6. Notes Payable

In April 2014, we borrowed $2.0 million in connection with a term loan pursuant to a Loan and Security Agreement (LSA) we entered into with a financial institution. In connection with this term loan, we issued to the financial institution warrants to purchase 37,991 shares of our Series C Preferred Stock with a term of 8 years. The warrants were net exercised and converted into 220 shares of common stock in connection with the closing our initial public offering during the third quarter of 2014. Pursuant to the terms of the LSA, we made monthly interest-only payments for outstanding borrowings at an interest rate equal to the greater of (a) prime plus 2.25% or (b) 5.5% until the LSA was amended in December 2014.

In December 2014, we entered into a First Amendment to Loan and Security Agreement (Amended LSA) with the same financial institution. The Amended LSA increased the total term loan availability from $2.0 million to $12.0 million, available in four tranches (in thousands):

Tranche	Term Loan Available		Term Loan Borrowed		Borrowed Date
A	$	2,000	$	2,000	April 2014
B	5,000		5,000		December 2014
C	2,500		—		*
D	2,500		—		*
	$	12,000	$	7,000

* Our ability to borrow under the remaining tranches of $2.5 million each depends upon meeting certain clinical trial milestones. The availability end dates of Tranches C and D are September 1, 2015 and March 31, 2016, respectively.

In connection with the Amended LSA, we borrowed $5.0 million available to us under Tranche B. Pursuant to the terms of the Amended LSA, we are required to make monthly interest-only payments for all outstanding borrowings at an interest rate equal to the greater of (a) prime plus 3.25% or (b) 6.5% until December 2015. Commencing in January 2016 and continuing through December 2017, we are required to make monthly payments of 1/24th of our principal borrowings plus interest with the remaining principal balance due in December 2017. If we achieve certain clinical trial milestones by August 2015, both the interest-only period and principal maturity dates will be extended by six months.

As of December 31, 2014, our outstanding term loan balance of $7.0 million was classified as long-term debt on our balance sheet. In connection with the execution of both the LSA and Amended LSA, we paid debt costs to the financial institution of $25 thousand, which are being amortized into interest expense over the remaining term of the loans. Interest expense related to the loans was $117 thousand for the year ended December 31, 2014. As of December 31, 2014, we had accrued interest of $39 thousand. There are no financial covenants associated with these term loans. As of December 31, 2014, we were in compliance with all non-financial covenants.

Maturities of our debt obligations over the next five years are as follows (in thousands):

	Debt Maturities
2015	$	—
2016	3,500
2017	3,500
Total minimum lease payments	$	7,000