Notes Payable

12 Months Ended

Dec. 31, 2020

Notes payable:

On May 23, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) with Biopharma Credit plc (“Pharmakon”), for a senior secured credit facility consisting of a term loan of $60 million (the “Term Loan”), with the ability to draw an additional $20 million within twelve months of the closing date, which the Company drew down on May 22. 2020. The Loan Agreement replaced the Company’s prior Term Loan Agreement (the “Original Loan Agreement”) with CRG Servicing LLC, ("CRG").

The Company utilized $60 million of the initial loan proceeds under the Loan Agreement, plus an additional $1.8 million to repay all of the outstanding loan balance owed by the Company under the Original Loan Agreement. The Company also used existing cash on hand to pay a $5.6 million backend facility fee to CRG. Upon the repayment of all amounts

owed by the Company under the CRG Original Loan Agreement, all commitments to CRG were terminated and all security interests granted by the Company and its subsidiary guarantors under the CRG Original Loan Agreement were released.

During the year ended December 31, 2019, the Company expensed one-time costs of $5.2 million in unamortized deferred loan fees, $3.9 million in unamortized warrant discount costs and $2.8 million in loan prepayment fees and realized losses arising out of the CRG Term Loan and recorded as interest expense in the accompanying consolidated statement of operations.

The Term Loan carries a 72-month term with interest only payments on the term loan for the first 36 months. The Term Loan will mature in May 2025 and bears an interest rate of 7.5% plus the LIBOR rate on the first day for the quarter, with a floor of 2% plus the LIBOR rate (LIBOR effective rate as of October 1, 2020 was 0.23%). The Term Loan is subject to mandatory prepayment provisions that require prepayment upon change of control.

The obligations under the Loan Agreement are guaranteed by the Company’s subsidiaries and are secured by a first priority security interest in and a lien on substantially all of the assets of the Company and the subsidiary guarantors, subject to certain exceptions.

The debt balance has been categorized within Level 2 of the fair value hierarchy. The notes payable debt balance approximates its fair value based on prevailing interest rates as of the balance sheet date.

The following table represents future maturities of the notes payable obligation as of December 31, 2020:


2021	$	—
2022	18,462
2023	24,615
2024	24,615
2025	12,308
Total maturities	$	80,000
Unamortized discount and loan costs	(1,548)
Total notes payable obligation	$	78,452