Long-Term Debt, Net of Debt Discount and Financing Fees |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt, Net of Debt Discount and Financing Fees | Long-Term Debt, Net of Debt Discount and Financing Fees Long-term debt, net of debt discount and financing fees consists of the following:
Credit Facility
On June 29, 2023, the Company amended its Credit Facility with Oberland Capital and its affiliates TPC Investments II LP and Argo LLC (collectively, the "Lender"). The term loan agreement for the Credit Facility was amended to transition the base interest rate from three month LIBOR to Adjusted SOFR. The Company obtained the first tranche of $35,000 at closing on June 30, 2020. On June 30, 2021, the second tranche of $15,000 was drawn down by the Company.
Each tranche under the Credit Facility requires quarterly interest payments for seven years. Interest is calculated as 7.5% plus the greater of Adjusted SOFR or 2.0% (12.84% at September 30, 2023). Each tranche of the Credit Facility has a term of seven years from the date of issuance (with the first tranche issued on June 30, 2020, maturing on June 30, 2027, and the second tranche issued on June 30, 2021, maturing on June 30, 2028). In connection with the Credit Facility, the Company entered into a revenue participation agreement (the “Revenue Participation Agreement”) with the Lender, which provided that, among other things, a quarterly royalty payment as a percentage of the Company’s net revenues, up to $70 million in any given year, after April 1, 2021, ending on the date upon which all amounts owed under the Credit Facility have been paid in full. This structure results in approximately 1.0% per year of additional interest payments on the outstanding loan amount. The Company recorded $0 and $49 as interest expense for this Revenue Participation Agreement for the three months ended September 30, 2023, and 2022, respectively and $756 and $756 for the nine months ended September 30, 2023, and 2022, respectively. The Company pays the quarterly debt interest on the last day of the quarter and for the three months ended September 30, 2023, and 2022, paid $1,642 and $1,249, respectively, and $4,776 and $3,637 for the nine months ended September 30, 2023, and 2022, respectively, to the Lender. The Company capitalized interest of $1,043 and $1,450 for the three months ended September 30, 2023, and 2022, respectively, and $5,240 and $4,474 for the nine months ended September 30, 2023, and 2022, towards the costs to construct and retrofit the Axogen Processing Center ("APC Facility") in Vandalia, Ohio. See Note 12 - Commitments and Contingencies. To date, the Company has capitalized interest of $16,669 related to this project. The capitalized interest is recorded as part of property and equipment, net in the condensed consolidated balance sheets. As of September 30, 2023, the Company was in compliance with all financial covenants.
Embedded Derivatives
The fair values of the debt derivative liabilities were $3,869 and $4,518 at September 30, 2023, and December 31, 2022, respectively. See Note 6 - Fair Value Measurement.
Unamortized Debt Discount and Financing Fees
The unamortized debt discount consists of the remaining initial fair values of the embedded derivatives related to the Credit Facility.
The financing fees for the Credit Facility were $642 and were recorded as a contra liability to long-term debt on the consolidated balance sheet.
Amortization of debt discount and deferred financing fees for the three months ended September 30, 2023, and 2022 was $224 and $225, respectively, and $666 and $667 for the nine months ended September 30, 2023, and 2022, respectively.
Other Credit Facilities The Company had restricted cash of $6,002 and $6,251 at September 30, 2023, and December 31, 2022, respectively. The September 30, 2023, balance includes a $6,000 irrevocable standby letter of credit and the December 31, 2022, balance included two irrevocable standby letters of credit for $6,000 and $250 representing collateral. During the third quarter ended September 30, 2023, the $250 letter of credit was terminated.
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