Note Payable |
6 Months Ended | ||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||
| Note Payable |
On May 12, 2025, the Company entered into the 2025 NPA with CALW SA LLC, an affiliate of Oberland Capital Management LLC, as Purchaser Agent, and the 2025 Investor. Under the 2025 NPA, the Company may sell to the 2025 Investor, and the 2025 Investor may buy from the Company, tranches of notes (collectively, the “Notes”) in an aggregate principal amount of up to $105.0 million as follows: (a) an initial sale of $30.0 million principal amount of Notes (the “First Purchase Note”), which was funded upon contract signing; (b) at the option of the Company, a second sale (the “Second Sale”) of $25.0 million principal amount of Notes, in up to two increments of $12.5 million each, at any time prior to December 31, 2026; and (c) at the option of the Company and the 2025 Investor, a third sale (the “Third Sale”) of up to $50.0 million principal amount of Notes, at any time prior to December 31, 2026. The obligations of the 2025 Investor to purchase the Notes are subject to certain customary conditions precedent. The purchase price of the Notes is, in each case, 98% of the principal amount thereof. The net proceeds in connection with the issuance of the First Purchase Note, after deducting the debt discount and debt issuance costs of $0.6 million and $0.7 million, respectively, was approximately $28.7 million. The outstanding principal amount of the Notes bears interest at a rate per annum equal to the sum of (i) the greater of the Term SOFR (as defined in the 2025 NPA) and 4.30%, and (ii) 3.95%, with a minimum rate of 8.25% and a cap of 9.50%, payable quarterly in arrears. For the first six quarters following the purchase date for each sale of Notes (each, a “Purchase Date”), 50% of the interest due shall be paid-in-kind and added to the then-outstanding principal balance of the Notes, which may be extended by two quarters at the Company’s option. The Notes will mature on the sixth anniversary of the applicable Purchase Date (as defined in the 2025 NPA) or the date on which all amounts owing to the 2025 Investor have been paid in full (the “Maturity Date”). Upon the occurrence and during the continuance of an Event of Default (as defined in the 2025 NPA) under the 2025 NPA, the then-applicable interest rate on all outstanding obligations will increase by 4.00%. Beginning on January 1, 2027 and continuing until the Maturity Date of the First Purchase Note, the 2025 Investor will receive 0.375% of Net Revenue (as defined in the 2025 NPA) for any fiscal quarter (of up to $50,000,000 of Net Revenue for each fiscal year), payable quarterly, with the percentage increasing pro rata in the event of a Second Sale or Third Sale of Notes. The outstanding principal amount of the Notes, interest accrued thereon and any other amounts owing to the 2025 Investor under the 2025 NPA, will be due and payable on the applicable Maturity Date. All of the Notes may be redeemed prior to the Maturity Date at the option of the Company, subject to payment of the Repayment Amount (as defined in the 2025 NPA). The 2025 Investor may demand redemption of the Notes prior to the Maturity Date in the event of a Change of Control (as defined in the 2025 NPA) of the Company or an Event of Default (as defined in the 2025 NPA). The 2025 NPA contains no financial covenants. The Company’s obligations under the 2025 NPA are subject to customary covenants, including limitations on the Company’s ability to dispose of assets, undergo a change of control, merge with or acquire other entities, incur debt, incur liens, pay dividends or other distributions to holders of its capital stock, repurchase stock and make investments, in each case subject to certain exceptions. The Company’s obligations under the 2025 NPA are secured by a security interest on substantially all of the Company’s assets, including its intellectual property. Scheduled principal payment as of June 30, 2025 with respect to the First Purchase Note is summarized as follows:
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