Long-Term Debt |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt | LONG-TERM DEBT Long-term debt consisted of the following:
Hercules Loan Agreement The Company is party to the Hercules Loan Agreement, which provides for an aggregate term loan facility of up to $107.5 million, under which the Company has borrowed an aggregate of $75.0 million of term loans, representing the maximum borrowings allowable as of June 30, 2025. Additional borrowings are available subject to approval of the Lender in its sole discretion. Borrowings under the Hercules Loan Agreement accrue interest at a variable rate equal to the greater of (i) 10.15% or (ii) The Wall Street Journal prime rate plus 3.15%. In an event of default and until such event is no longer continuing, the interest rate applicable to borrowings would be increased by 4.0%. Borrowings are repayable in monthly interest-only payments through July 1, 2027, which is the maturity date of the Hercules Loan Agreement. At the Company’s option, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment premium of 1%. In addition, the Hercules Loan Agreement provides for payment of end-of-term fees of $2.8 million plus 3.5% of the aggregate principal amount of loans drawn, if any, subsequent to the most recent amendment in August 2023, payable upon the earlier of maturity or the repayment in full of all obligations under the Hercules Loan Agreement. Borrowings under the Hercules Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets except for its intellectual property (but including rights to payment and proceeds from the sale, licensing or disposition of the intellectual property). Under the Hercules Loan Agreement, the Company has agreed to affirmative and negative covenants. The Company must maintain cash, cash equivalents or liquid assets in an account or accounts in which Hercules has a first priority security interest (“Qualified Cash”) in an aggregate amount equal to at least 20% of the aggregate principal amount of loans outstanding under the Hercules Loan Agreement, which equals $15.0 million as of the issuance of these condensed consolidated financial statements. The Company must also continue to achieve a Performance Covenant, which includes maintaining a trailing six-month net product revenue of at least 55% of its forecast as approved by the Company’s Board of Directors. Such Performance Covenant is waived during any period in which: (i.) the Company maintains Qualified Cash, as defined in the Hercules Loan Agreement, in an aggregate amount equal to at least 75% of loans outstanding under the Hercules Loan Agreement or (ii.) both (x.) the Company maintains a Market Capitalization (as defined in the Hercules Loan Agreement) of at least $450.0 million and (y.) the Company maintains Qualified Cash in an aggregate amount equal to at least 45% of loans outstanding. The Hercules Loan Agreement also restricts the Company’s ability to incur additional indebtedness, pay dividends, encumber its intellectual property, or engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses, with certain exceptions. The Company recognized interest expense under the Hercules Loan Agreement as follows:
The annual effective interest rate on the Hercules Loan Agreement as of June 30, 2025 was 11.7%. There were no principal payments due or paid under the Hercules Loan Agreement during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, future principal and accrued end-of-term payments of $76.4 million under the Hercules Loan Agreement are due on July 1, 2027.
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