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Long-Term Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt LONG-TERM DEBT
Long-term debt consisted of the following:
(in thousands)December 31,
2022		December 31,
2021
Principal amount of long-term debt$32,500 $32,500 
Debt (discount) premium, net of accretion(196)277 
Cumulative accrual of end of term payments1,315 1,157 
Long-term debt33,619 33,934 
Less: current portion of long-term debt(1,315)(795)
Long-term debt, net of current portion$32,304 $33,139 
Hercules Loan Agreement, As Amended-— In October 2018, the Company entered into a Loan and Security Agreement (the “Hercules Loan Agreement”), as subsequently amended from time to time with Hercules, under which the Company has borrowed an aggregate of $32.5 million of term loans to date. The Hercules Loan Agreement provided for maximum borrowings of up to $50.0 million, which included, subject to Hercules investment committee’s sole discretion, a right of the Company to request that Hercules make additional term loan advances in an aggregate amount of up to $17.5 million through December 31,
2022. Borrowings under the Hercules Loan Agreement accrued interest at a variable rate equal to the greater of (i) 8.75%, or (ii) The Wall Street Journal prime rate plus 3.75%.  In an event of default, and until such event is no longer continuing, the interest rate applicable to borrowings would be increased by 4.0%. The Company concluded that each of the amendments completed during the year ended December 31, 2022 represented a modification to the debt as opposed to an extinguishment. Accordingly, fees paid to third parties directly related to the amended debt were expensed as incurred and fees paid to Hercules in conjunction with the amendment were deferred and are being amortized to interest expense over the life of the debt arrangement using the effective interest method.
Pursuant to the Hercules Loan Agreement, effective as of September 1, 2022, the Company was required to maintain cash in an account or accounts in which Hercules has a first priority security interest, in an aggregate amount greater than $30.0 million. Following the Company’s achievement of an operational performance milestone, as defined in the Hercules Loan Agreement, the required level was reduced to $20.0 million; and provided further, that subject to the Company’s filing of a NDA for mavorixafor for the treatment of WHIM syndrome, this covenant would be extinguished. As of December 31, 2022, borrowings under the Hercules Loan Agreement were repayable in monthly interest-only payments through July 1, 2023, and in equal monthly payments of principal and accrued interest from August 1, 2023 until the maturity date of the loan, which was July 1, 2024.
The Company recognized interest expense under the Hercules Loan Agreement as follows:

(in thousands)For the years ended
202220212020
Total interest expense$3,989 $3,642 $2,686 
Non-cash interest expense$918 $756 $531 


The annual effective interest rate on the Hercules Loan Agreement as of December 31, 2022 was 13.5%. There were no principal payments due or paid under the Hercules Loan Agreement during the year ended December 31, 2022. An end-of-term payment of $0.8 million was paid during the year ended December 31, 2022 in accordance with the Hercules Loan Agreement.
As of December 31, 2022, future principal payments and accrued end-of-term payments due under the Hercules Loan Agreement were as follows (in thousands):
Year Ending December 31Total
2023$14,037 
202419,779 
Long-term debt, including end-of-term payments$33,816 
As of December 31, 2022, the Company had the intent and ability to refinance the short-term principal obligations of the Hercules Loan Agreement to long-term, as demonstrated by entering into the Second Amended and Restated Loan and Security Agreement on January 6, 2023 as noted below. Therefore, short-term debt on the December 31, 2022 consolidated balance sheet includes only the accrued portion of certain end-of-term payments due within one year of the consolidated balance sheet date that remained due within one year of the consolidated balance sheet date following the January 6, 2023 refinancing.
Second Amended and Restated Loan and Security Agreement-— On January 6, 2023, the Company entered into a Second Amended and Restated Loan and Security Agreement (the “Second A&R Loan Agreement”), which amended and restated all previous loan and security agreements with Hercules. The Second A&R Loan Agreement provides for maximum borrowings of up to $32.5 million. Borrowings under the Second A&R Loan Agreement accrue interest at a variable rate equal to the greater of (i) 10.15%, or (ii) The Wall Street Journal prime rate plus 3.15%. In an event of default, and until such event is no longer continuing, the interest rate applicable to borrowings would be increased by 4.0%.
Borrowings under the Second A&R Loan Agreement are repayable in monthly interest-only payments through September 2024, and in equal monthly payments of principal and accrued interest from October 1, 2024 until the maturity date of the loan on April 1, 2026; provided however, if certain conditions are met and the Company achieves certain operational and financial milestones,
the maturity date will be extended to July 1, 2027. Under the Second A&R Loan Agreement, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment premium of up to 3.0% of the principal amount outstanding as of the date of repayment.
Under the Second A&R Loan Agreement, the Company has agreed to affirmative and negative covenants. Pursuant to the Second A&R Loan Agreement, the Company is required to maintain cash in an account or accounts in which Hercules has a first priority security interest, in an aggregate amount greater than $20.0 million. Upon the FDA approval of the sale and marketing of mavorixafor for the treatment to patients with WHIM syndrome with a label claim that is generally consistent with that sought in the Company’s NDA filing, the required level shall be reduced to $10.0 million. A breach of any of the covenants under the Second A&R Loan Agreement could result in a default under the loan. Upon the occurrence of an event of default under the loan facility with Hercules, the lender could elect to declare all amounts outstanding, if any, to be immediately due and payable and terminate all commitments to extend further credit. If there are any amounts outstanding that the Company is unable to repay, the lenders could proceed against the collateral granted to them to secure such indebtedness.
Borrowings under the Second A&R Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets except for its intellectual property (but including rights to payment an proceeds from the sale, licensing or disposition of the intellectual property). The Second A&R Loan Agreement restricts the Company’s ability to incur additional indebtedness, pay dividends, encumber its intellectual property, or engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses, with certain exceptions.
Under the Hercules Loan Agreement, the Company was required to pay “end-of-term” payments of $1.3 million and $0.8 million payable on July 1, 2023 and July 1, 2024, respectively. In connection with entering into the Second A&R Loan Agreement on January 6, 2023, the end-of-term payment of $1.3 million was paid and the due date of the $0.8 million end-of-term payment was accelerated to July 1, 2023. The Second A&R Loan Agreement added an additional end-of-term payment of $1.3 million that is due on April 1, 2026. These end-of-term payments are accelerated upon the prepayment of the borrowings upon the Company’s election on upon default of the loan.

As of January 6, 2023, future principal payments due under the Second A&R Loan Agreement are as follows (in thousands):
Year Ending December 31Total
2023$— 
20245,070 
202521,646 
20265,784 
Long-term debt$32,500