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Senior Secured Term Loan Facilities | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Senior Secured Term Loan Facilities | 7. Senior Secured Term Loan Facilities In April 2023, the Company entered into a financing agreement (“Financing Agreement”) with investment funds managed by Morgan Stanley Tactical Value, as lenders (the “Lenders”), and Wilmington Trust, National Association, as the administrative agent, providing for senior secured term loan facilities consisting of (i) a $75.0 million initial term loan (the “Initial Term Loan”), (ii) a $37.5 million delayed draw term loan that will be funded upon the achievement of certain clinical development milestones (“Delayed Draw Term Loan 1”) and, (iii) an uncommitted delayed draw term loan of up to $37.5 million to be funded at the Lenders sole discretion, (“Delayed Draw Term Loan 2” and, together with the Initial Term Loan and Delayed Draw Term Loan 1, the “Term Loans”). Pursuant to the Financing Agreement, the Lenders have funded the Initial Term Loan. The clinical development milestones which could have triggered Delayed Draw Term Loan 1 were not achieved, and the Lenders have not funded Delayed Draw Term Loan 2. As such, these features expired during 2023. The Company has determined that certain other features embedded within the Loan should be bifurcated and accounted for separately as a derivative. At inception and as of March 31, 2025, the fair values of such derivatives were negligible due to the low probability of the underlying events. The Term Loans shall accrue interest at a fixed rate of 14.0% per annum, payable monthly in arrears. The Term Loans shall mature on May 8, 2026. The Term Loans will not be subject to amortization payments. The Company is permitted to prepay the Term Loans from time to time, in whole or in part, subject to payment of a make-whole amount equal to the unpaid principal amount of the portion of the Term Loans being repaid or prepaid, plus accrued and unpaid interest of the portion of the Term Loans being repaid or prepaid, plus an amount equal to the remaining scheduled interest payments due on such portion of the Term Loans being repaid or prepaid as if such Term Loans were to remain outstanding until the scheduled maturity date. The initial issuance costs and the related transaction costs, totaling $3.7 million is amortized as interest expense using the effective interest method over the term of the Initial Term Loan and are reported on the balance sheet as a direct deduction from the amount of the Initial Term Loan. The effective annual interest rate of the Initial Term Loan was 16.13% for the three months ended March 31, 2025 and 2024. The Company recorded interest expense of $3.0 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the related accrued interest was $0.4 million. The Company was in compliance with all debt covenants associated with the senior secured term loan facilities as of March 31, 2025, including maintaining a minimum balance of $30 million of unrestricted cash and cash equivalents held in accounts in the U.S.; such minimum balance covenant was subsequently amended to be $27 million on May 8, 2025 by the Company and the Lenders. The balances of the Company’s senior secured term loan facilities as of March 31, 2025 and December 31, 2024 were as follows (in thousands):
|  | March 31, 2025 |  |  | December 31, 2024 |
Principal of senior secured term loan facilities |  | $ | 75,000 |  |  | $ | 75,000 |
Less: Unamortized issuance costs and transaction costs |  |  | (1,581 | ) |  |  | (1,908 | )
Senior secured term loan facilities, ending balance |  |  | 73,419 |  |  |  | 73,092 |
Less: Current Portion classified to accrued and other current liabilities |  |  | — |  |  |  | — |
Senior secured term loan facilities, non-current |  | $ | 73,419 |  |  | $ | 73,092 |

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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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