Long-term Debt and Obligations

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-term Debt and Obligations

9. Long-term Debt and Obligations

In April 2014, the Company entered into a term loan agreement under which it may borrow up to $45.0 million, or up to an aggregate of approximately $52.0 million if the Company elects to exercise in full an option to defer payment of a portion of the interest that would accrue on the borrowing under the term loan agreement. Upon initial closing, the Company borrowed $20.0 million, the proceeds of which were primarily used to repay the outstanding balance under its former credit facility plus a related $1.0 million end of term payment, a $0.3 million make-whole premium, and interest accrued. The Company incurred and recorded a total charge to interest expense of $1.4 million related to the repayment of the former credit facility, including a loss on extinguishment of debt of $0.6 million. The Company has committed to borrow an additional $10.0 million under the term loan agreement no later than October 2014. Up to an additional $15.0 million, in increments of $5.0 million, may be borrowed under the agreement no later than May 2015, subject to a revenue requirement. All borrowings under the new term loan agreement will accrue interest at 12.5% annually, payable quarterly, of which 3.5% can be deferred during the first four years of the term at the Company’s option and paid together with the principal. The Company is required to pay only interest for the first five years of the term. Principal payments are due in four equal installments during the sixth year of the term. The Company has the option to prepay the term loans, in whole or in part, at any time subject to payment of a redemption fee of up to 4%, which declines over the term. The term loan agreement contains customary conditions to borrowings, events of default and negative covenants, including covenants that could limit the Company’s ability to, among other things, incur additional indebtedness, liens or other encumbrances, make dividends or other distributions; buy, sell or transfer assets; engage in any new line of business; and enter into certain transactions with affiliates. The new term loan agreement also includes liquidity and revenue-based financial covenants. The Company must also satisfy certain minimum annual revenue requirements, which shall initially be $40.0 million for 2014 with annual increases of $15.0 million for each subsequent fiscal year thereafter. If the Company’s actual revenues are below the minimum annual revenue requirement for any given year, the Company may avoid a related default by generating proceeds from an equity or subordinated debt issuance equal to the shortfall between its actual revenues and the minimum revenue requirement. The Company’s obligations under the new term loan agreement are collateralized by substantially all of its assets.

Borrowings, including current portion, consisted of the following (in thousands):

	June 30, 2014			December 31, 2013
Landlord payable	$	—		$	49
Capital lease		368			410
Term loans payable		20,000			18,348
		20,368			18,807
Less: Unamortized debt discount		—			(514	)
Current portion		(160	)		(6,136	)
Non-current portion	$	20,208		$	12,157

Scheduled future payments for principal obligations under outstanding debt facilities were as follows at June 30, 2014 (in thousands):

Long-term debt:
2014	$	77
2015		166
2016		120
2017		5
2018 and thereafter		20,000
	$	20,368