SEC Filings

10-Q
ARRAY BIOPHARMA INC filed this Form 10-Q on 05/10/2017
Entire Document
 

proportion to the allocation of the liability and equity components of the Convertible Notes. Equity issuance costs of $1.6 million were recorded as an offset to additional paid-in capital. Total debt issuance costs of $2.7 million were recorded on the issuance date, and are reflected in the Company's balance sheets for all periods presented on a consistent basis with the debt discount, or as a direct deduction from the carrying value of the associated debt liability. The debt discount and debt issuance costs will be amortized as non-cash interest expense through June 1, 2020. The balance of unamortized debt issuance costs was $1.5 million and $1.8 million as of March 31, 2017 and June 30, 2016, respectively.

The fair value of the Convertible Notes was approximately $190.5 million and $110.2 million at March 31, 2017 and June 30, 2016, respectively, and was determined using Level 2 inputs based on their quoted market values.


Summary of Interest Expense

The following table shows the details of the Company's interest expense for all of its debt arrangements outstanding during the periods presented, including contractual interest, and amortization of debt discount, debt issuance costs and loan transaction fees that were charged to interest expense (in thousands):
 
Three Months Ended
 
Nine Months Ended
 
March 31,
 
March 31,
 
2017
 
2016
 
2017
 
2016
Notes payable
 
 
 
 
 
 
 
Simple interest
$
123

 
$

 
$
289

 
$

Fees paid

 

 
240

 

Total interest expense on the notes payable at fair value
123

 

 
529

 

Comerica Term Loan
 
 
 
 
 
 
 
Simple interest

 
130

 
247

 
372

Amortization of prepaid fees for letters of credit

 
8

 
2

 
25

Total interest expense on the Comerica term loan

 
138

 
249

 
397

Silicon Valley Bank Term Loan
 
 
 
 
 
 
 
Simple interest
66

 

 
73

 

Amortization of debt discount
84

 

 
84

 

Amortization of prepaid fees for line of credit
43

 

 
43

 

Total interest expense on the Silicon Valley Bank term loan
193

 

 
200

 

 
 
 
 
 
 
 
 
Convertible Senior Notes
 
 
 
 
 
 
 
Contractual interest
992

 
992

 
2,976

 
2,976

Amortization of debt discount
1,691

 
1,527

 
4,946

 
4,466

Amortization of debt issuance costs
96

 
86

 
281

 
253

Total interest expense on the convertible senior notes
2,779

 
2,605

 
8,203

 
7,695

Total interest expense
$
3,095

 
$
2,743

 
$
9,181

 
$
8,092


NOTE 5 – FAIR VALUE MEASUREMENTS

The following table shows the fair value of the Company's financial instruments classified into the fair value hierarchy and measured on a recurring basis on the condensed balance sheets as of March 31, 2017:

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