; ForgeRock, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.21.2
Debt
9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Debt Debt
The following table presents total debt outstanding (in thousands, except interest rates):
September 30, 2021 December 31, 2020
Amount Interest Rate Amount Interest Rate
$10.0 million March 2019
$ 10,000  8.00  % $ 10,000  8.40  %
$10.0 million September 2019
10,000  8.00  % 10,000  9.20  %
$10.0 million December 2019
10,000  8.00  % 10,000  10.00  %
$10.0 million March 2020
10,000  8.00  % 10,000  10.00  %
Other debt —  120  6.23  %
Less: debt discount (549) (724)
Total debt, net of debt discount 39,451  39,396 
Less: short-term debt —  (58)
Total long-term debt $ 39,451  $ 39,338 

In September 2021, the Company executed an amendment to the Amended Restated Plain English Growth Capital Loan and Security Agreement with TriplePoint and TriplePoint Capital LLC (the “A&R Loan Agreement”), which amends and restates the 2016 Agreement. The payments on all cash advances are interest only. The amended A&R Loan Agreement became effective once the registration statement in connection with the initial public offering was declared effective on September 16, 2021. The key provisions of the amendment include: (1) a covenant requiring the maintenance of a $20.0 million cash balance when an event of default exits, (2) change in the interest rate for outstanding term loan to be eight percent (8.00%) per annum on the existing loans, (3) extension of the maturity dates by twenty-four months, (4) change in the prepayment penalties and (5) and a change in the prepayment premium. The principal will be due at the end of the term of the respective advance. The A&R Loan Agreement is secured by substantially all the Company’s assets, excluding its intellectual property, which was subject to a negative pledge. The A&R Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company, including, among other things, restrictions on indebtedness, liens, investments, dividends and other distributions.
The A&R Loan Agreement was accounted for as a modification and not an extinguishment as the terms of the Company’s outstanding debt were not substantially different from the original terms. The Company amortizes the debt issuance costs as interest expense using the effective interest method over the remaining term of the loan.

As of September 30, 2021 and December 31, 2020, accrued interest for the end-of term payments was $1.5 million and $1.0 million, respectively. The effective interest rate on debt was 8.46% and 11.44% for the nine months ended September 30, 2021 and year ended December 31, 2020, respectively. As of September 30, 2021, the Company was in compliance with the covenants set forth in the Amended and Restated Loan Agreement.
Future principal payments on outstanding borrowings as of September 30, 2021 are as follows:
Years ending:
2021 (3 months remaining)
$ — 
2022 — 
2023 — 
2024 — 
2025 30,000 
2026 10,000 
Total $ 40,000 

In connection with the issuance of the debt, the Company also entered into separate warrant transactions. As of September 30, 2021, all the warrants to acquire the Company’s redeemable convertible preferred stock had been exercised (see Note 12 Redeemable Convertible Preferred Stock and related warrants and option).