Note 10. Debt

Debt at December 31, 2016, consisted of the following (in thousands):

	December 31, 2016
	Principal			Unamortized Discount			Net Carrying Value
Loan and Security Agreement	$	19,499		$	(124	)	$	19,375
Less: debt - current		(7,013	)		79			(6,934	)
Debt - non-current	$	12,486		$	(45	)	$	12,441

Debt at December 31, 2015, consisted of the following (in thousands):

	December 31, 2015
	Principal			Unamortized Discount			Total
Loan and Security Agreement	$	20,000		$	(196	)	$	19,804
Less: debt - current		(3,050	)		94			(2,956	)
Debt - non-current	$	16,950		$	(102	)	$	16,848

Principal and interest payments on debt at December 31, 2016, are expected to be as follows:

Year ended December 31,	Principal		Interest		Total
2017		7,013		1,160		8,173
2018		8,178		613		8,791
2019		4,308		1,488		5,796
Total	$	19,499	$	3,261	$	22,760

Loan and Security Agreement

On June 30, 2014, the Company entered into a five year loan and security agreement with Oxford Finance LLC (the “Term Loan Agreement”) to borrow up to $30.0 million in term loans in three equal tranches (the “Term Loans”). On June 30, 2014, the Company received $10.0 million from the first tranche (“Term Loan A”). The second tranche of $10.0 million (“Term Loan B”) was drawn on June 15, 2015. On September 29, 2015, the Term Loan Agreement was amended to extend (i) the period in which the third tranche of $10.0 million (“Term Loan C”) could have been drawn and (ii) the interest-only period for all advances under the Term Loan Agreement. As a result, the accounting treatment for the Term Loan continued under the interest method, with a new effective interest rate based on revised cash flows calculated on a prospective basis upon the execution of the amendment to the Term Loan Agreement. As amended, the availability of Term Loan C was subject to the Company achieving consolidated trailing six months’ revenue at a specified threshold (the “Revenue Event”) no later than June 30, 2016. The Company did not achieve the Revenue Event by June 30, 2016, and therefore Term Loan C was not available to be drawn. Term Loan A bears an interest rate of 6.95%. Term Loan B bears an interest rate of 7.01%. Term Loans A and B mature on June 1, 2019. The Company was required to make interest only payments through June 2016, followed by thirty-six months of equal principal and interest payments thereafter. On July 28, 2016, the Term Loan Agreement was amended to include an additional interest-only period for all advances under the Term Loan Agreement. As amended, the Company is required to make interest only payments from August 2016 through January 2017, followed by twenty-nine months of equal principal and interest payments thereafter. The Company determined that the amendment to the Term Loan Agreement resulted in a modification. As a result, the accounting treatment for the Term Loan will continue under the interest method, with a new effective interest rate based on revised cash flows calculated on a prospective basis upon the execution of the amendment to the Term Loan Agreement. The Company is also required to make a final payment equal to 7% of the principal amounts of the Term Loans drawn payable on the earlier to occur of maturity or prepayment. The costs associated with the final payment are recognized as interest expense over the life of the Term Loans. The Company may prepay at any time the Term Loans subject to declining prepayment fees over the term of the Term Loan Agreement. The Company pledged all current and future assets, excluding its intellectual property and 35% of the Company’s investment in its subsidiary, Cerus Europe B.V., as security for borrowings under the Term Loan Agreement. The Term Loan Agreement contains certain nonfinancial covenants, with which the Company was in compliance at December 31, 2016.