Loan Payable

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Loan Payable

7. LOAN PAYABLE

Hercules Loan and Security Agreement

On May 11, 2022 (the "Closing Date") the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules Capital, Inc., which provides for a term loan with aggregate maximum borrowings of up to $55.0 million (the “Term Loan”). Under the Loan Agreement, the Company borrowed an initial amount of $15.0 million, and, subject to the terms of the Loan Agreement, the Company may draw down an additional $20.0 million under the first tranche of the Term Loan at its discretion, and an additional $20.0 million from the second tranche subject to certain milestones and conditions.

The Term Loan bears interest at a variable annual rate equal to the greater of (i)(a) 4.05% plus (b) the Prime Rate (as reported in the Wall Street Journal) and (ii) 7.55%. Borrowings under the Loan Agreement are repayable in monthly interest-only payments through December 1, 2024, or December 1, 2025 if certain conditions have been achieved prior to December 1, 2024. After the interest-only payment period, borrowings under the Loan Agreement are repayable in equal monthly payments of principal and accrued interest until November 1, 2026. At the Company's option, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment fee of 3.0% of the principal amount if prepayment occurs during the 12 months following the Closing Date, 2.0% after 12 months following the Closing Date and 1.0% after 24 months but on or prior to 36 months following the Closing Date.

The Company paid a $0.3 million facility charge upon closing and will pay a facility charge in connection with a draw under the second tranche of the Term Loan equal to 0.75% of the amount drawn. The Loan Agreement also provides for a final payment, payable upon maturity or the repayment of the obligations in full or in part (on a pro rata basis), equal to 5.50% of the aggregate principal amount of Term Loans advanced to the Borrower and repaid on such date, which is being accrued to other liabilities. The Loan Agreement includes a minimum cash covenant of $12.5 million that applies commencing on the date the principal amount borrowed under the Term Loan exceeds $25.0 million, subject to waiver upon satisfaction of certain conditions as set forth in the Loan Agreement. Borrowings under the Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets, other than its intellectual property. In addition, the Loan Agreement includes certain customary affirmative and restrictive covenants, representations and warranties, and requires the Company to maintain its cash in controlled deposit accounts.

The loan payable balance as of June 30, 2022 consisted of the following (in thousands):

	JUNE 30, 2022
Principal amount of loan payable	$	15,000
Less: current portion of loan payable		—
Loan payable, net of current portion		15,000
Facility charge		(253	)
Unamortized issuance costs		(127	)
Loan payable, including accretion, net of current portion	$	14,620

The estimated future principal payments as of June 30, 2022 were due as follows (in thousands):

	JUNE 30, 2022
2022	$	—
2023		—
2024		574
2025		7,210
2026		7,216
Total	$	15,000