement, the Company issued warrants to the Lenders to purchase up to an aggregate of 135,686 shares of common stock at an exercise price of $5.159 per share, which have a term of seven years from date of issuance.

Long-term and short-term debt, as of December 31, 2023 and 2022 was as follows (in thousands):

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

MidCap Term Loan

 

$

35,000

 

 

$

35,000

 

Total principal payments due

 

 

35,000

 

 

 

35,000

 

Less: debt discount related to warrant liability and issuance costs

 

 

(1,073

)

 

 

(1,687

)

Total amounts outstanding

 

 

33,927

 

 

 

33,313

 

Less: Current portion, net of discount

 

 

(2,219

)

 

 

—

 

Long-term debt

 

$

31,708

 

 

$

33,313

 

 

The repayment schedule relating to the principal amount of the MidCap Term Loan as of December 31, 2023, is as follows (in thousands):

 

 

Amount

 

2024

 

 

(2,917

)

2025

 

 

(32,083

)

Thereafter

 

 

—

 

Total repayments

 

$

(35,000

)