Convertible Note and Long-Term Debt |
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Note and Long-Term Debt |
Note 8 – Convertible Note and Long-Term Debt
On July 16, 2021 (the “Effective Date”), the Company entered into a loan facility (the “Kreos Loan Agreement”) with Kreos Capital VI (Expert Fund) LP (the “Lender”). Under the Kreos Loan Agreement, the Lender will provide the Company with access to term loans in an aggregate principal amount of up to $12,000 (the “Loan”) in three tranches as follows: (a) on the Effective Date, a loan in the aggregate principal amount of $4,000 (the “Convertible Note”, or “Tranche A”), (b) on the Effective Date, a loan in the aggregate principal amount of $5,000 (“Tranche B”), and (c) available until December 31, 2021, a loan in the aggregate principal amount of $3,000 (“Tranche C”, together with Tranche B, the “Long-term Debt”). The Kreos Loan Agreement contains customary representations and warranties, indemnification provisions in favor of the Lender, events of default and affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to, among other things, incur additional indebtedness, merge or consolidate, make acquisitions, pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter into certain transactions with affiliates, in each case subject to certain exceptions. Outstanding borrowings under the Loan are secured by a first priority security interest on substantially all of the personal property assets of the Company, including the Company’s material intellectual property and equity interests in its subsidiaries. There are no liquidity or financial covenants.
The Convertible Note and Tranche B were funded on the Effective Date. As of December 31, 2021, the Company drew down the full $3,000 aggregate principal amount of Tranche C. The Convertible Note was settled in December 2023, concurrent with the Company closing on a public offering of equity securities, in exchange for shares of the Company’s common stock or pre-funded warrants to purchase the Company’s common stock and additional warrants to purchase the Company’s common stock. The Company has made aggregate payments on the Long-term Debt of $5,743 through the quarter ended March 31, 2024, of which $5,681 represented the payment of outstanding principal and $62 represented payments applied to the 1.75% end of loan payment.
The Tranche B loan initially required interest only monthly payments commencing on the Effective Date until September 30, 2022, and, thereafter, thirty-three monthly payments of principal and interest accrued thereon until June 1, 2025, as well as the payment of an end of loan payment of 1.75% of principal drawn. The Tranche C loan initially required interest only monthly payments commencing on the date of the draw down until September 30, 2022, and, thereafter, thirty-two monthly payments of principal and interest accrued thereon until June 1, 2025, as well as the payment of an end of loan payment of 1.75% of principal drawn. As part of the First Amendment to the Kreos Loan Agreement, the Company will make interest only monthly payments for six months, at the stated 9.5% cash interest rate, beginning with the January 1, 2024, payment date and ending with the June 1, 2024, payment date. Thereafter, the Company will make monthly payments of principal and interest accrued thereon through the June 1, 2025, maturity date.
Upon the initial funding of the Tranche B and C Loans, the Lender retained the final payments of principal and interest due on June 1, 2025, totaling $274, of which $197 remains unapplied and was recorded in prepaid expense and other current assets at March 31, 2024.
For the three months ended March 31, 2024 and 2023, interest expense for the Loan was as follows:
Future principal payments under the Long-term Debt as of March 31, 2024 are as follows:
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