Note 7 - Loan Payable

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Long-Term Debt [Text Block]

NOTE 7 - LOAN PAYABLE 

On  March 31, 2023, the Company entered into a First Amendment to the Amended Loan Agreement (the First Amendment) with Hercules. The First Amendment amended the terms of the Amended and Restated Loan and Security Agreement (Amended Loan Agreement) with Hercules that closed on  December 30, 2021.

On  August 2, 2024 (the New Closing Date), the Company entered into a term loan facility of $250 million (the Initial Term Loan) with Blue Owl Capital Corporation, as administrative agent (the Administrative Agent), HealthCare Royalty and Blue Owl Capital under the Financing Agreement (as defined below). The Company repaid all outstanding principal and accrued interest and fees under the First Amendment with Hercules (such repayment, the Refinancing), which Refinancing was funded with the proceeds of the Initial Term Loan.  The existing Amended Loan Agreement with Hercules was effectively terminated, and all guarantees and liens granted thereunder were released upon the consummation of the Refinancing.

The Initial Term Loan is governed by a financing agreement, dated as of the New Closing Date (the Financing Agreement), which provides for (i) a single draw of the Initial Term Loan on the New Closing Date and (ii) an uncommitted additional facility in an aggregate principal amount of up to $100 million. The Initial Term Loan will mature on  August 2, 2029 (the Term Loan Maturity Date). The Initial Term Loan accrues interest at a per annum rate of interest equal to an applicable margin plus, at the Company’s option, either (a) at a base rate determined by reference to the highest of (1) the prime rate published by the Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) Term SOFR, plus 1.00% or (b) Term SOFR, which, shall be no less than 1.00%. The applicable margin for borrowings of the Initial Term Loan is determined on a quarterly basis by reference to a pricing grid based on the achievement of US Net Sales (as defined in the Financing Agreement) for the most recently completed four consecutive fiscal quarters of the Company and its Subsidiaries (as defined in the Financing Agreement). The pricing grid commences at 5.50% for SOFR borrowings and 4.50% for base rate borrowings and is subject to a 25 basis point step-down upon achievement of a specified US Net Sales threshold. The Initial Term Loan requires scheduled quarterly amortization payments, commencing with the fiscal quarter ending  June 30, 2028, in an amount equal to $12.5 million, with the balance due and payable on the Term Loan Maturity Date; provided that such amortization payments  may be deferred to the Term Loan Maturity Date upon the achievement of a Total Net Leverage Ratio (as defined in the Financing Agreement) that is less than or equal to an agreed threshold.

The Initial Term Loan is secured by a lien on substantially all of the assets of the Company and certain subsidiaries of the Company as guarantors and contains customary covenants and representations. The events of default under the Financing Agreement are customary for financings of this type. If an event of default occurs, the Administrative Agent is entitled to take enforcement action, including acceleration of amounts due under the Financing Agreement. The Company capitalized third party fees from the Initial Term Loan to debt issuance costs and capitalized the facility fee incurred with the Administrative Agent as part of the Initial Term Loan to debt discount.

The Company incurred total financing and upfront costs of $6.0 million related to the Initial Term Loan which are recorded as debt issuance costs and debt discount costs and as an offset to loan payable on the Company’s consolidated balance sheet. The debt issuance and debt discount costs are being amortized over the term of the debt using the straight-line method, which approximates the effective interest method, and will be included in interest expense in the Company’s consolidated statements of operations. Amortization of debt issuance and debt discount costs was $0.3 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, the remaining unamortized balance of debt issuance and discount costs was $5.3 million.

The loan payable balance of the Initial Term Loan as of March 31, 2025, is as follows:

	The Initial Term Loan			The Initial Term Loan
	March 31,			December 31,
(in thousands)	2025			2024
Loan payable	$	250,000		$	250,000
Add: Accreted Liability of final payment fee		—			—
		250,000			250,000
Less: unamortized debt issuance and debt discount costs		(5,267	)		(5,571	)
		244,733			244,429
Less: principal payments		—			—
Total loan payable		244,733			244,429
Less: current portion		—			—
Loan payable non-current	$	244,733		$	244,429