Term Loan |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TERM LOAN | (7) TERM LOAN Oxford Finance and Silicon Valley Bank Loan In October 2022, the Company entered into a loan and security agreement, as amended, the Oxford-SVB Loan Agreement, with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank, or SVB, collectively the Oxford-SVB Lenders, for a secured term loan facility of up to $100.0 million. Pursuant to the Oxford-SVB Loan Agreement, the Company drew an initial loan of $10.0 million. Under the original terms of the Oxford-SVB Loan Agreement, the Company had the right to draw an additional $40.0 million through the end of December 2023. In December 2023, the original terms of the Oxford-SVB Loan Agreement were amended to extend the draw deadline to June 2024. The original terms of the Oxford-SVB Loan Agreement provided for an additional $50.0 million over three tranches, with $12.5 million available in each of two tranches based upon the achievement of milestones related to the development of evorpacept and one preclinical product candidate, and $25.0 million at the Oxford-SVB Lenders’ sole discretion. The Company decided not to draw down on any portion of the $40.0 million available under the Oxford-SVB Loan Agreement by the deadline of June 30, 2024 and did not achieve all of the requirements needed to gain access to each of the two tranches available upon the achievement of pre-determined development milestones by the deadline of December 31, 2024. The proceeds of the loans were permitted to be used by the Company for working capital and to fund its general business requirements. During the three months ended June 30, 2026 and 2025, interest expense incurred in connection with the Oxford-SVB Loan Agreement was $0.2 million and $0.3 million, respectively. During the six months ended June 30, 2026 and 2025, interest expense incurred in connection with the Oxford-SVB Loan Agreement was $0.5 million and $0.7 million, respectively. On June 25, 2026, all outstanding principal, interest and other amounts owed under the Oxford-SVB Loan Agreement totaling to $8.2 million were paid off as part of a refinancing in connection with entry into the HSBC Loan Agreement. HSBC Loan On June 25, 2026, the Company’s wholly-owned subsidiary, ALX Oncology Inc. (the Borrower), entered into a loan and security agreement, the HSBC Loan Agreement, with HSBC Ventures USA Inc., or HSBC, the HSBC Lender, for a secured multi-tranche term loan facility of up to $50.0 million. Pursuant to the HSBC Loan Agreement, the Borrower drew an initial loan of $10.0 million at closing, the proceeds of which were used to refinance the existing Oxford-SVB Loan Agreement and to pay closing fees and expenses. Under the HSBC Loan Agreement, subject to the satisfaction of customary conditions, the Borrower has the right to draw an additional $20.0 million through June 30, 2028. The HSBC Loan Agreement provides for an additional $20.0 million over two tranches, with $10.0 million available upon the achievement of milestones related to the clinical development of evorpacept and ALX2004 and $10.0 million at the HSBC Lender’s sole discretion. The proceeds of the loans may be used by the Borrower for general corporate purposes. The term loans mature on June 1, 2030. The term loans will amortize in equal monthly installments beginning on July 1, 2028. However, upon the occurrence of the Interest Only Extension Event (as defined in the HSBC Loan Agreement), the term loans will begin to amortize in equal monthly installments beginning on July 1, 2029. The term loans accrue interest at a floating per annum rate equal to the greater of (a) the Prime Rate (as defined in the HSBC Loan Agreement) and (b) 6.0%. Interest on the term loans is payable monthly in arrears. The term loans once repaid or prepaid may not be reborrowed. The term loans may be prepaid in full in their entirety at any time, subject to a prepayment fee. Upon the earlier of prepayment or maturity, the Company is required to pay a final payment fee of 2.0% of the original principal amount of funded term loans. The Borrower’s and the guarantors’ obligations under the HSBC Loan Agreement are secured by substantially all of the Borrower’s and the guarantors’ assets, with a negative pledge on intellectual property, and will be guaranteed by future subsidiaries of the Company, subject to certain limitations. The Borrower received net proceeds from issuance of the term loan of $9.7 million after deducting debt issuance costs of approximately $0.3 million. A portion of the net proceeds were used to refinance and pay off the existing Oxford-SVB Loan Agreement. Debt issuance costs were recorded as debt discount on the term loan, offsetting term loan, non-current on the condensed consolidated balance sheets. The debt discount will be amortized over the term of the loan as interest expense using the effective interest method. During the three months and six months ended June 30, 2026, interest expense incurred in connection with the HSBC Loan Agreement was a nominal amount. The Company determined that certain loan features were embedded derivatives requiring bifurcation and separate accounting. Those embedded derivatives were bundled together as a single, compound embedded derivative and then bifurcated and accounted for separately from the host contract. As of June 30, 2026, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. As of June 30, 2026, the Borrower and the guarantors were in compliance with all financial reporting covenants under the HSBC Loan Agreement. As of June 30, 2026, the future maturities under the HSBC Loan Agreement are as follows (in thousands):
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