Note 10 - Long-term Debt |
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| Debt Disclosure [Text Block] |
Note 10 – Long-Term Debt
On March 7, 2022, the Company entered into a loan agreement with Pharmakon (the "2022 Loan Agreement") for a senior secured term loan of up to $100 million in two tranches. The first tranche of $75 million was funded in March 2022. The second tranche of $25 million was funded in December 2022.
On June 29, 2023, the 2022 Loan Agreement with Pharmakon was amended to replace the benchmark governing the interest rate with a rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York. Effective July 2023, the loan accrued interest using a benchmark rate of three-month SOFR plus 8.25% plus an additional adjustment of 0.26161%.
On March 13, 2024, the Company entered into an amended and restated loan agreement with Pharmakon, which replaced the 2022 Loan Agreement, for an additional third and fourth tranche of senior secured loan (the "2024 Loan Agreement"). The third tranche of $25.0 million was funded in September 2024. The fourth tranche of $75.0 million became available at the Company's option no later than August 29, 2025, based upon having received FDA approval of a new drug application (“NDA”) for Zusduri by June 30, 2025. The Company did not draw down the fourth tranche. Under the 2024 Loan Agreement, prior to the refinancing described in the immediately following paragraph, all outstanding loans accrued interest using a benchmark rate of three-month SOFR plus 7.25% plus an additional adjustment of 0.26161%.
On February 26, 2026, (the "Closing Date") the Company entered into a second amended and restated loan agreement, which replaced the 2024 Loan Agreement, with Pharmakon providing for a senior secured term loan facility of up to $250.0 million, consisting of two tranches (the “2026 Loan Agreement”). The first tranche of $200.0 million was advanced on the Closing Date and refinanced the Company's term loan facility under the 2024 Loan Agreement which had $125.0 million of outstanding principal, with the remaining proceeds available for general corporate purposes and working capital. The second tranche of $50.0 million may, at the Company's option, be requested no later than June 30, 2027 for funding to occur no later than August 29, 2027, subject to customary conditions. The term loans mature on the fifth anniversary of the Closing Date.
All outstanding loans with Pharmakon pursuant to the 2026 Loan Agreement accrue interest at a fixed rate of 8.25%. The principal amount of the loans outstanding under the 2026 Loan Agreement shall be repayable in four equal quarterly payments commencing in the second quarter of 2030, which are subject to an exit fee of 1% of the principal amount being repaid. The Company may prepay the full outstanding principal amount of the loans in whole at the Company's discretion at any time, together with accrued but unpaid interest thereon and subject to prepayment premiums, make-whole amounts, as applicable, and fees.
The obligations of UroGen Pharma, Inc., as the borrower under the 2026 Loan Agreement, are guaranteed by UroGen Pharma Ltd., subject to customary limitations on parent guarantees under Israeli law, and are secured by substantially all of the tangible and intangible assets and property, including intellectual property, of UroGen Pharma, Inc. and UroGen Pharma Ltd., subject to certain exceptions. The refinancing of the Company's term loan facility with the 2026 Loan Agreement was accounted for by the Company as a debt modification under ASC 470, as the terms of the new arrangement were not considered substantially different from those of the existing debt. Accordingly, the Company did recognize a gain or loss on extinguishment, and existing unamortized debt issuance costs associated with the prior term loan were carried forward and continue to be amortized over the term of the modified debt using the effective interest method. The Company incurred financing expenses of $9.7 million related to the first tranche of the 2026 Loan Agreement funded in February 2026, which are recognized as a direct offset to the long-term debt on the Company's condensed consolidated balance sheets. These debt issuance costs are amortized over the term of the debt using the effective interest method, and are recorded in the condensed consolidated statements of operations as "Interest expense".
The following table shows the activity with respect to the carrying value of the long-term debt, in thousands:
The aggregate principal maturities of long-term debt as of March 31, 2026 are as follows, in thousands:
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