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Debt Obligations
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt Obligations

Note 8. Debt Obligations

Growth Term Loan

Total amortization expense for warrant, final fee and original issuance discounts in connection with the growth capital term loans under the Loan and Security Agreement dated August 22, 2014 between the Company and Oxford Finance, LLC and Silicon Valley Bank (the “Growth Term Loan”) was $0 for both the three and nine months ended September 30, 2019, and $0 and $59,969 for the three and nine months ended September 30, 2018, respectively. Deferred financing cost amortization expense relating to the Growth Term Loan was $0 for both the three and nine months ended September 30, 2019 and $0 and $2,982 for the three and nine months ended September 30, 2018, respectively. The amortization expense is included in interest expense in the accompanying condensed consolidated statements of operations. The Company recorded no discounts associated with the Growth Term Loan in the accompanying condensed consolidated balance sheets as of both September 30, 2019 and December 31, 2018.

 

Extinguishment of Growth Term Loan upon MidCap Credit Facility Closing

In March 2018, the Company repaid all principal and interest amounts outstanding under the Growth Term Loan in an aggregate amount equal to approximately $4.3 million, including collateral agent legal fees and prepayment fees. The repayment was funded with net proceeds from the MidCap Credit Facility (see description of the MidCap Credit Facility below). As a result of the repayment, the Company recorded a loss on extinguishment of the Growth Term Loan of $0 for the three months ended September 30, 2018 and $105,064, including remaining unamortized discounts of $67,272 and prepayment and other Growth Term Loan lender fees, in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2018. All obligations under the Growth Term Loan were terminated upon extinguishment of the Growth Term Loan.

 

MidCap Credit Facility

On March 26, 2018 (the “MidCap Closing Date”), the Company entered into a Credit and Security Agreement (Term Loan) (the “MidCap Term Loan”) and a Credit and Security Agreement (Revolving Loan) (the “MidCap Revolving Loan” and together with the MidCap Term Loan, the “MidCap Credit Facility”) with MidCap Financial Trust, as agent. MidCap Financial Trust subsequently assigned its rights and obligations as agent to MidCap Funding IV Trust.

 

There have been no significant modifications to terms and conditions of the MidCap Credit Facility since the disclosures made in the Company’s Annual Report on Form 10-K, filed with the SEC on March 7, 2019. The remaining principal repayments due under the MidCap Term Loan as of September 30, 2019 are as follows for each fiscal year:

 

2019

 

$

 

2020

 

 

1,750,000

 

2021

 

 

2,333,333

 

2022

 

 

2,333,333

 

2023

 

 

583,334

 

Total MidCap Term Loan payments

 

 

7,000,000

 

Less discount and deferred financing costs

 

 

(493,923

)

Plus final fee premium

 

 

315,000

 

Total MidCap Term Loan, net

 

$

6,821,077

 

 

The Company recognized approximately $493,923 and $610,359 of debt discount associated with the MidCap Term Loan, resulting from fees and debt issuance costs, in MidCap Term Loan payable – non current, net of discount and debt issuance costs in the accompanying condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively. Costs incurred in connection with the issuance of the Midcap Revolving Loan of $55,028 and $67,068 are presented as MidCap Revolving Loan costs in other non-current assets in the accompanying condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively.

 

Amortization of the debt discount associated with the MidCap Term Loan was approximately $43,321 and $116,435 for the three and nine months ended September 30, 2019, respectively, compared to $39,910 and $83,766 for the three and nine months ended September 30, 2018, respectively. Amortization of deferred MidCap Revolving Loan costs was $4,058 and $12,040 for the three and nine months ended September 30, 2019, respectively, compared to $4,058 and $8,294 for the three and nine months ended September 30, 2018, respectively. Amortization of both the debt discount and the revolving loan costs is included in interest expense in the accompanying condensed consolidated statements of operations.

 

QNAH Convertible Note Agreement

In October 2017, the Company issued a subordinated convertible promissory note to QNAH in the principal amount of $3.0 million against receipt of cash proceeds equal to such principal amount. There have been no significant modifications or financial events relating to QNAH Convertible Note since disclosures made by the Company in its Annual Report on Form 10-K, filed with the SEC on March 7, 2019.