Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Second Amendment and Restatement of Hercules Loan Agreement

As further disclosed in Note 7, on January 6, 2023, the Company entered the Second A&R Loan Agreement with Hercules, which provides for a term loan of $32.5 million. The Second A&R Loan Agreement amended and restated the previous loan and security agreement, as amended. The Second A&R Loan Agreement does not require any scheduled amortization payments prior to October 1, 2024; provided however, if certain conditions are met, then amortization payments will not be required until January 1, 2026. The entire principal balance and all accrued but unpaid interest shall be due on the maturity date, which is April 1, 2026; provided however, if certain conditions are met, the maturity date will be extended to July 1, 2027. Borrowings bear interest at a per annum rate equal to the greater of (i) 3.15% plus The Wall Street Journal prime rate or (ii) 10.15%. Interest payments are due on a monthly basis. In an event of default and until such event is no longer continuing, the interest rate applicable to borrowings under the Second A&R Loan Agreement would be increased by 4.00%. Please see Note 7 for further disclosures related to the Second A&R Loan Agreement with Hercules.

Borrowings under the Second A&R Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets except for their intellectual property (but including rights to payment and proceeds from the sale, licensing or disposition of the intellectual property). Under the Second A&R Loan Agreement, the Borrowers have agreed to affirmative and negative covenants to which the Company will remain subject until maturity or repayment in full. Such covenants include maintaining a minimum liquidity amount of cash and cash equivalents in an aggregate amount greater than or equal to $20.0 million or, on and after certain conditions have been met, cash and cash equivalents in an aggregate amount greater than or equal to $10.0 million. The Company’s obligations under the Second A&R Loan Agreement are subject to acceleration upon occurrence of specified events of default, including payment default, insolvency and a material adverse change in the Company’s business, operations or financial or other condition. In addition, under the Second A&R Loan Agreement, Hercules has the right to participate, in a cumulative amount of up to $1.0 million in the aggregate, and subject to exceptions as provided in the Second A&R Loan Agreement, in any future offering of the Company’s equity securities for cash that is solely for financing purposes and is broadly marketed to multiple investors.