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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Borrowing Arrangements |
NOTE 8 — BORROWING ARRANGEMENTS K2 HealthVentures Loan and Security Agreement
In May 2020, the Company entered into the K2 Loan and Security Agreement in the amount of $45.0 million. The K2 Loan and Security Agreement was drawable in three tranches and to date the Company has drawn down $35.0 million with the remaining tranche of $10.0 million having lapsed as of December 31, 2021. Pursuant to the terms of the K2 Loan and Security Agreement, the principal accrues interest at an annual rate equal to the greater of 8.45% or the sum of the Prime Rate plus 5.2%. In April 2022, the K2 Loan and Security Agreement was amended in exchange for a $0.3 million amendment fee so that (i) payments will be interest only until the loan’s maturity date of June 1, 2024, and (ii) the Financial Covenant will apply for the entire term of the K2 Loan and Security Agreement. This amendment resulted in a debt modification with the $0.3 million amendment fee recorded as a debt discount. The K2 Loan and Security Agreement includes both financial and non-financial covenants including the Financial Covenant as well as solvency requirements, the breach of which would trigger an event of default. The Company was in compliance with the Financial Covenant and solvency requirements at March 31, 2023. The Company recorded the debt net of $2.8 million comprised of deferred financing costs, debt discount and associated exit fee which are being accreted to interest expense over the term of the K2 Loan and Security Agreement using the effective interest method. Additionally, the Company incurred $0.2 million in facilities fee related to the second tranche which was previously classified as a prepaid asset. As of both March 31, 2023 and December 31, 2022, the K2 Loan principal balance was $35.0 million. As of March 31, 2023 and December 31, 2022, the carrying value of long-term debt was $36.4 million and $36.2 million, respectively. Future required principal and final payments on the K2 Loan were as follows at March 31, 2023 ($ in thousands):
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