Deerfield Debt Obligation |
12 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Debt Disclosure [Abstract] | |
| Deerfield Debt Obligation |
Deerfield Debt Obligation
In relation to the Company's acquisition of Avadel's pediatric products on February 16, 2018, the Company assumed an obligation that Avadel had to Deerfield (the "Deerfield Obligation"). Beginning in July 2018 through October 2020, the Company will pay a quarterly payment of $262,500 to Deerfield. In January 2021, a balloon payment of $15,250,000 is due. On the acquisition date, the Company determined the fair value of these payments to be $15,075,000 using a market participant's estimated cost of debt. Management performed a credit risk analysis that determined the Company's credit rating to be B to BB plus the yield on a ten-year treasury security. The difference between the gross value and fair value of these payments will be recorded as interest expense in the Company's consolidated statements of operations through January 2021 using the effective interest method. Interest expense for the year ended December 31, 2018 was $0.8 million and is included in interest expense, net on the accompanying statements of operations. The amounts due within the next year are included in current portion of long-term debt on the Company's consolidated balance sheets. The amounts due in greater than one year are included in long-term debt, net of current portion, on the Company's consolidated balance sheets. The Deerfield Obligation was $15.4 million as of December 31, 2018, of which $1.1 million is recorded as a current liability. The Deerfield Obligation contains certain covenants in which the Company is in compliance with as of December 31, 2018.
|