Long Term Debt, Net

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long Term Debt, Net

Long Term Debt, Net

Hayfin Loan Agreement

On June 30, 2020, the Company entered into the Hayfin Loan Agreement, which Hayfin funded on July 2, 2020, providing the Company with a senior secured term loan in an aggregate amount of $50.0 million (the “Term Loan”). The Term Loan matures on June 30, 2025 (the “Maturity Date”).

On June 15, 2023, the Company entered into the Second Amendment to the Hayfin Loan Agreement to change the LIBOR reference rate under the Hayfin Loan Agreement from LIBOR to SOFR. Prior to the Second Amendment, interest on any borrowings under the Hayfin Loan Agreement was based on LIBOR, subject to a floor of 1.5% (the “Floor”), plus a margin of 6.75% per annum (the “Margin”). Subsequent and pursuant to the Second Amendment, interest on any borrowings is based on SOFR, plus a fallback provision of 0.15%, subject to the Floor, plus the Margin. The Term Loan carried an interest rate of 12.1% as of June 30, 2023.

As of June 30, 2023, the Company was in compliance with all applicable financial covenants under the Hayfin Loan Agreement. A breach of a financial covenant in the Hayfin Loan Agreement, if uncured or unable to be cured, would likely result in an event of default that could trigger the lender’s remedies, including acceleration of the entire principal balance of the loan as well as any applicable prepayment premiums.

The balances of the Term Loan as of June 30, 2023 and December 31, 2022 were as follows (in thousands):

	June 30, 2023		December 31, 2022
Outstanding principal	$	50,000	$	50,000
Deferred financing costs	(1,007)		(1,219)
Original issue discount	(155)		(187)
Long term debt, net	$	48,838	$	48,594

Interest expense related to the Term Loan, included in interest expense, net in the unaudited condensed consolidated statements of operations, was as follows (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stated interest	$	1,505	$	1,043	$	2,956	$	2,074
Amortization of deferred financing costs	108		101		212		199
Accretion of original issue discount	17		16		33		30
Interest expense	$	1,630	$	1,160	$	3,201	$	2,303

A summary of principal payments due on the Term Loan, by year, from June 30, 2023 through maturity are as follows (in thousands):

Year ending December 31,	Principal
2023 (excluding the six months ended June 30, 2023)	$	—
2024	—
2025	50,000
2026	—
2027	—
Thereafter	—
Outstanding principal	$	50,000

As of June 30, 2023, the fair value of the Term Loan was $47.9 million. This valuation was calculated based on a series of Level 2 and Level 3 inputs, including a discount rate based on the credit risk spread of debt instruments of similar risk character in reference to U.S. Treasury instruments with similar maturities, with an incremental risk premium for risk factors specific to the Company. Fair value was calculated by discounting the remaining cash flows associated with the Term Loan to June 30, 2023 using this discount rate.