Debt

12 Months Ended

Dec. 31, 2019

The Company’s debt balances are detailed below:



	December 31,
(in thousands)	2019			2018
2018 Revolving Credit Facility (defined below)	$	6,000		$	6,000
2018 Term Loan Facility (defined below)	20,000			20,000
Equipment financing loan	5,000			5,000
Debt issuance costs	(431		)	(612		)
Total debt outstanding	$	30,569		$	30,388
Less: current portion of long-term debt	11,000			—
Long-term debt	$	19,569		$	30,388

The Company records debt issuance costs as a reduction of carrying value of the debt in the accompanying balance sheets. As of December 31, 2019 and 2018, debt issuance costs, net of amortization, totaled $0.4 million and $0.6 million, respectively. Debt issuance costs are amortized as interest expense over the term of the loan for which amortization of $0.2 million, $93,000 and 37,000 was recorded in 2019, 2018 and 2017, respectively.

Amended and Restated Loan and Security Agreement

In June 2018, the Company refinanced its then existing revolving credit facility and term loan facility under a loan and security agreement with Silicon Valley Bank (“SVB”) (the “Amended LSA”). The Amended LSA includes a $6.0 million revolving credit facility (the “2018 Revolving Credit Facility”) and a term loan facility (the “2018 Term Loan Facility”) comprised of (i) a $10.0 million term loan advance at closing, (ii) a conditional $5.0 million term loan advance, if no event of default has occurred and is continuing through the borrowing date, and (iii) an additional conditional term loan advance of $5.0 million if no event of default has occurred and is continuing based upon a minimum level of gross profit for the trailing 12-month period. The 2018 Term Loan Facility has a floating interest rate that is equal to 4.0% above the prime rate, with interest payable monthly and principal amortizing commencing on July 1, 2020, and will mature in June 2022. Borrowings under the 2018 Revolving Credit Facility carry a variable annual interest rate of prime rate plus 0.75% to 1.25% with an additional 5% on the outstanding balances in the event of a default. The 2018 Revolving Credit Facility matures in June 2020.

The 2018 Term Loan Facility and the 2018 Revolving Credit Facility (the “SVB Credit Facilities,”) contain customary negative financial covenants that limit the Company’s ability to, among other things, incur additional indebtedness, grant liens, make investments, repurchase stock, pay dividends, transfer assets and merge or consolidate. The SVB Credit Facilities also contain customary affirmative financial covenants, including delivery of audited financial statements. The Company was in compliance with the financial covenants in the SVB Credit Facilities as of December 31, 2019.

The SVB Credit Facilities are secured by an interest in the Company’s assets including manufacturing equipment, inventory, contract rights or rights to payment of money, leases, license agreements, general intangibles, and cash.

In conjunction with the execution of the Amended LSA, the Company issued two common stock warrants one each to SVB and its affiliate to provide the ability to purchase an aggregate of 60,002 shares of the Company’s common stock at an exercise price of $3.00 per share. The common stock warrants were fully exercisable on the date of the grant and had a term of 10 years. The Company also paid a commitment fee of $30,000 to SVB in connection with the execution of the Amended LSA. Subsequent to the closing of the IPO, all outstanding warrants to purchase shares of common stock were cashless exercised and no warrants were outstanding as of December 31, 2019.

As of December 31, 2019, and 2018, the Company had $6.0 million and $20.0 million in borrowings on the 2018 Revolving Credit Facility and 2018 Term Loan Facility, respectively, and had no availability to borrow under either of these loan facilities. In 2019 and 2018, the Company incurred $2.2 million and $0.9 million, respectively, in interest expense related to the SVB Credit Facilities. In 2017, the Company incurred $0.1 million in interest expense related to the predecessor credit facilities with SVB. The interest rates on the 2018 Revolving Credit Facility and the 2018 Term Loan Facility at December 31, 2019 were 5.5% and 8.75%, respectively.

Equipment Loan Facility

In September 2018, the Company entered into an agreement with Structural Capital Investments II, LP, or Structural Capital, wherein Structural Capital agreed to provide an equipment loan facility to the Company in the amount of $5.0 million for the purpose of purchasing equipment. Subject to Structural Capital’s approval, the Company may request that they advance an additional $5.0 million or an aggregate of $10.0 million. The equipment loan facility matures on May 1, 2022, carries an interest rate of 6.25% plus the greater of 4.75% or the prime rate and is secured by the financed equipment. Principal repayments begin six months or 18 months after loan draw depending on the Company achieving certain financial milestones, and therefore, are paid over a period of 37 months or 25 months, respectively. As of June 30, 2019, the Company achieved all of the milestones and, therefore, monthly installment repayments of principal are expected to begin on December 31, 2020. The Company is also required to offer Structural Capital the right to purchase up to an aggregate of $1.0 million of the Company’s capital

stock or any other equity interest in any transaction where the Company receives gross proceeds of at least $10.0 million. The equipment loan facility has a prepayment penalty of 2% during the first two years of the term and 1% thereafter. The Company must also pay a final payment fee of 13% of the facility commitment amount on the maturity date and such other date as the advances become due and such fee will increase by 1% if certain milestones are achieved.

The Company had $5.0 million in borrowings outstanding as of December 31, 2019 and 2018 under the equipment loan facility. The interest rate on the equipment loan facility at December 31, 2019 and 2018 was 11.0% and 11.5%, respectively. For 2019, 2018 and 2017, the Company recorded $0.6 million, $0.2 million, and $0, respectively, in interest expense related to the equipment loan facility. The Company was in compliance with the financial covenants contained in the equipment loan facility as of December 31, 2019.

Promissory Note

The Company entered into a note with the Missouri Department of Economic Development in the amount of $1.5 million on December 20, 2013 or the Missouri Note. The principal was due and payable on December 20, 2021. The Missouri Note carried a fixed interest rate of 2.0% per year, payable quarterly, commencing on December 31, 2016. The Company recognized interest expense of $29,000, in 2017. On June 28, 2018, the Missouri Note was paid in full.

Convertible Promissory Notes

From August 2017 through November 2017, the Company issued $10.0 million in Convertible Promissory Notes (“2017 Convertible Notes”) to several purchasers of the Series G Preferred Stock, two of whom were 5% stockholders and two were non-employee members of the Company’s Board of Directors. The 2017 Convertible Notes were due six months after the issuance date. The 2017 Convertible Notes had a fixed interest rate of 5% per year during their term and permitted the holders to convert the notes to Series G Preferred Stock at 90% of the cash price per share.

The outstanding principal and all accrued but unpaid interest under the 2017 Convertible Notes were converted into 1,026,367 shares of Series G Preferred Stock beginning in November 2017. The number of shares issued was calculated based on the quotient obtained by dividing the outstanding principal and all accrued interest by 90% of the cash price per share of the Series G Preferred Stock issuance. In connection with the accounting for the 2017 Convertible Notes, a debt discount of $1.1 million was recognized at issuance, of which $0.7 million was recognized as a component of interest expense through the date of conversion. The remaining unamortized discount of $0.4 million was recorded in other expense at the date of conversion.

Stock Warrant Liability

In connection with its financing arrangements, the Company issued warrants to purchase shares of its convertible preferred stock. For one of the financing arrangements, the Company issued warrants to purchase 121,694 shares of Series B convertible preferred stock at an exercise price of $1.07 per share. For a separate financing arrangement, the Company issued warrants to purchase 39,073 shares of Series E convertible preferred stock at an exercise price of $3.68 per share. In connection with the Company’s refinancing of its credit facilities with SVB, the Company issued to SVB and its affiliates warrants to purchase an aggregate of 60,002 shares of its common stock at an exercise price of $3.00 per share. Upon the closing of the IPO, the warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for a total of 160,767 shares of common stock at the same respective exercise price per share. Subsequent to the closing of the IPO, all outstanding warrants to purchase shares of common stock were cashless exercised and no warrants were outstanding as of December 31, 2019. See Note 2 for further information on the warrant liabilities.