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Debt | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
Debt | Note 5. Debt Hercules Capital Loan Agreement In January 2024, the Company entered into the Hercules Loan Agreement, which provides for a maximum $65.0 million credit facility. An initial tranche of $35.0 million (the “Initial Loan”) was funded under the credit agreement on January 22, 2024 (the “Closing Date”). On December 10, 2024, we consummated the Tranche 1(b) Drawdown (together with the Initial Loan, the "Tranche I Commitment"). In addition to the Initial Loan and Tranche 1(b) Drawdown, the Hercules Loan Agreement provides additional tranches available to the Company (the “Tranche Loans,” and together with the Initial Loan, the “Term Loans). Tranche 2 consists of $10.0 million available to draw upon through September 15, 2025, contingent upon the achievement of certain performance milestones. The Company does not currently anticipate achieving these milestones prior to the deadline of June 30, 2025 performance deadline. Tranche 3 consists of $15.0 million available for us to draw through the interest only period in increments of $5.0 million, subject to the sole approval of Hercules' investment committee. On December 10, 2024, the Company consummated the drawdown of the $5.0 million Tranche 1(b) Term Loan Advance (the “Tranche Loan”) under the Hercules Loan Agreement. Upon consummation of the Tranche Loan, the aggregate principal amount of borrowings under the Loan Agreement was $40.0 million. The Hercules Loan Agreement provides for a maturity date of July 1, 2028, with an interest only period running for the first 30 months of the agreement term, extendable for an additional six months for a total of 36 months upon the achievement of certain milestones. The Term Loans accrue interest at a floating annual rate equal to the greater of 10.35% or the Wall Street Journal prime rate plus 2.35%, with the interest rate under the Term Loans equal to 10.35% at December 31, 2024. The final payment fee is set at 5.95% of the funded balance, which is recognized as a debt discount and is being accreted into the amortization of debt issuance costs using the effective interest rate method over the term of the loan. In conjunction with the funding of the Initial Loan, the Company issued warrants to the Lenders to purchase up to an aggregate of 135,686 shares of its common stock at an exercise price of $5.159 per share, which were recorded and classified as equity. On December 10, 2024, upon the funding of the Tranche 1(b) Drawdown, the Company issued additional warrants to the Lenders to purchase 26,095 shares of its common stock at an exercise price of $3.83. Each warrant is exercisable for a period of seven years from the date of issuance. If the additional Term Loans are funded, the Company will be obligated to issue to the Lenders additional warrants to purchase common stock in an amount equal to 2.0% of the funded balance of each tranche, divided by the exercise price on the date the Company draws funds from such tranche. The exercise price will be calculated using the five-day volume-weighted average stock price as of such date. See Note 7, Stockholders' Equity, for additional information regarding these common stock warrants. The obligations under the Hercules Loan Agreement are guaranteed by the Company and its future subsidiaries, subject to exceptions for certain foreign subsidiaries. The obligations under the agreement are secured by substantially all of the Company's assets, including its material intellectual property. Additionally, the Company is subject to customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company 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 Company is also subject to certain minimum cash and revenue covenants under the Hercules Loan Agreement. The Company was in compliance with all covenants as of December 31, 2024. MidCap Loan Agreement The Company previously entered into credit and security agreements with certain entities affiliated with MidCap Financial Services (such entities collectively, “MidCap”), which provided for a $35.0 million senior secured term loan (the “MidCap Term Loan”). In January 2024, the Company terminated the Amended and Restated Credit and Security Agreement (Term Loan) (the “MidCap Term Loan Agreement”) evidencing the MidCap Term Loan and paid off in full the secured obligations thereunder in connection with its entry into the Hercules Loan Agreement. The Company recorded a loss on debt extinguishment of $2.0 million during the year ended December 31, 2024. The commitment obligations under 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. The MidCap Term Loan Agreement had a maturity date of November 1, 2025. In addition, the MidCap Term Loan Agreement provided for a stated floating interest rate that was equal to the 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 MidCap Term Loan balance, which was recorded as a long-term interest payable as of December 31, 2023. Maturities Schedule Long-term and short-term debt, as of December 31, 2024 and 2023 was as follows (in thousands):
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
Term loan |  | $ | 40,000 |  |  | $ | 35,000 |
Total principal payments due |  |  | 40,000 |  |  |  | 35,000 |
Less: debt discount related to warrant liability and issuance costs |  |  | (644 | ) |  |  | (1,073 | )
Total amounts outstanding |  |  | 39,356 |  |  |  | 33,927 |
Less: Current portion, net of discount |  |  | — |  |  |  | (2,219 | )
Long-term debt |  | $ | 39,356 |  |  | $ | 31,708 |
The repayment schedule relating to the principal amount of the Hercules Term Loan as of December 31, 2024, is as follows (in thousands):
|  | Amount |
2025 |  |  | — |
2026 |  |  | 9,198 |
2027 |  |  | 19,941 |
2028 |  |  | 10,861 |
Thereafter |  |  | — |
Total repayments |  | $ | 40,000 |

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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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