Borrowings |
6 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Borrowings | 9. Borrowings The Company’s borrowings as of June 30, 2026 are as follows (in thousands):
Blackstone Credit Facility On August 6, 2025 (the “Closing Date”), the Company entered into a senior secured term loan agreement, which was subsequently amended on August 24, 2025 (as amended, the “Credit Agreement”), with Blackstone Alternative Credit Advisors LP, as Blackstone Representative and Lead Arranger (in such capacity, “Blackstone”), the lenders party thereto from time to time, the subsidiary guarantors party thereto from time to time, and Wilmington Trust, National Association, as administrative agent and collateral agent for the lenders (in such capacity, the “Agent”). Pursuant to the credit facility provided for by the Credit Agreement (the “Blackstone Credit Facility”), the lenders (i) funded a $75 million initial term loan on the Closing Date; (ii) provided $250.0 million in delayed draw term loans on October 7, 2025 in connection with the transactions contemplated by the merger agreement with scPharma, with an additional $50.0 million in delayed draw term loan commitments remaining available under the Credit Agreement subject to certain customary draw down conditions, and (iii) made available up to $300.0 million in the form of uncommitted delayed draw term loans, which the Company may borrow in the future subject to mutual agreement with Blackstone and the lenders under the Credit Agreement. After deducting debt issuance costs payable by the Company, the net proceeds from the Blackstone Credit Facility were approximately $317.7 million. Amortization of debt issuance costs related to the Blackstone Credit Facility for the three and six months ended June 30, 2026 were approximately $0.4 million and $0.7 million, respectively. As of June 30, 2026, the unamortized debt issuance costs were $5.9 million. The Blackstone Credit Facility will mature on August 6, 2030 (the “Maturity Date”). The Company elected to borrow the existing term loans as SOFR Loans, which bear interest at a rate per annum equal to one, three or six month term SOFR (at the Company’s election), subject to a 2.00% floor (the “Adjusted Term SOFR”), plus a margin of 4.75%. Upon the occurrence and continuation of an event of default under the Credit Agreement, interest on the term loans accrues at the applicable rate plus 2.00% per annum. Interest is paid quarterly or, if the Company elects 1-month SOFR, monthly. The interest rate margin for a SOFR loan increases to 5.00% at any time the Company’s ratio of indebtedness to adjusted EBITDA (measured on a trailing four quarter basis) is greater than or equal to 5.00:1.00 as of the most recent fiscal quarter for which the Company has delivered financial statements. As of June 30, 2026, the effective interest rate is 9.12% per annum. Term loans under the Credit Agreement are funded net of an upfront fee payable by the Company. The Company shall pay the delayed draw term loan lenders a ticking fee at a rate per annum equal to 1.00% of the daily unused portion of the delayed draw term loan commitments beginning on the one year anniversary of the agreement through the end of the delayed draw commitment period, payable quarterly in arrears. All term loans under the Blackstone Credit Facility, as well as any accrued and unpaid interest and fees, are repayable on the Maturity Date. The Company has the option to prepay the loans under the Blackstone Credit Facility in whole or in part, subject to early prepayment fees in an amount equal to (a) the greater of (i) the present value of the sum of (x) 3.00% of the principal amount to be prepaid as if that amount would otherwise be prepaid on the first anniversary of the Closing Date, and (y) the amount of all interest which would otherwise have accrued under the Credit Agreement for the period from the date of such prepayment to the first anniversary of the Closing Date, assuming an interest rate for such period equal to the sum of the applicable margin for SOFR Loans plus Adjusted Term SOFR as of the date of determination, computed using a discount rate equal to the treasury rate as of such date plus 50 basis points (the “Make Whole Premium”) and (ii) 3.00% of the principal amount to be prepaid if prepayment occurs on or prior to the first anniversary of the Closing Date, (b) 3.00% of principal prepaid if prepayment occurs after the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date, (c) 1.00% of principal prepaid if prepayment occurs after the second anniversary of the Closing Date and prior to or on the third anniversary of the Closing Date and (d) 0.00% after the third anniversary of the Closing Date. In addition, subject to the terms and conditions of the Credit Agreement, the Company is required to make a mandatory prepayment of the term loans upon occurrence of certain events such as upon certain assets sales, events of loss, incurrence of debt not permitted to be incurred under the Credit Agreement, or a change of control. The Company’s obligations under the Blackstone Credit Facility are guaranteed by each of the Company’s subsidiaries and any future subsidiaries, subject to limited exceptions set forth in the Credit Agreement, and are secured by a first-priority perfected security interest (subject to permitted liens), on substantially all of the assets of the Company and the subsidiary guarantors, including intellectual property. The Credit Agreement includes representations and warranties, affirmative covenants (including reporting obligations), negative covenants and events of default that are usual and customary for facilities of this type, in each case, subject to certain permitted exceptions as set forth therein. The Credit Agreement also contains a financial covenant for the benefit of the lenders, which requires the Company to have liquidity of at least $40.0 million as of the last business day of each fiscal quarter ending after the Closing Date, with liquidity defined as our unrestricted cash and cash equivalents which are subject to a control agreement, in favor of the Agent, for the benefit of the lenders. As of June 30, 2026, there were no events of default and the Company was in compliance with all covenants under the Credit Agreement. Senior convertible notes In March 2021, the Company issued $230.0 million aggregate principal amount of senior convertible notes (the “senior convertible notes”) in a private offering. The Company’s net proceeds from the March 2021 offering were approximately $222.7 million, after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The senior convertible notes were issued pursuant to an indenture, dated March 4, 2021 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The senior convertible notes were general unsecured obligations of the Company and matured on March 1, 2026. The senior convertible notes bore cash interest from March 4, 2021 at an annual rate of 2.50% payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021. On December 17, 2024, the Company entered into separate, privately negotiated exchange agreements (the "Exchange Agreements") with certain holders (the “Holders”) of the senior convertible notes. Under the terms of the Exchange Agreements, the Holders agreed to exchange an aggregate principal amount of approximately $193.7 million of the senior convertible notes in exchange for an aggregate of 26,749,559 shares of the Company’s common stock. In addition, pursuant to the exchange agreements, the Company made an aggregate cash payment of approximately $89.2 million to the Holders for additional exchange consideration. Immediately following the exchange, approximately $36.3 million in aggregate principal amount of the senior convertible notes remained outstanding. On March 4, 2026, the Company settled the remaining $36.3 million aggregate principal amount of the senior convertible notes, all of which were tendered for conversion prior to the maturity date of March 1, 2026. The settlement was made on March 4, 2026 with $35.5 million in cash and 569,023 shares of the Company’s common stock. The issuance of shares in connection with the repayment resulted in a loss on settlement of debt of approximately $0.9 million which was recorded in the condensed consolidated statements of operations in March 2026. |
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