DEBT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| DEBT | DEBT Convertible Notes In May 2026, the Company completed a public offering of $250.0 million aggregate principal amount of its 1.75% convertible senior notes due 2032 (the “Notes”), including the exercise in full of the underwriters’ option to purchase up to an additional $25.0 million aggregate principal amount of the Notes. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of May 11, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee. The Notes are general, unsecured, senior obligations of the Company. The Notes will accrue interest payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2026, at a rate equal to 1.75% per year. In addition, special interest will accrue on the Notes upon the occurrence of certain events relating to the Company’s failure to file certain reports with the SEC as provided in the Indenture. The Notes will mature on May 15, 2032, unless earlier converted, redeemed or repurchased by the Company. Noteholders may convert their Notes at their option only in the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2026, if the last reported sale price per share of the Company’s common stock, $0.01 par value per share, exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “Measurement Period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the common stock, as described in the Indenture; (4) if the Company calls such Notes for redemption; and (5) at any time from, and including, February 15, 2032 until the close of business on the scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate is 40.5680 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $24.65 per share, and is subject to adjustment as described in the Indenture. The Notes are not redeemable prior to May 20, 2030. On or after May 20, 2030, the Company may redeem the Notes for cash (subject to certain limitations set forth in the Indenture) if the last reported sale price per share of the common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $75.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. As of June 30, 2026, the Notes are classified as a long-term liability on the condensed consolidated balance sheets and presented net of unamortized debt discount and issuance costs of $7.8 million. The issuance costs are amortized to interest expense over the contractual term of the Notes. As of June 30, 2026, the effective interest rate of the Notes is 2.32%. The outstanding balance of the Notes as of June 30, 2026 consisted of the following:
As of June 30, 2026, the estimated fair value of the Notes was approximately $271.1 million. The fair value was determined based on the quoted price of the Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 in the fair value hierarchy. Loan and Security Agreement with Hercules Capital, Inc. In April 2022, the Company entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of its subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders named therein (the “Lenders”). Under the Hercules Loan and Security Agreement, the Lenders provided the Borrower with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches, including an initial tranche of $25.0 million. Upon signing the Hercules Loan and Security Agreement, the Borrower drew an initial principal amount of $5.0 million. The Borrower was originally obligated to make interest-only payments through April 1, 2024, which was extended to October 1, 2024 upon the achievement of a development milestone in August 2022. In August 2023, the Borrower executed the first amendment to the Hercules Loan and Security Agreement (the “Hercules First Amendment”). The Hercules First Amendment was determined to substantially alter the Hercules Loan and Security Agreement and therefore was accounted for as a debt extinguishment. Under the Hercules First Amendment, the maturity date was extended to October 1, 2026 and the Lenders provided the Borrower access to an increased term loan with an aggregate principal amount of up to $150.0 million, in four tranches, consisting of (i) an initial tranche of $50.0 million, $25.0 million of which was available through December 15, 2023 and $25.0 million of which was available from July 1, 2024 through December 15, 2024; (ii) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through February 15, 2025; (iii) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, which was available through March 31, 2025; and (iv) a fourth tranche of $60.0 million subject to approval by the Lenders’ investment committee(s), which was available through June 15, 2025. Upon execution of the Hercules First Amendment, the Borrower drew an additional principal amount of $15.0 million, increasing the cumulative amount drawn to $20.0 million. The obligations of the Borrower under the Hercules First Amendment agreement were secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property. In October 2025, the Borrower executed a second amendment (the “Hercules Second Amendment”) to the Hercules Loan and Security Agreement. Under the Hercules Second Amendment, the term loan facility was amended to extend the maturity date to October 1, 2030 and provide an aggregate principal amount of up to $300.0 million, consisting of (i) an initial tranche of $100.0 million (“Tranche 1”), comprised of $30.0 million drawn upon execution of the Hercules Second Amendment, increasing the cumulative amount drawn to $50.0 million, $25.0 million (“Tranche 1B”) available through September 15, 2026, and $25.0 million available from the earlier to occur of the expiration or full funding of Tranche 1B through December 15, 2026, (ii) a second tranche of $50.0 million (“Tranche 2”), subject to achievement of certain regulatory milestones, available from (A) the earlier to occur of the full draw of Tranche 1 and December 15, 2025 through (B) the earlier to occur of June 15, 2027 and the date that is 60 days following such achievement of such regulatory milestones (the “Tranche 2 Expiration Date”), (iii) a third tranche of $50.0 million (“Tranche 3”), subject to achievement of certain regulatory milestones, available from (A) the earlier to occur of the full draw of Tranche 2 and the Tranche 2 Expiration Date through (B) the earlier to occur of June 15, 2027 and the date that is 60 days following such achievement of such regulatory milestones (the “Tranche 3 Expiration Date”), (iv) a fourth tranche of $50.0 million, subject to achievement of a certain revenue milestone, available from (A) the earlier to occur of the full draw of Tranche 3 and the Tranche 3 Expiration Date through (B) March 15, 2028, and (v) a fifth tranche of $50.0 million, subject to approval by the Lenders’ investment committee(s), available through October 1, 2030. The milestones for Tranche 2, Tranche 3 and Tranche 4 have not yet been achieved. The obligations of the Borrower under the Hercules Second Amendment are secured by substantially all of the assets of the Borrower. In May 2026, using proceeds received from the issuance of the Notes described above, the Company and Hercules entered into a payoff letter for a voluntary prepayment with respect to the Hercules Loan and Security Agreement (the “Payoff Letter”). Pursuant to the Payoff Letter, the Company paid a total of $55.1 million (the “Payoff Amount”) to Hercules, representing the outstanding principal, accrued and unpaid interest, fees, costs and expenses due to Hercules under the Hercules Loan and Security Agreement and related loan documents (collectively, the “Hercules Facility”), in repayment of the Company’s outstanding obligations and thereby terminated the Hercules Facility. The Company recorded a loss on extinguishment of debt of $4.1 million under "Other Income (Expense), net" in the Consolidated Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2026 related to the write-off of the remaining balance of unamortized debt discount. Upon receipt by Hercules of the Payoff Amount on May 27, 2026, all obligations, covenants, debts and liabilities of the Company under the Hercules Facility were satisfied and discharged in full, and the Hercules Facility was terminated.
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