Long Term Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long Term Debt | 9. Long-Term Debt In June 2026, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Hercules Capital, Inc., providing for up to $200.0 million in term loan borrowings. At the closing on June 24, 2026, the Company had access to a $50.0 million tranche, of which it borrowed $20.0 million. The remaining $30.0 million is available, at the Company's option, through June 15, 2027. The Company may draw up to an additional $100.0 million in three separate tranches upon achievement of certain clinical, regulatory, financing and capitalization milestones. As of June 30, 2026, the Company had not met the requirements to access the funds under these tranches, as it had not achieved the related milestone. An additional fifth tranche of $50.0 million may be made available upon the Company's request and at Hercules’ sole discretion and is not contingent upon the Company’s achievement of the milestones applicable to the prior tranches. The Loan and Security Agreement matures on June 1, 2031. The initial borrowing of $20.0 million bears interest at a floating rate equal to the greater of (i) the plus 2.0% and (ii) 8.75%, and all future borrowings, including the available balance of $30.0 million of the $50.0 million tranche available as of June 24, 2026, bear interest at a floating rate equal to the greater of (i) the prime rate plus 2.5% and (ii) 9.25%. The floating interest rate is capped at 0.75% more than the interest rate at the time of the borrowing. The Company is required to make monthly interest-only payments for borrowings under the initial tranche of $50.0 million for a period of 29 months, which may be extended by up to an additional 30 months upon achievement of certain clinical, regulatory, financing and capitalization milestones. The Loan and Security Agreement includes an end-of-term charge ranging from 3.70% to 6.50% of the aggregate principal amount, depending on the timing of the repayment. The recognition of the end-of-term charge is reflected as interest expense over the term of the borrowing using the effective interest rate method. The Company may voluntarily prepay outstanding borrowings, subject to prepayment premiums ranging from 1.0% to 3.0% of the principal amount prepaid, depending on the timing of repayment. In connection with the Loan and Security Agreement, the Company paid a $0.5 million facility fee for the $50.0 million tranche and is subject to a 1.00% facility fee for subsequent borrowings. Because the facility fee relates to the total $50.0 million initial tranche, the Company allocated the costs among the two initial borrowing tranches based on the relative borrowing capacity available under each tranche. In addition to the initial facility fee, the Company incurred approximately $2.1 million of debt issuance costs, consisting primarily of lender fees and third-party legal and other transaction costs. Because the debt issuance costs relate to the $150.0 million for the first four tranches of the Loan and Security Agreement, the Company allocated the costs among the various borrowing tranches based on the relative borrowing capacity available under each tranche. Facility fees and debt issuance costs attributable to funded borrowings were recorded as a reduction to the carrying value of the debt and are being amortized to interest expense using the effective interest method over the expected term of the borrowing. Facility fees and debt issuance costs attributable to unfunded borrowing commitments were capitalized to prepaid and other current assets or other non-current assets according to the access period or classification of the underlying debt, as appropriate, and are being amortized to interest expense over the applicable commitment periods or will be reclassified as debt upon funding of the related borrowings. The Loan and Security Agreement contains financial covenants, including minimum cash and performance-based covenants, that are not yet subject to testing or effective as of June 30, 2026. Upon the occurrence of certain events and beginning no earlier than January 1, 2028, the Company may become subject to minimum cash and performance-based financial covenants. The Loan and Security Agreement contains customary events of default, including failure to make required payments or maintain compliance with covenants, breach, default, insolvency, attachment or judgment events and any circumstance which could reasonably be expected to have a material adverse effect on the Company. The Loan and Security Agreement also contains customary affirmative and restrictive covenants, representations and warranties associated with a secured loan facility, including certain limitations on indebtedness, liens, investments, distributions, mergers or acquisitions and corporate changes. As of June 30, 2026, the outstanding principal under the Loan and Security Agreement was $20.0 million, bearing interest at a rate of 8.75% per annum, with an effective interest rate of 10.64%. The future principal payments due under the Loan and Security Agreement as of June 30, 2026 were as follows (in thousands):
As of June 30, 2026, the carrying value of the Loan and Security Agreement was as follows (in thousands):
As of June 30, 2026, debt issuance costs and debt discount of approximately $2.2 million were included in prepaid expenses and other current assets and in other non-current assets on the condensed balance sheet, as appropriate. As of June 30, 2026, approximately $1.9 million of unpaid debt issuance costs were included in accounts payable on the condensed balance sheet. For the three and six months ended June 30, 2026, the Company recognized an immaterial amount of interest expense for borrowings under the Loan and Security Agreement. The Loan and Security Agreement is secured by a first-priority security interest in substantially all of the Company’s assets, including intellectual property, subject to customary exclusions. |