INDEBTEDNESS

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

INDEBTEDNESS

INDEBTEDNESS

Credit Facility

On November 19, 2021, the Company completed its acquisition (the “Acquisition”) of Novitium pursuant to the terms of the Agreement and Plan of Merger, dated as of March 8, 2021 (the “Merger Agreement”), by and among the Company, Novitium, Nile Merger Sub LLC, a Delaware limited liability company, and certain other parties, with Novitium becoming a wholly owned subsidiary of ANI.

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, repay our existing credit facility, and pay fees, costs and expenses incurred in connection with the merger.

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 Agreement) in the case of loans under the Revolving Facility. The interest rate under the Term Facility was 11.15% at June 30, 2023. 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 June 30, 2024. As of June 30, 2023, $3.0 million of the loan is recorded as current borrowings in the unaudited interim condensed consolidated balance sheets. As of June 30, 2023, we had not drawn on the Revolving Facility and $40.0 million remained available for borrowing subject to certain conditions.

In July 2023, the Company’s debt instruments that referenced LIBOR were amended to replace the benchmark rate with the Secured Overnight Financing Rate (“SOFR”) in anticipation of the termination of published LIBOR rates.

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 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 June 30, 2023 and December 31, 2022 are:

	Current
(in thousands)	June 30, 2023		December 31, 2022
Current borrowing on debt	$	3,000	$	3,000
Deferred financing costs	(2,150)		(2,150)
Current debt, net of deferred financing costs	$	850	$	850

	Non-Current
(in thousands)	June 30, 2023		December 31, 2022
Non-current borrowing on debt	$	292,500	$	294,000
Deferred financing costs	(7,256)		(8,331)
Non-current debt, net of deferred financing costs and current component	$	285,244	$	285,669

As of June 30, 2023, we had a $295.5 million balance on the Term Facility. Of the $0.7 million of unamortized deferred debt issuance costs allocated to the Revolving Facility, $0.5 million is included in other non-current assets in the unaudited interim condensed consolidated balance sheets, and $0.2 million is included in prepaid expenses and other current assets in the unaudited interim condensed consolidated balance sheets.

The contractual maturity of our Term Facility is as follows for the period ending:

(in thousands)	Term Facility
2023 (remainder of the year)	$	1,500
2024	3,000
2025	3,000
2026	3,000
2027	285,000
Total	$	295,500

The following table sets forth the components of total interest expense related to the Term Facility during the three and six months ended June 30, 2023 and 2022, as recognized in the accompanying unaudited interim condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended				Six Months Ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Contractual coupon	$	7,620	$	6,122	$	14,970	$	12,180
Amortization of finance fees	591		590		1,182		1,181
Capitalized interest	(277)		(19)		(298)		(49)
	$	7,934	$	6,693	$	15,854	$	13,312