Note 10 - Loans Payable

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

10.

Loans payable

In

June 2013,

in conjunction with the lease for approximately

14,500

square feet of office space in Marlborough, Massachusetts, the Company received a payment of

$582,000

from the landlord, representing approximately

80%

of the cost to build-out the facility. In accordance with ASC

840,

Leases

, this reimbursement was recorded as a liability in loans payable and was being amortized over the life of the lease. At

January 1, 2019,

in conjunction with the adoption of ASC

842,

the remaining balance of this loan of

$159,000

was eliminated and reflected in the right-of-use asset for the Marlborough facility.

On

October 4, 2016,

the Company entered into an agreement with MidCap Financial Trust, or the MidCap agreement, that provided it with

$40

million in debt financing, comprised of both a term loan and a revolving line of credit. The MidCap agreement provided the Company with a term loan of

$30

million, which matured

five

years from closing. The term loan accrued interest at a rate of LIBOR plus

7.60%

with interest only payments for the

first

24

months, with the ability to extend to

48

months subject to certain conditions, before the loan began to amortize. The MidCap agreement also provided the Company with a revolving line of credit of up to

$10

million, which matured

five

years from closing. The revolving line of credit accrued interest at a rate of LIBOR plus

4.45%.

The Company was also required to pay the lenders an unused line fee equal to

0.50%

per annum of the average unused portion of the revolving line of credit. Based on certain conditions, both the term loan and revolving line of credit could have been increased by an additional

$10

million for a total of

$60

million.

If the credit facility was terminated prior to the end of the term, the Company was to pay to the lenders a fee as compensation for the costs of being prepared to make funds available to the Company throughout the term equal to an amount determined by multiplying the revolving line of credit commitment amount by

3.0%

in the

first

year,

2.0%

in the

second

year, and

1.0%

in the

third

year and thereafter. Upon repayment in full of the loan, the Company was obligated to make a final payment fee equal to

6%

of the aggregate loan amount. In addition, the Company was required to pay an exit fee of

6.0%

of the aggregate principal amount of all term loan borrowings. The

6%

exit fee was being accreted to interest expense through the maturity of the Midcap loan.

In connection with the sale of the U.S. Laboratory Services Business to Quest pursuant to a Limited Liability Company Interest Purchase Agreement on

November 6, 2018,

approximately

$32.3

million of the gross proceeds received pursuant to the Transaction was paid directly to MidCap to repay the outstanding indebtedness under the MidCap agreement, which included prepayment and exit fees of approximately

$2.3

million. In connection with the Company’s repayment of the outstanding indebtedness under the MidCap Agreements, the Term Loan and the Revolving Loan, and all related agreements thereunder, were terminated and all borrowings outstanding thereunder were repaid in full. The repayment resulted in a loss on extinguishment of debt of

$2.1

million, which represents the cash paid to settle the debt in excess of debt related balances at the time of settlement.

The Company never borrowed under the revolving line of credit.