Note 8 - Credit Facility and Warrants |
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| Debt Disclosure [Text Block] |
MidCap Credit Facility
On December 22, 2021, the Company entered into a Credit and Security Agreement (the “Credit Agreement” or the "Existing Credit Agreement") together with certain of its subsidiaries party thereto as borrowers, the entities party thereto as lenders, and Midcap Funding IV Trust, as administrative agent, pursuant to which, among other things, (i) the Lenders agreed to provide a year revolving credit facility in a principal amount of up to $40.0 million subject to a borrowing base consisting of, among other things, inventory and sales receivables (subject to certain reserves), and (ii) the Company agreed to issue to MidCap Funding XXVII Trust a warrant (the “Midcap Warrant”) to purchase up to an aggregate of 16,667 shares of common stock of the Company, in exchange for the Lenders extending loans and other extensions of credit to the Company under the Credit Agreement.
The obligations under the Credit Agreement are a senior secured obligation of the Company and rank senior to all indebtedness of the Company. Borrowings under the Credit Agreement bear interest at a rate of Term Secured Overnight Financing Rate ("Term SOFR"), which is defined as SOFR plus 0.10%, plus 5.50%. The Company will also be required to pay a commitment fee of 0.50% in respect of the undrawn portion of the commitments, which is generally based on average daily usage of the facility during the immediately preceding fiscal quarter. The Credit Agreement does not require any amortization payments.
The Credit Agreement minimum liquidity covenant, which includes the Company’s unrestricted U.S. cash plus the revolving loan availability, requires that Midcap shall not permit the credit party liquidity at any time to be less than (a) during the period commencing on February 1st through and including May 31st of each calendar year, $12.5 million and (b) at all other times, $15.0 million. The Credit Agreement includes events of default that are customary for these types of credit facilities, including the occurrence of a change of control.
The Midcap Warrant has an exercise price of $56.40 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, is immediately exercisable, has a term of years from the date of issuance and is exercisable on a cash or cashless basis.
On February 23, 2024, the Company amended its asset backed credit facility with MidCap Financial Trust. The Credit Agreement term was extended to December 2026 and gives the Company access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million. The Credit Agreement extension reduced the minimum liquidity financial covenant from a peak of $15.0 million to $6.8 million of U.S. cash on hand and/or availability in the Credit Agreement. The extension fee was less than $0.1 million.
On March 25, 2025 (the “Third Amendment Effective Date”) the Company entered into Amendment No. 3 (the “3rd Amendment”) to the Credit Agreement. Material changes contained in the 3rd Amendment include, among other things, adding repurchase of the Company’s common stock of up to $1.5 million per year, consisting of up to $1.5 million in repurchases allowed during the period from March 25, 2025 through December 22, 2025, and up to an additional $1.5 million allowed during the period from December 23, 2025 through the maturity date, subject to certain liquidity and compliance conditions. As of May 2, 2025, the Company had temporarily suspended its share repurchase program.
On August 29, 2025 (the “Fourth Amendment Effective Date”) the Company entered into Amendment No. 4 to the Credit Agreement. Material changes contained in Amendment No. 4 include a reduction to the Minimum Credit Party Liquidity (as defined in the Credit Agreement) covenant to $5.0 million, upon the Company’s delivery of a liquidity certificate evidencing liquidity of at least $6.8 million, the Minimum Liquidity Covenant Reduction Period (as defined in the Credit Agreement) will terminate and the covenant will increase to $6.8 million thereafter, and an Availability Reserve (as defined in the Credit Agreement) of $2.8 million during the Minimum Liquidity Covenant Reduction Period and $1.0 million thereafter.
On March 13, 2026 (the "Fifth Amendment Effective Date"), the Company and its subsidiaries entered into Amendment No. 5 to its Credit and Security Agreement with MidCap Funding IV Trust. Under the terms of the amendment, the Company’s minimum liquidity covenant was reduced from $5.0 million to $3.5 million during the Minimum Liquidity Covenant Reduction Period. This reduction period commenced on the Fifth Amendment Effective Date and is subject to extension at the Company's option on a weekly basis through May 9, 2026, provided it remains in compliance with certain fee payment obligations.
The Company is in compliance with the financial covenants contained within the Credit Agreement as of June 30, 2026.
As of June 30, 2026, there was no outstanding principal balance under the Existing Credit Agreement. As of June 30, 2026, the Company had an overpayment balance of $0.4 million due from the lender resulting from routine cash sweeps mechanics, as well as unamortized deferred financing costs of $0.1 million, both of which are included within Prepaid Expenses and Other Current Assets on the Condensed Consolidated Balance Sheet.
On July 17, 2026, in connection with the closing of the Asset Sale and the Stock Sale, all outstanding indebtedness under the Existing Credit Agreement was repaid in full and all commitments thereunder were terminated. Additionally, all guarantees and liens securing the indebtedness under the Existing Credit Agreement were fully discharged and released.
The Company’s credit facility consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):
Interest Expense, Net
Interest expense, net consisted of the following for the three and six months ended June 30, 2026 and 2025 (in thousands):
Seller Notes
As of June 30, 2026, the Company entered into a binding settlement agreement to fully discharge its outstanding Seller Notes with an aggregate carrying value of $0.3 million in exchange for a cash settlement payment of $38 thousand. Accordingly, during the three months ended June 30, 2026, the Company recognized a gain on extinguishment of debt of $0.3 million in the Condensed Consolidated Statements of Operations. The remaining $38 thousand settlement obligation was included in Seller Notes on the Condensed Consolidated Balance Sheets as of June 30, 2026, and was paid in full in July 2026.
Securities Purchase Agreement and Warrants
In March 2022, the Company raised approximately $27.5 million through a private placement involving common stock and accompanying stock purchase warrants. The 590,637 common stock warrants issued in the transaction were classified as liabilities with subsequent remeasurement each quarter. As of June 30, 2026, these warrants remain outstanding and have no associated liability recorded on the Company’s Condensed Consolidated Balance Sheet due to the decline in the Company’s share price.
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