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10-Q
PARATEK PHARMACEUTICALS, INC. filed this Form 10-Q on 05/09/2018
Entire Document
 

 

 

A summary of stock option activity for the three months ended March 31, 2018 is as follows:

 

 

 

Number

of Shares

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

(in years)

 

 

Aggregate

Intrinsic

Value

(in thousands)

 

Outstanding at December 31, 2017

 

 

3,608,907

 

 

$

17.01

 

 

 

7.78

 

 

$

13,311

 

Granted

 

 

166,150

 

 

 

14.52

 

 

 

 

 

 

 

 

 

Exercised

 

 

(28,699

)

 

 

6.15

 

 

 

 

 

 

 

 

 

Cancelled or forfeited

 

 

(15,424

)

 

 

15.78

 

 

 

 

 

 

 

 

 

Expired

 

 

(40,000

)

 

 

29.80

 

 

 

 

 

 

 

 

 

Outstanding at March 31, 2018

 

 

3,690,934

 

 

$

16.84

 

 

 

7.74

 

 

$

5,540

 

Exercisable at March 31, 2018

 

 

2,319,142

 

 

$

16.35

 

 

 

7.27

 

 

$

5,107

 

 

Restricted Stock Units

A summary of RSU activity for the three months ended March 31, 2018 is as follows: 

 

 

 

Number

of Shares

 

 

Weighted

Average

Grant Date

Fair Value

 

Unvested Balance at December 31, 2017

 

 

1,167,703

 

 

$

18.43

 

Granted

 

 

1,174,270

 

 

 

14.31

 

Released

 

 

(171,999

)

 

 

19.30

 

Unvested Balance at March 31, 2018

 

 

2,169,974

 

 

$

16.13

 

 

Total unrecognized compensation expense for all stock-based awards was $26.6 million as of March 31, 2018. This amount will be recognized over a weighted average period of 2.18 years.

 

 

13.   Long-term Debt

 

Loan Agreement

 

On September 30, 2015, the Company entered into the Hercules Loan Agreement with Hercules and certain other lenders, and Hercules Technology Growth Capital, Inc. (as agent).  Under the Hercules Loan Agreement, Hercules provided the Company with access to term loans with an aggregate principal amount of up to $40.0 million, or collectively, the Term Loan. The Company initially drew a principal amount of $20.0 million, which was funded on September 30, 2015. The remaining $20.0 million under the Hercules Loan Agreement was available to be drawn at the Company’s option in minimum increments of $10.0 million through December 31, 2016, or the Draw Period. The Term Loan was repayable in monthly installments commencing on April 1, 2018 through maturity on September 1, 2020. The interest rate was equal to the greater of (i) 8.5%, or (ii) the sum of 8.5%, plus the “prime rate” as reported in The Wall Street Journal minus 5.75% per annum. An end of term charge equal to 4.5% of the issued principal balance of the Term Loan was payable at maturity, including in the event of any prepayment, and was being accrued as interest expense over the term of the loan using the effective interest method. Borrowings under the Hercules Loan Agreement were collateralized by substantially all of the assets of the Company.

Upon an Event of Default, an additional 5.0% interest would be applied and Hercules could, at its option, accelerate and demand payment of all or any part of the loan together with the prepayment and end of term charges. An Event of Default is defined in the Hercules Loan Agreement as (i) failure to make required payments; (ii) failure to adhere to financial, operating and reporting loan covenants; (iii) an event or development occurs that would be reasonably expected to have a material adverse effect; (iv) false representations in the Hercules Loan Agreement; (v) insolvency, as described in the Hercules Loan Agreement; (vi) levy or attachments on any of the Company's assets; and (vii) default of any other agreement or subordinated debt greater than $1.0 million. In the event of insolvency, this acceleration and declaration would be automatic. In addition, in connection with the Hercules Loan Agreement, the Company agreed to provide Hercules with a contingent security interest in the Company's bank accounts. The Company's control of its bank accounts is not adversely affected unless Hercules elects to obtain unilateral control of the Company's bank accounts by declaring that an Event of Default has occurred. The principal of the Term Loan which was not due within 12 months of March 31, 2018 has been classified as long-term debt as the Company determined that a material adverse effect resulting in Hercules exercising its rights under the subjective acceleration clause is remote.

 

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