v3.24.2.u1
Debt
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Debt

7. Debt

2025 Notes and Convertible Note Hedge and Warrant Transactions

During the three months ended June 30, 2024, the conditions allowing holders of the 2025 Notes to convert have not been met. Therefore, the 2025 Notes are not convertible during the three months ended September 30, 2024. As of June 30, 2024, the if-converted value of the 2025 Notes did not exceed the principal value of those notes.

The net carrying amount of the liability component of the 2025 Notes was as follows (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Principal

 

$

38,038

 

 

$

38,038

 

Unamortized issuance cost

 

 

(197

)

 

 

(326

)

Net carrying amount

 

$

37,841

 

 

$

37,712

 

 

 

The following table sets forth the interest expense recognized related to the 2025 Notes (in thousands):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Contractual interest expense

 

$

261

 

 

$

1,304

 

 

$

523

 

 

$

2,610

 

Amortization of debt issuance costs

 

 

65

 

 

 

314

 

 

 

129

 

 

 

621

 

Total interest expense

 

$

326

 

 

$

1,618

 

 

$

652

 

 

$

3,231

 

 

Credit Agreement with Braidwell LP

The Braidwell Credit Agreement provides for a term loan facility in the amount of $200.0 million, which was funded in its entirety in November 2023. Loans borrowed pursuant to the Braidwell Credit Agreement (the Braidwell Term Loans) bear interest at a rate per annum equal to Term Secured Overnight Financing Rate (as defined in the Braidwell Credit Agreement and with a floor of 3.50%) plus 5.25%. At the option of the Company, a portion of the interest payable on the Braidwell Term Loans equal to (i) (a) on or prior to the first anniversary of the Closing Date (as defined in the Braidwell Credit Agreement), 5.25%, (b) following the first anniversary of the Closing Date and on or prior to the third anniversary of the Closing Date, 2.50% and (c) following the third anniversary of the Closing Date, 1.50%, may be paid in-kind rather than in cash. The portion of the interest payable that the Company elects to be paid-in-kind results in an increase to the principal of the Braidwell Term Loans, which for the three and six months ended June 30, 2024 was $2.8 million and $5.4 million, respectively. The Braidwell Term Loans do not amortize, and have a maturity date of November 30, 2029. As of June 30, 2024, the Company was in compliance with covenants under the Braidwell Credit Agreement.

 

The net carrying amount of the liability component of the Braidwell Term Loans was as follows (in thousands):

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Principal

 

$

213,191

 

 

$

207,801

 

Unamortized issuance cost

 

 

(32,633

)

 

 

(34,042

)

Net carrying amount

 

$

180,558

 

 

$

173,759

 

 

The following table sets forth the interest expense recognized related to the Braidwell Term Loans (in thousands):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2024

 

Contractual interest expense

 

$

5,524

 

 

$

10,864

 

Amortization of debt issuance costs

 

 

891

 

 

 

1,737

 

Total interest expense

 

$

6,415

 

 

$

12,601