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Debt | 9 Months Ended
--- | ---
Sep. 30, 2021
Debt Disclosure [Abstract] |
Debt |
8. | Debt
We are party to a Financing Agreement, as amended (the “Financing Agreement”), with Sixth Street Specialty Lending, Inc., as administrative agent (the “Administrative Agent”), various lenders from time-to-time party thereto, and certain of our subsidiaries party thereto from time to time as guarantors. Interest on amounts borrowed under the Financing Agreement is due and payable quarterly in arrears, and the Financing Agreement matures on March 31, 2024. In January 2021, we entered into Amendment No. 7 to the Financing Agreement (“Amendment No. 7”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA for the fiscal quarters ending March 31, 2021 and June 30, 2021 were reduced, and we paid an amendment financing fee of $5.0 million, which was included as a component of deferred financing fees in long-term debt in the accompanying consolidated balance sheets. Additionally, in connection with entering into Amendment No. 7, the warrants issued to the Administrative Agent and the lenders under the Financing Agreement on August 5, 2020 were further amended to provide for an additional adjustment to the exercise price if we conducted certain dilutive issuances prior to March 31, 2021. No such adjustments were made to the exercise price of these warrants prior to the expiration of such period. In March 2021, we entered into Amendment No. 8 to the Financing Agreement (“Amendment No. 8”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA were revised, the amortization and prepayment terms of the borrowings under the Financing Agreement were revised, and the Administrative Agent consented to a framework for our potential disposition of our vitaCare Prescription Services business. With respect to amortization and prepayment terms of the borrowings under the Financing Agreement, in connection with Amendment No. 8, we (i) repaid $50.0 million in principal under the Financing Agreement during the three months ended March 31, 2021, plus a 5.0% prepayment fee and (ii) agreed to make additional quarterly principal repayments plus the prepayment fees described below starting on March 31, 2022 through March 31, 2024. Additionally, in connection with Amendment No. 8, the prepayment fees on principal amounts being prepaid under the Financing Agreement were revised as follows: (i) 30.0% of the principal amount being repaid through March 31, 2022 (excluding the scheduled $5.0 million principal repayment on such date, which is subject to a 5.0% prepayment fee); (ii) 5.0% of the principal amount being repaid from April 1, 2022 through March 31, 2023; (iii) 3.0% of the principal amount being repaid from April 1, 2023 through March 31, 2024; and (iv) thereafter, none, in each case subject to certain limited exceptions, including with respect to a repayment in full of the obligations under the Financing Agreement. Our debt consisted of the following (in thousands):
|  | September 30, 2021 |  |  | December 31, 2020 |
Financing Agreement |  | $ | 200,000 |  |  | $ | 250,000 |
Less: deferred financing fees |  |  | 13,262 |  |  |  | 12,302 |
Debt, net |  |  | 186,738 |  |  |  | 237,698 |
Current maturities of long-term debt |  |  | 15,000 |  |  |  | — |
Long-term debt |  | $ | 171,738 |  |  | $ | 237,698 |
Our future principal payments under the Financing Agreement are as follows (in thousands), excluding the prepayment fees described above:
Due on |  |  |  |  |
|  | March 31, |  |  | June 30, |  |  | September 30, |  |  | December 31, |  |  | Total |
2022 |  | $ | 5,000 |  |  | $ | 5,000 |  |  | $ | 5,000 |  |  | $ | 10,000 |  |  | $ | 25,000 |
2023 |  |  | 10,000 |  |  |  | 41,250 |  |  |  | 41,250 |  |  |  | 41,250 |  |  |  | 133,750 |
2024 |  |  | 41,250 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 41,250 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 200,000 |
Interest and financing costs Interest expense and other financing costs consisted of the following (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Interest expense |  | $ | 5,391 |  |  | $ | 6,727 |  |  | $ | 17,175 |  |  | $ | 19,324 |
Interest prepayment fees |  |  | 650 |  |  |  | — |  |  |  | 4,008 |  |  |  | — |
Financing fees amortization |  |  | 1,477 |  |  |  | 953 |  |  |  | 4,158 |  |  |  | 1,645 |
Interest expense and other financing costs |  | $ | 7,518 |  |  | $ | 7,680 |  |  | $ | 25,341 |  |  | $ | 20,969 |
Both Amendment No. 7 and No. 8 were accounted for as debt modification in accordance with U.S. GAAP. Accordingly, the unamortized deferred financing fees at each amendment date and the financing fee of $5.0 million for Amendment No. 7 are being deferred. These deferred financing fees are being amortized over the remining term of our Financing Agreement. The estimated future amortization of our deferred financing fees is as follows (in thousands):
Year Ending December 31, |  |  |  |
2021 (3 months) |  | $ | 1,532 |
2022 |  |  | 6,346 |
2023 |  |  | 4,990 |
2024 |  |  | 394 |
|  | $ | 13,262 |
Debt covenants compliance The Financing Agreement requires us to have a minimum unrestricted cash balance of $60.0 million. As of the filing date of this 10-Q Report, our cash balance was above the required minimum balance. Based on our current projections, we will need to raise additional capital to remain in compliance with the minimum cash balance covenant for the next twelve months from the issuance of the consolidated financial statements included in this 10-Q Report. See Note 1 – Basis of presentation and summary of significant accounting policies - Going Concern above. The Financing Agreement also requires us to maintain certain minimum quarterly product net revenue requirements and several other restrictive covenants, which could also be affected by the continued impact of the COVID-19 pandemic or issues in our supply chains related to our third-party contract manufacturers. These and other terms in the Financing Agreement must be monitored closely for compliance and could restrict our ability to grow our business or enter into transactions that we believe would be beneficial to our business. If we are unable to maintain the minimum unrestricted cash balance, achieve any of the total minimum net revenue requirements or otherwise comply with any other covenant of the Financing Agreement, all or a portion of our obligations under the Financing Agreement may be declared immediately due and payable, which would have an adverse effect on our business, results of operations and financial condition. As of September 30, 2021, we were in compliance, in all material respects, with our covenants under the Financing Agreement.

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