Viridian Therapeutics, Inc.\DEVRDN
Viridian Therapeutics, Inc.\DE Debt Disclosure
DEBT
Loan and Security Agreement with Hercules Capital, Inc.
In April 2022, the Company entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of its subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders named therein (the “Lenders”). Under the Hercules Loan and Security Agreement, the Lenders provided the Borrower with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches, including an initial tranche of $25.0 million. Upon signing the Hercules Loan and Security Agreement, the Borrower drew an initial principal amount of $5.0 million. The Borrower was originally obligated to make interest-only payments through April 1, 2024, which was extended to October 1, 2024 upon achievement of a development milestone in August 2022.
In August 2023, the Borrower executed the first amendment to the Hercules Loan and Security Agreement (the “Hercules First Amendment”) to modify certain terms of the agreement, extend the maturity date to October 1, 2026 and increase the aggregate principal amount of up to $150.0 million, in four tranches, consisting of (i) an initial tranche of $50.0 million, $25.0 million of which was available through December 15, 2023 and $25.0 million of which was available from July 1, 2024 through December 15, 2024; (ii) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, available through February 15, 2025; (iii) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, which
was available through March 31, 2025; and (iv) a fourth tranche of $60.0 million subject to approval by the Lenders’ investment committee(s), which was available through June 15, 2025. Upon execution of the Hercules First Amendment, the Borrower drew an additional principal amount of $15.0 million, increasing the cumulative amount drawn to $20.0 million. The obligations of the Borrower under the Hercules First Amendment agreement were secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property.
In October 2025, the Borrower executed a second amendment (the “Hercules Second Amendment”) to its Hercules Loan and Security Agreement. Under the Hercules Second Amendment, the term loan facility was amended to extend the maturity date to October 1, 2030 and provide an aggregate principal amount of up to $300.0 million, consisting of (i) an initial tranche of $100.0 million (“Tranche 1”), comprised of $30.0 million drawn upon execution of the Hercules Second Amendment, increasing the cumulative amount drawn to $50.0 million, $25.0 million (“Tranche 1B”) available through September 15, 2026, and $25.0 million available from the earlier to occur of the expiration or full funding of Tranche 1B through December 15, 2026, (ii) a second tranche of $50.0 million (“Tranche 2”), subject to achievement of certain regulatory milestones, available from (A) the earlier to occur of the full draw of Tranche 1 and December 15, 2025 through (B) the earlier to occur of June 15, 2027 and the date that is 60 days following such achievement of such regulatory milestones (the “Tranche 2 Expiration Date”), (iii) a third tranche of $50.0 million (“Tranche 3”), subject to achievement of certain regulatory milestones, available from (A) the earlier to occur of the full draw of Tranche 2 and the Tranche 2 Expiration Date through (B) the earlier to occur of June 15, 2027 and the date that is 60 days following such achievement of such regulatory milestones (the “Tranche 3 Expiration Date”), (iv) a fourth tranche of $50.0 million, subject to achievement of a certain revenue milestone, available from (A) the earlier to occur of the full draw of Tranche 3 and the Tranche 3 Expiration Date through (B) March 15, 2028, and (v) a fifth tranche of $50.0 million, subject to approval by the Lenders’ investment committee(s), available through October 1, 2030. The milestones for Tranche 2, Tranche 3 and Tranche 4 have not yet been achieved. The obligations of the Borrower under the Hercules Second Amendment are secured by substantially all of the assets of the Borrower.
The amended term loan facility bears interest at a floating per annum rate equal to the greater of 8.95% and 1.45% above the Prime Rate (as defined therein), provided that the interest rate will not exceed a per annum rate of 9.45%. Interest is payable monthly in arrears on the first business day of each month. The interest rate as of December 31, 2025 was 8.95%.
Under the Hercules Second Amendment, the Borrower is obligated to make interest-only payments through October 1, 2029. If certain regulatory milestones are met, then the interest-only period will be extended to October 1, 2030. The Borrower is required to repay the outstanding amount of the term loan facility in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2030. In addition, the Borrower is required to pay an end-of-term fee equal to 4.25% of the principal amount of funded advances if the term loan facility is repaid on or prior to October 17, 2027 or 6.00% of the principal amount of funded advances at maturity if the term loan facility is repaid after October 17, 2027.
The total cost of all items (cash interest, debt issuance costs and end-of-term fees) is being recognized as interest expense using an effective interest rate of approximately 13.0%. The Company recorded interest expense of $3.1 million, $2.2 million and $1.3 million during the years ended December 31, 2025, 2024, and 2023, respectively.
The following table summarizes the components of the amended term loan facility, on the Company’s consolidated balance sheets at December 31, 2025 and 2024:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Gross proceeds outstanding | $ | 50,000 | $ | 20,000 | |||||||
| Accrued end-of-term fees | 400 | 582 | |||||||||
| Unamortized debt issuance costs | (460) | — | |||||||||
| Carrying value | $ | 49,940 | $ | 20,582 | |||||||
Future principal payments, which exclude the end-of-term fee as of December 31, 2025 are as follows (in thousands):
| Fiscal Year | Principal Payments | ||||
| 2026 | — | ||||
| 2027 | — | ||||
| 2028 | — | ||||
| 2029 | 11,102 | ||||
| 2030 | 38,898 | ||||
| Total | $ | 50,000 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2018 | Mar 14, 2019 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.