Note 9 - Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Text Block] |
Note 9—Debt:
Long term debt consisted of the following (in thousands):
Athyrium Note Purchase Agreement:
The Company issued senior notes for an aggregate principal amount of $100.0 million pursuant to a note purchase agreement dated July 23, 2021 by the Company, and its subsidiary, and Athyrium, as Administrative Agent, and certain other investor parties (the “Note Purchase Agreement”), with an initial maturity date of July 23, 2026 (the “Athyrium Notes”). The Athyrium Notes were issued for face amount of $100.0 million net of an original issue discount of $1.5 million. The Athyrium Notes also required a 2.0% exit payment to be made on each payment of principal. The borrowings under the Athyrium Notes, together with cash on hand, were used to repay the Company’s outstanding indebtedness, including the applicable exit and prepayment fees owed to lenders under its prior credit facility with Oxford. The Athyrium Notes were secured by substantially all of the Company’s assets. The Company incurred $1.9 million of deferred financing costs with the initial borrowing of the Athyrium Notes.
Interest on the Athyrium Notes was calculated in part based on the Secured Overnight Financing Rate (“SOFR”), which replaced the “London Interbank Offered Rate” as the floating benchmark for interest rate calculations applicable to the Athyrium Notes pursuant to the terms of the Third Amendment to Note Purchase Agreement dated as of September 16, 2022 (the “Third Amendment”). The modification of the Note Purchase Agreement pursuant to the Third Amendment did not meet the requirements of a debt extinguishment under ASC Topic 470-50—Debt Modifications and Exchanges and no gain or loss was recognized. The Company performed a quantitative analysis and determined that the terms of the new debt and original debt instrument were not substantially different. Accordingly, the Third Amendment was accounted for as a debt modification.
Following the effectiveness of the Third Amendment, the Athyrium Notes bore interest at an annual rate equal to the sum of (a) eight percent (8.00%) plus (b) the lesser of (i) the sum of (x) three-month term SOFR for an interest period of three months plus (y) 0.26161% (26.161 basis points) and (ii) three and one-half of one percent (3.50%) per annum. Interest was payable quarterly on the last business day of March, June, September, and December each year. In the second quarter of 2024, the Company began paying principal payments required to be made quarterly at 11.11% of the original face amount. Each principal payment also included a 2.0% exit payment. Each quarterly principal payment approximated $11.1 million, and each quarterly exit fee payment approximated $0.2 million. Immediately prior to repayment described below, the effective interest rate for the Athyrium Notes was 12.99%.
On May 4, 2026, the Company paid $11.5 million to Athyrium Opportunities IV Co-Invest 1 LP, consisting of principal, interest and exit fees due under the 2021 Note Purchase Agreement. This payment was made ahead of the maturity date of July 23, 2026, reduced the principal balance outstanding under the Athyrium Notes to zero and terminated all remaining obligations of the Company under the 2021 Note Purchase Agreement, other than customary continuing indemnification obligations.
Debt Issuance Costs and Discounts:
Debt issuance costs and discounts consist of the following (in thousands):
Debt issuance costs and discounts are financing costs related to the Company’s outstanding debt. Amortization of debt issuance costs is expensed using the effective interest method and is included in interest expense in the condensed consolidated statement of operations. The Company recorded nominal amounts of interest expense for the thee months ended June 30, 2026, and $0.1 million of interest expense for the six months ended June 30, 2026. For three and six months ended June 30, 2025, the Company recorded approximately $0.1 million and $0.3 million of interest expense, respectively.
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