Loan Payable

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Loan Payable

6. LOAN PAYABLE

On January 15, 2021, the Company entered into a loan agreement with Oxford Finance LLC (the “Lender”) to borrow a term loan amount of up to $35,000 to be funded in three tranches. The company has only drawn Tranche A in the amount of $15,000 which was wired to the Company on January 15, 2021. Tranche B of $10,000 expired on March 31, 2022. Tranche C of $10,000 is available at the Lender’s option.

On December 23, 2022, in connection with and following the Company’s merger with Millendo Therapeutics, Inc. (“Millendo”), the Company entered into a First Amendment to the loan agreement. The amendment modified the agreement as follows: (i) each of the Company and Millendo Therapeutics US, Inc., a Delaware corporation and wholly owned non-operating subsidiary of the Company created in connection with the merger (“Millendo US”), were joined as co-borrowers under the Loan Agreement; (ii) the interest-only repayment period was extended through December 31, 2023 (which interest-only period may be further extended through June 30, 2024 under certain circumstances); and (iii) a security interest in all of the assets of the Company and Millendo, in addition to the existing interest the Lender had in TempestTx, including any intellectual property, was granted to the Lender. In addition, the Lender permitted a one-time prepayment in the amount of $5.0 million, which the Company paid on December 23, 2022.

Following the amendment to the loan agreement, the term loan matures on August 1, 2025 and has an annual floating interest rate of 7.15% which is an Index Rate plus 7.10%. Index Rate is the greater of (i) 1-Month CME Term SOFR or (ii) 0.05%. In the fourth quarter of 2023, the Company achieved the circumstances necessary to extend the interest-only repayment period through June 30, 2024. Monthly principal payments of $733 began on July 1, 2024 and the Company paid the first principal payment to Oxford in July 2024. Related to this borrowing, the Company recorded loan discounts totaling $898 and paid $95 of debt issuance costs. These amounts would be amortized as additional interest expense over the life of the loan. As of June 30, 2024, the balance of the loan payable (net of debt issuance costs) was $10.7 million. The carrying value of the loan approximates fair value (Level 2).

For the three and six months ended June 30, 2024, total interest expense was $372 and $740, respectively. For the three and six months ended June 30, 2023, total interest expense was $356 and $700, respectively.