Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

7.Debt

Term Loan and Revolving Loan

On March 30, 2022 (the “Effective Date”), the Company entered into a Third Amendment (the “Third Amendment”) to the Term Loan Agreement, with certain of the Company’s wholly owned subsidiaries, the lenders party thereto and MidCap, in order to provide the Company an additional tranche of funding and allow the Company to draw the fourth tranche. The Third Amendment provided that the fourth tranche of $5,000,000 was to be drawn on March 31, 2022. Additionally, the Third Amendment provides the Company with a sixth tranche pursuant to which the Company may draw $9,000,000 any time after January 1, 2023 until March 31, 2023. The Third Amendment also eliminated the minimum unrestricted cash requirement and reset the minimum Net Revenue (as defined therein) requirements based on the Company’s 12-month trailing Net Revenue. Finally, the Third Amendment increased the prepayment fee by 0.5% until following the third anniversary of the Effective Date, at which point no prepayment fee shall apply.

As of June 30, 2022, there was $21.0 million of outstanding principal and $0.3 million of an exit fee payable related to the term loans, reduced by unamortized debt issuance costs of $0.8 million included in "Current portion of long-term debt" and $0.3 million included in “Long-term debt” on the condensed consolidated balance sheets.

Also on March 30, 2022, the Company entered into a Sixth Amendment (the “Sixth Amendment”) to the Revolving Loan Agreement, with certain of the Company’s wholly owned subsidiaries, the lenders party thereto and MidCap. The Sixth Amendment modified the Net Revenue (as defined therein) requirement in a manner consistent with the modification under the Restated Term Loan Agreement. In addition, the Sixth Amendment made other conforming changes to the Restated Term Loan Agreement.

As of June 30, 2022, there were $2.4 million outstanding under the Revolving Loan. As of June 30, 2022, the unamortized debt issuance costs related to the revolving loan was approximately $37,000 and was included in “Other assets” on the condensed consolidated balance sheets.

The amortization of debt issuance costs on the term loan and the revolving loan for both the three months ended June 30, 2022 and 2021 were $0.1 million and was included in interest expense in the condensed consolidated statements of operations. The amortization of debt issuance costs on the term loan and the revolving loan for both the six months ended June 30, 2022 and 2021 were $0.3 million and was included in interest expense in the condensed consolidated statements of operations.

The Term Loan and Revolving Loan Agreements include customary affirmative and restrictive covenants and representations and warranties, including a financial covenant for minimum revenues, a financial covenant for minimum cash requirements, a covenant against the occurrence of a “change in control,” financial reporting obligations, and certain limitations on indebtedness, liens, investments, distributions, collateral, mergers or acquisitions, taxes, and deposit accounts. Upon the occurrence of an event of default, a default interest rate of an additional 5.0% may be applied to any outstanding principal balances, and MidCap may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Credit Agreements. The Company’s obligations under the Credit Agreements are secured by a security interest in substantially all of the Company’s assets.

Convertible Note

As of June 30, 2022, there was $60.0 million of outstanding principal, reduced by unamortized debt discount and issuance costs of $10.9 million related to the convertible note included in “Long-term debt” on the condensed consolidated balance sheet. The Company amortizes the debt discount and debt issuance costs under the effective interest method over the term of the Note, at a resulting effective interest rate of approximately 12%. For the three months ended June 30, 2022 and 2021, the amortization of the convertible debt discount and issuance costs were $0.8 million and $0.7 million, respectively. For the six months ended June 30, 2022 and 2021, the amortization of the convertible debt discount and issuance costs were $1.6 million and $1.4 million, respectively. Both were included in interest expense in the condensed consolidated statements of operations.

Future Principal Payments of Debt

The future schedule of principal payments for all outstanding debt as of June 30, 2022 was as follows (in thousands):

Fiscal Year
2022	$	2,401
2023		14,000
2024		7,000
2025		60,000
Total	$	83,401