Debt |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | 2024 VLSA Term Loan In consideration of the 2024 principal loan repayment schedule and future operating cash flow requirements, effective February 6, 2024, the Company executed a Venture Loan and Security Agreement (“VLSA”) with Horizon Technology Finance Corporation (“Horizon”) as a lender and the collateral agent and Silicon Valley Bank (“SVB”) as a lender (collectively, the “Lenders”). Upon execution of the VLSA, the Company drew down the entire first tranche of $20.0 million in principal (“VLSA Term Loan”), including $6.0 million from SVB (“SVB Loan”) and $14.0 million from Horizon (“Horizon Loan”). Subject to the VLSA terms, the Company was entitled to receive up to $30.0 million (“Outstanding Commitment”) in three additional tranches of $10.0 million each. On June 30, 2026, the first $10.0 million tranche expired and the Company did not draw down on the first tranche. $20.0 million remained available as of June 30, 2026. Each lender’s obligation to lend its undisbursed portion of the Outstanding Commitment to the Company would have terminated if, in such Lender’s sole good faith discretion, there was a material adverse change in the results of operations or financial condition of the Company, whether or not arising from transactions in the ordinary course of business, or there had been any material adverse deviation by the Company from the business plan of the Company presented to any Lender. No material adverse changes were identified through the termination of the VLSA. The VLSA Term Loan was payable to the Lenders in twelve equal monthly installments between April 1, 2028 (“Amortization Date”) and March 1, 2029 (“Maturity Date”) subject to certain prepayment fees in accordance with the VLSA. The SVB Loan carried a variable per annum interest rate at the Prime Rate (as published in the Wall Street Journal), subject to the floor of 6.00%. The Horizon Loan carried a variable per annum interest rate at the Prime Rate plus 2.75%, subject to the floor of 9.25%. Collateral for the VLSA consisted of a security interest in all assets of the Company, excluding intellectual property. On August 5, 2026, the Company entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement”) with MidCap Funding IV Trust, as agent, MidCap Financial Trust, as term loan servicer, and the lenders party thereto (collectively, “MidCap”). Concurrently with entering into the Credit Agreement, the Company repaid in full and terminated its VLSA with the Lenders, under which $20.0 million of term loans were outstanding. The aggregate payoff of $21.4 million (excluding accrued interest) comprised of the $20.0 million principal balance, a $0.8 million end-of-term fee, and a $0.6 million prepayment fee. The Company recognized a loss on extinguishment of debt of $1.5 million in the three months ended September 30, 2026, consisting of the prepayment and end-of-term fees paid (net of amounts previously accreted) and the write-off of unamortized debt discounts and deferred financing costs associated with the VLSA. The loss is presented within Other income (expense), net, in the condensed statements of operations. Senior Revolving Facility In February 2024, the Company also executed a Loan and Security Agreement (“LSA”) with SVB to receive a senior revolving line of credit of up to $10.0 million (“Revolving Facility”). The Revolving Facility matured on February 6, 2026. No borrowings were made under the Revolving Facility, and the Revolving Facility is no longer available for borrowing. MidCap Credit Facility The Credit Agreement provides for (i) a term loan facility, consisting of a $30.0 million commitment available to draw at the Company’s request at any time before December 31, 2028 in minimum increments of $5.0 million (“Term Loan Tranche 1”) and an additional $25.0 million of uncommitted capital that may be available at MidCap's discretion, and (ii) a revolving loan facility in an aggregate principal amount of up to $20.0 million, which may be increased to up to $30.0 million at the Company’s discretion upon satisfaction of certain conditions set forth therein (the “MidCap Revolving Facility”). The $20.0 million revolving credit facility operates on a non-formula basis through December 31, 2027, (or earlier upon an event of default), after which time, availability under the facility will be subject to a borrowing base based on eligible accounts receivable and inventory. All loans under the Credit Agreement mature on August 5, 2031. The MidCap Revolving Facility bears interest at Term (subject to a 1.00% floor) plus 3.75% per annum, and term loans bear interest at Term (subject to 1.00% floor) plus 5.00% per annum, in each case payable monthly in arrears. The Company also pays a facility fee of 0.50% per annum on the revolving loan commitment, payable monthly, and a quarterly minimum balance fee equal to the shortfall, if any, between interest actually earned by the lenders on revolving loans and interest computed on 25% of the revolving loan commitment. If the Company terminates or permanently reduces the revolving commitment, or prepays term loans, before the third anniversary of closing, exit fees of 3.0%, 2.0%, or 1.0% of the amount terminated, reduced, or prepaid apply in years one, two, and three, respectively; no such fees apply thereafter or upon repayment at maturity, and none have been accrued because early termination is not considered probable. The Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s assets, including its intellectual property. The Credit Agreement contains affirmative, negative, and financial covenants. The financial covenants are tested only while outstanding term loans plus the revolving loan commitment exceed $35.0 million. Because no term loans were outstanding as of September 30, 2026, the Company was not in a financial covenant testing period. The Company was in compliance with all covenants under the Credit Agreement as of September 30, 2026. The Company incurred $0.5 million of costs in connection with the Credit Agreement, of which $0.2 million was allocated to the MidCap Revolving Facility to be recognized as interest expense through the maturity date, and $0.3 million was allocated to the Term Loan Tranche 1 commitment to be recognized as interest expense through the end of its availability period on December 31, 2028, subject to reclassification upon any draw. As of September 30, 2026, unamortized deferred financing costs were recorded as assets, of which $0.1 million was included in prepaid expenses and other current assets and $0.4 million in other non-current assets on the condensed balance sheets. At closing, the Company borrowed $20.0 million under the MidCap Revolving Facility, the proceeds of which, together with cash on hand, were used to repay the VLSA. Future borrowings will be used for working capital and general corporate purposes. As of September 30, 2026, $20.0 million of revolving loans were outstanding, and no term loans had been drawn. The revolving loans are classified as long-term based on the August 2031 maturity. On August 18, 2026, the Company repaid $20.0 million on the MidCap Revolving Facility. On September 21, 2026, $20.0 million was again drawn by the Company under the MidCap Revolving Facility. The $20.0 million was repaid on October 7, 2026. Notes payable consists of the following (in thousands):
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