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Credit Facility and Term Loans | 6 Months Ended
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Jun. 30, 2019
Debt Disclosure [Abstract] |
Credit Facility and Term Loans | 6.CREDIT FACILITY AND TERM LOANS Credit facility and term loans consisted of the following as of December 31, 2018 and June 30, 2019:
|  | December 31, 2018 |  |  | June 30, 2019 |
|  | (in thousands) |
Mid Cap Credit facility |  | $ | 16,455 |  |  | $ | 20,357 |
Less: deferred debt issuance costs |  |  | (1,960 | ) |  |  | (1,614 | )
Less discount associated with issuance of warrants |  |  | (44 | ) |  |  | (36 | )
Total Mid Cap credit facility |  | $ | 14,451 |  |  | $ | 18,707 |
Horizon Term loan |  | $ | 15,000 |  |  | $ | 15,000 |
Less: deferred debt issuance costs |  |  | (1,022 | ) |  |  | (976 | )
Less discount associated with issuance of warrants |  |  | (929 | ) |  |  | (813 | )
Total Horizon term loan |  |  | 13,049 |  |  |  | 13,211 |
Less-current portion |  |  | — |  |  |  | — |
Term loan-non current portion |  | $ | 13,049 |  |  | $ | 13,211 |
MidCap Credit Facility and Term Loan On October 16, 2017, the Company entered into a three-year, $15.0 million revolving credit facility (the “Prior Credit Facility”) with MidCap pursuant to a credit and security agreement (the “Credit and Security Agreement”). As part of the Credit and Security Agreement, the Company also obtained a three-year, $7.0 million term loan with MidCap (the “Prior Term Loan”). On November 23, 2018, the Company exited the Prior Credit Facility with MidCap and entered into a new three-year $25.0 million revolving credit facility (the “Credit Facility”) with MidCap. The Credit Facility can be increased, subject to certain conditions, to $50.0 million. Loans under the Credit Facility are determined based on percentages of the Company’s eligible accounts receivable and eligible inventory. The Credit Facility bears interest at LIBOR plus 5.75% for outstanding borrowings. The Company is required to pay a facility availability fee of 0.5% on the average unused portion of the facility. The Credit Facility contains a minimum liquidity financial covenant that requires the Company to maintain a minimum of $5.0 million in cash on hand or availability in the Credit Facility. In 2018, the Company incurred approximately $1.3 million in debt issuance costs which has been offset against the debt and will be expensed over the three years. Unamortized debt issuance costs of $0.7 million, relating to the Prior Credit Facility, will be amortized in accordance with the terms of the Credit Facility. As of December 31, 2018, there was $16.5 million outstanding on the Credit Facility and an available balance of approximately $1.4 million. As of June 30, 2019, there was $20.4 million outstanding on the Credit Facility and an available balance of approximately $1.1 million. As of June 30, 2019, the Company was in compliance with the financial covenants contained within the Credit Facility. The Company recorded interest expense from the credit facilities of approximately $0.3 million and $0.8 million for the three months ended June 30, 2018 and 2019, respectively, which included $0.1 million and $0.2 million, respectively, relating to debt issuance costs. The Company recorded interest expense from the credit facilities of approximately $0.6 million and $1.5 million for the six months ended June 30, 2018 and 2019, respectively, which included $0.2 million and $0.4 million, respectively, relating to debt issuance costs. The Company recorded interest expense from the Prior Term Loan of $0.2 million and $0.5 million for the three and six months ended June 30, 2018, which included less than $0.1 million and less than $0.1 million relating to debt issuance costs, respectively. On December 31, 2018, the Company repaid the Prior Term Loan with MidCap for $4.9 million as part of the entry into a new term loan with Horizon, including $0.1 million of a prepayment penalty. Horizon Term Loan On December 31, 2018, the Company entered into a new term loan agreement with Horizon (the “Horizon Loan Agreement”). As part of the agreement, the Company obtained a five-year $15.0 million term loan (the “Term Loan”). The Term Loan bears interest at 9.90% plus the amount by which one-month LIBOR (or, if LIBOR is no longer widely used or available, a successor benchmark rate, which successor rate shall be applied in a manner consistent with market practice, or if there is no consistent market practice, such successor rate shall be applied in a manner reasonably determined by Horizon) exceeds 2.50% for outstanding borrowings and payments on principal are made on a monthly basis. The maturity date of the Term Loan is January 2023. The Term Loan contains minimum required EBITDA financial covenants that require the Company to achieve EBITDA of certain amounts based on the amount that the Company is permitted to borrow under the Credit Facility (the “Revolving Line Indebtedness Cap”). The Horizon Loan Agreement also contains a cash collateral covenant that requires the Company to maintain a cash collateral account with an amount based on the Revolving Line Indebtedness Cap. In connection with the Horizon Term Loan Agreement, the Company issued to Horizon warrants to purchase 76,923 shares of its common stock at an exercise price of $15.60 per share. The warrants are exercisable and expire ten years from the date of issuance. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.9 million, which has been recorded as a debt discount against the Term Loan. The Company incurred approximately $1.0 million in debt issuance costs which has been offset against the debt and will expense over the five years. The Credit Facility and the Term Loan contain a minimum liquidity covenant that requires the Company to maintain at minimum $5.0 million in unrestricted cash at all times, subject to increases based on amounts drawn. Further, there are additional covenants that, among other things, restrict the ability of the Company and certain of its subsidiaries to (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or redeem or repurchase capital stock; (iii) make other restricted payments; (iv) incur liens; (v) redeem debt that is junior in right of payment to the notes; (vi) sell or otherwise dispose of assets, including capital stock of subsidiaries; (vii) enter into mergers or consolidations; and (viii) enter into transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications. As of June 30, 2019, there was $15.0 million outstanding on the Term Loan and the Company was in compliance with the financial covenants contained within the loan. The Company recorded interest expense from the Term Loan of $0.5 million and $1.0 million for the three and six months ended June 30, 2019, respectively, which included $0.1 million and less than $0.3 million, respectively, relating to debt issuance costs. Interest Expense, Net Interest expense, net consisted of the following for the three and six months ended June 30, 2018 and 2019:
|  | Three Months Ended |
|  | June 30, 2018 |  |  | June 30, 2019 |
|  | (in thousands) |
Interest expense |  | $ | 506 |  |  | $ | 1,288 |
Interest income |  |  | — |  |  |  | (7 | )
Total Interest expense, net |  | $ | 506 |  |  | $ | 1,281 |
|  | Six Months Ended |
|  | June 30, 2018 |  |  | June 30, 2019 |
|  | (in thousands) |
Interest expense |  | $ | 1,063 |  |  | $ | 2,501 |
Interest income |  |  | — |  |  |  | (7 | )
Total Interest expense, net |  | $ | 1,063 |  |  | $ | 2,494 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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