Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

7.Debt

Loan and Security Agreement

On April 13, 2021, the Company entered into a senior secured term loan facility with Silicon Valley Bank (“SVB”) (the “SVB Loan and Security Agreement”), which provided for a $10.0 million term loan, of which $2.5 million was drawn (the “Term Loan”). On June 27, 2022, the Company entered into the Joinder and First Amendment to Loan and Security Agreement (the “Amendment”) with SVB. The Amendment amends certain key terms of the SVB Loan and Security Agreement (together the “Credit Facility”) to among other things: (1) provide

additional term loan advances of up to $30.0 million (“Additional Term Loan Advances”), $20.0 million of which is available immediately, and an additional $10.0 million is available upon the satisfaction of certain conditions related to clinical development in Psoriasis; (2) extend the draw period from June 30, 2022 to February 29, 2024; (3) extend the maturity date from February 1, 2025 to May 1, 2027; and (4) reduce the per annum interest rate from the greater of (i) 1.75% above the WSJ prime rate and (ii) 5.0%, to the greater of (i) 0.75% above the WSJ prime rate and (ii) 4.25%. Amounts borrowed under the Additional Term Loan Advances will be interest only through June 1, 2024, followed by 36 monthly payments of principal and interest. There is no required minimum draw or financial covenants associated with the Credit Facility, as amended. The Credit Facility calls for a final payment fee equal to 5.0% of the original principal amount borrowed under the Additional Term Loan Advances, due upon the earlier of maturity, prepayment or acceleration of the principal due to an event of default.

Upon execution of the Amendment, the Company repaid the $2.5 million Term Loan and the final payment fee of $0.1 million. Per the Amendment, the associated prepayment fee was waived. As of June 30, 2022, there was no outstanding balance on the Credit Facility.

The Company recorded a loss on extinguishment of debt of approximately $0.2 million in the condensed consolidated statements of operations for the three and six months ended June 30, 2022, representing the difference between the carrying amount of the Term Loan and the amount paid to retire the Term Loan.

In conjunction with the Amendment, the Company issued to SVB a warrant to purchase up to 42,349 shares of the Company’s common stock at an exercise price of $14.43 per share. If the Company draws down any portion of the additional $10.0 million term loan, the amount of common stock issuable upon exercise of the warrant will increase by up to 21,174 shares. The warrant has a cashless exercise provision allowing the holder, in lieu of payment of the aggregate exercise price, to surrender to the Company shares having an aggregate value equal to the aggregate exercise price, based on the fair market value of the Company’s common stock at the time of exercise. The Company estimated the fair value of the warrant on the date of issuance using the Black-Scholes model.

The Company incurred financing expenses of approximately $0.6 million (including the fair value of the warrant) related to the Amendment, which was recorded as deferred costs in other noncurrent assets in the condensed consolidated balance sheets and is being amortized to interest expense over the available draw period using the straight-line method.