Term Loan |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loan | 14. Term Loan In February 2026, the Company entered into a Loan and Security Agreement (the “LSA) with Banc of California (the Lender) for the issuance of a term loan facility with an aggregate principal amount of up to $30.0 million (the "Term Loan"). The Term Loan bears interest at an annual rate equal to the greater of the prime rate then in effect or 5%, payable monthly. The prime rate in effect as of March 31, 2026 was 6.75%. The maturity date of the Term Loan is June 30, 2030. In February 2026, the Company borrowed $15.0 million under the facility and the additional $15.0 million is available for draw down through December 31, 2027. In connection with the LSA, the Company granted the Lender a senior security interest in the Company’s property and other assets, which has priority over any existing or future indebtedness and related security interests, subject to limited exceptions, including the Company’s intellectual property. The LSA contains negative covenants that, among other things and subject to certain exceptions, could restrict the Company's ability to incur additional liens, incur additional indebtedness, sell or dispose of assets that constitute collateral, including certain intellectual property, and make payments of certain subordinated indebtedness. The LSA also contains certain events of default, including in the event of a material adverse change, and representations and warranties from the Company. Upon the occurrence of an event of default, Banc of California may declare all outstanding obligations immediately due and payable, take such other actions as set forth in the LSA, and increase the interest rate otherwise applicable to the amount outstanding under the LSA by an additional 3.00%. The Company is in compliance with the such covenants at March 31, 2026. The Company paid debt issuance costs of approximately $0.2 million in connection with the term loan facility. In addition, the Company issued a warrant to the Lender to purchase 22,500 shares of the Company’s common stock with the exercise price of $9.81 per share. The Company estimated the fair value of the warrant to be approximately $8.08 per share using a Black-Scholes option pricing model. The warrant will expire ten years from the date of issuance. The fair value of the warrant at issuance was $0.2 million and was recorded in Stockholders' Deficit. The issuance costs, which includes the amounts paid and the fair value of the warrant, that are directly attributable to the funded portion of the loan have been presented as a direct deduction from the carrying value of the debt and are being amortized to interest expense over the term of the facility using the effective interest method. Issuance costs attributable to the undrawn portion of the facility of $0.2 million have been capitalized within other assets.
As of March 31, 2026, the carrying value of the term loans consisted of the following (in thousands):
As of March 31, 2026, the $15.0 million borrowed under the facility is recorded in non-current liabilities as no principal payments were due in the next 12 months. During the three months ended March 31, 2026, the Company recorded $98 thousand of interest expense related to the term loan, of which $5 thousand were related to the amortization of the debt discounts. Estimated future principal payments due under the Term Loan are as follows as of March 31, 2026 (in thousands):
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