INDEBTEDNESS

12 Months Ended

Dec. 31, 2021

INDEBTEDNESS

INDEBTEDNESS

3. INDEBTEDNESS

Credit Facility

On November 19, 2021, the Company, as borrower, entered into a credit agreement (the “Credit Agreement”) with Truist Bank and other lenders, which provides for credit facilities consisting of (i) a senior secured term loan facility in an aggregate principal amount of $300.0 million (the “Term Facility”) and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $40.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “Revolving Facility,” and together with the Term Facility, the “Credit Facility”). 

The Term Facility proceeds were used to finance the cash portion of the consideration under the merger agreement between ANI and Novitium, repay our existing credit facility, and pay fees, costs and expenses incurred in connection with the merger. Proceeds of the Revolving Facility are expected to be used, subject to certain limitations, for working capital and other general corporate purposes.

The Term Facility matures in November 2027 and the Revolving Facility in November 2026. Each permits both base rate borrowings (“ABR Loans”) and Eurodollar rate borrowings (“Eurodollar Loans”), plus a spread of (a) 5.00% above the base rate in the case of ABR Loans under the Term Facility and 6.00% above the LIBOR Rate (as

defined in the Credit Agreement) in the case of LIBOR loans under the Term Facility and (b) 3.75% above the base rate in the case of ABR Loans under the Revolving Facility and 4.75% above the LIBOR Rate (as defined in the Credit Facility) in the case of loans under the Revolving Facility. The interest rate under the Term Facility was 6.75% at December 31, 2021. The Credit Facility has a subjective acceleration clause in case of a material adverse effect. The Term Facility includes a repayment schedule, pursuant to which $750 thousand of the loan will be paid in quarterly installments during the twelve months ended December 31, 2022. As of December 31, 2021, $3.0 million of the loan is recorded as current borrowings in the consolidated balance sheets. As of December 31, 2021, we have not drawn on the Revolving Facility and $40.0 million remained available for borrowing.

We incurred $14.0 million in deferred debt issuance costs associated with the Credit Facility. Costs allocated to the Term Facility are classified as a direct reduction to the current and non-current portion of the borrowings, depending on their nature. Costs allocated to the Revolving Facility are classified as other current and other non-current assets, depending on their nature. We incur a commitment fee of 0.5% per annum on any unused portion of the Revolving Facility. The Credit Facility carried a customary ticking fee that commenced after a period post-syndication and ended upon the closing of the Credit Facility. During the year ended December 31, 2021, we incurred $4.2 million in expense related to the ticking fee, all of which was recognized as other expense, net, on the consolidated statement of operations.

In connection with entry into the Credit Facility, on November 19, 2021, we terminated our existing Amended and Restated Credit Agreement, dated as of December 27, 2018 (the “Prior Credit Agreement”), among the Company, as borrower, and Citizens Bank with other lenders. In connection with the termination of the Prior Credit Agreement, on November 19, 2021, we used borrowings under the Credit Facility to prepay the full amount of indebtedness under the Prior Credit Agreement, and to pay related accrued and unpaid interest, fees, and expenses. The repayment and termination of the Prior Credit Agreement was recognized as an extinguishment. As of November 19, 2021, the carrying amount of the debt related to the Prior Credit Agreement consisted of principal of $200.1 million, net of $1.4 million in deferred financing fees, or $198.7 million. We made a reacquisition payment of $200.1 million, representing the remaining principal balance under this facility of $200.1 million plus certain legal fees, resulting in a loss on extinguishment of $1.5 million. The loss is recognized as other expense, net, on our consolidated statement of operations.

The Credit Facility is secured by a lien on substantially all of ANI Pharmaceuticals, Inc.’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets. The Credit Facility is subject to customary financial and nonfinancial covenants.

The carrying value of the current and non-current components of the Term Facility as of December 31, 2021 and Term Loan and Delayed Draw Term Loan under the Prior Credit Agreement as of December 31, 2020 are:

	Current
	December 31,		December 31,
(in thousands)	2021		2020
Current borrowing on debt	$	3,000	$	13,691
Deferred financing costs		(2,150)		(448)
Current debt, net of deferred financing costs	$	850	$	13,243

	Non-Current
	December 31,		December 31,
(in thousands)	2021		2020
Non-current borrowing on debt	$	297,000	$	165,755
Deferred financing costs		(10,480)		(812)
Non-current debt, net of deferred financing costs and current component	$	286,520	$	164,943

As of December 31, 2021, we had a $300.0 million balance on the Term Facility. Of the $1.0 million of deferred debt issuance costs allocated to the Revolving Facility, $0.8 million is included in other non-current assets

in the consolidated balance sheets and $0.2 million is included in prepaid expenses and other current assets in the consolidated balance sheets.

The contractual maturity of our Term Facility is as follows for the years ending December 31:

(in thousands)	Term Facility
2022	$	3,000
2023		3,000
2024		3,000
2025		3,000
2026		3,000
2027 and thereafter		285,000
Total	$	300,000

The following table sets forth the components of total interest expense related to the Term Facility and the Term Loan, DDTL, and Revolver under our Prior Credit Agreement recognized in our consolidated statements of operations for the year ended December 31:

		Years Ended December 31,
(in thousands)	2021		2020		2019
Contractual coupon	$	11,129	$	8,847	$	6,635
Amortization of debt discount		—		—		5,647
Amortization of finance fees		914		720		1,377
Capitalized interest		(98)		(88)		(191)
	$	11,945	$	9,479	$	13,468