Long-Term Debt

12 Months Ended

Dec. 31, 2024

Long-term debt

The following table summarizes our borrowings (in millions):


	As of December 31,
	2024		2023
Long-term debt, non-current (Contractual maturity 2029)	$	50	$	—
Unamortized discounts and issuance costs	(2)		—
Total long-term debt	$	48	$	—

On August 27, 2024, we and Hercules entered into a loan and security agreement (the "Hercules Agreement"), under which Hercules agreed to lend us up to $250 million in term loans in various tranches subject to minimum draw requirements for each tranche. Under the terms of this agreement, $50 million was drawn at closing and an additional $100 million is committed and fully available at our sole option in minimum increments of $25 million. A second tranche of $100 million will be available subject to future approval by Hercules.

The Hercules Agreement has an initial maturity date of September 1, 2029 which is extendable by 12 months, at our discretion subject to the achievement of certain regulatory milestones related to our product candidates. Repayment of the principal amount will be in 13 monthly installments commencing September 1, 2028, if not extended. The term loans have an interest only period for the first 48 months from the agreement date and bear interest at a rate equal to the greater of (i) 10.45% or (ii) the prime rate plus 1.95%. We may prepay all or any portion of the outstanding term loans at any time, subject to a prepayment fee of: (i) 3.00% of the principal amount prepaid if the prepayment occurs prior to the first anniversary of the funding date; (ii) 2.00% of the principal amount prepaid if the prepayment occurs on or after the first anniversary of the funding date and prior to the second anniversary of the funding date; or (iii) 1.00% of the principal amount prepaid thereafter. The agreement also has an upfront facility fee of $1 million and an end of term charge of 7.75% of the total amount borrowed.

The Hercules Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to incur liens, incur indebtedness, make investments, pay dividends, merge or consolidate, dispose of assets, and enter into transactions with affiliates, subject to customary exceptions. We are also required to maintain a minimum cash balance of 50% of the funded amount if our market capitalization were to fall below a certain threshold which will be reduced in the event of certain regulatory approvals of our product candidates. We do not have covenant requirements associated with this agreement until October 1, 2026.

The Hercules Agreement is secured by a first priority security interest in substantially all of our assets, excluding intellectual property. The Hercules Agreement also contains customary events of default terms, including payment defaults, breaches of covenants, bankruptcy and insolvency events, cross-defaults to other indebtedness, material adverse events, and the occurrence of a change of control. Upon the occurrence of an event of default, Hercules may declare all outstanding obligations under the Hercules Agreement to be immediately due and payable and exercise any or all of its rights and remedies, including foreclosure on the collateral securing the term loans.

The aggregate future minimum payments including principal payments and the end of term charge, due under the Hercules Agreement, are as follows (in millions):


Maturity Date	Amount
2028	$	15
2029	39
Total payments	$	54

During the year ended December 31, 2024, we recognized $2 million of interest expense at an effective interest rate of 13.39%, including amortization of the debt discount and issuance costs. As of December 31, 2024, we had borrowed $50 million under the Hercules Agreement and had $200 million of additional borrowing capacity, of which $100 million is subject to additional approval by Hercules.