Long-Term Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

In February 2019, the Company entered into a loan and security agreement (“Term Loan”) with Western Alliance Bank for an aggregate amount of up to $40.0 million to refinance its prior loan and security agreement with Silicon Valley Bank. The Company incurred an immaterial amount of debt issuance costs in connection with the Term Loan. The debt issuance costs are recorded on the Company’s consolidated balance sheets and are being amortized over the life of the Term Loan using the effective-interest method.

The Term Loan was subsequently amended several times, with the most recent amendment taking place in July 2022. As amended, the Term Loan matures on July 14, 2027 and provides for an aggregate borrowing amount of up to $70.0 million, which bears interest at the prime rate published in the Wall Street Journal plus a margin of 1.25%, with a floor of 6.00%. The Company incurred an immaterial amount of debt issuance costs in connection with the amendment. For accounting purposes, pursuant to FASB ASC Topic 470, Debt, this transaction was accounted for as a modification of the Term Loan. The debt issuance costs were recognized in interest expense within the Company’s consolidated statement of operations during the third quarter of 2022.

The Term Loan requires the Company to comply with certain financial covenants, including, among other things, liquidity requirements, performance metrics, and a debt service coverage ratio. The Term Loan also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, loans and investments, additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the Term Loan contains customary events of default. As of December 31, 2022 and 2021, the Company was in compliance with its debt covenants under the Term Loan.

The Term Loan is payable in consecutive monthly installments. Interest is due monthly on amounts outstanding under the Term Loan. The Company is also permitted to make voluntary prepayments without penalty or premium at any time.

As of December 31, 2022 and 2021, the effective interest rate for borrowings under the Term Loan was 9.70% and 6.65%, respectively.

During the year ended December 31, 2022, the Company borrowed an aggregate amount of $0.7 million under the Term Loan and repaid a total of $6.3 million on amounts outstanding under the Term Loan. During the year ended December 31, 2021, the Company borrowed an aggregate amount of $5.0 million under the Term Loan and repaid a total of $4.0 million on amounts outstanding under the Term Loan. During the year ended December 31, 2020, the Company borrowed an aggregate amount of $18.6 million under the Term Loan and repaid a total of $1.2 million on amounts outstanding under the Term Loan. As of December 31, 2022 and 2021, the amount outstanding under the Term Loan was $30.3 million and $36.0 million, respectively.

During the years ended December 31, 2022, 2021, and 2020, the Company incurred $2.4 million, $2.5 million, and $1.7 million, respectively, of interest cost relating to the Term Loan, of which $1.6 million, $0.3 million, and $0.4 million, respectively, was capitalized as part of an asset.

As of December 31, 2022, annual scheduled principal payments of the Term Loan were as follows:

	Amount
	(in thousands)
2023	$	4,000
2024	4,000
2025	4,000
2026	4,000
2027	14,333
Total principal payments	30,333
Less: unamortized debt discount	(666)
Less: current portion of long-term debt	(3,879)
Non-current portion of long-term debt	$	25,788