6. Notes Payable

In April 2014, we borrowed $2.0 million pursuant to a Loan and Security Agreement (LSA) we entered into with a financial institution. 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, and in February 2015 and October 2015 we entered into a Second and Third Amendment to Loan and Security Agreement (collectively, “the 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):


		Term Loan		Term Loan
Tranche		Available		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

*As of December 31, 2015, we have the ability to borrow under Tranche D. Our ability to borrow under Tranche C is conditioned upon meeting certain clinical trial milestones, which must be met by March 31, 2016. The availability end date for Tranches C and D is March 31, 2016.

In connection with the Amended LSA, we borrowed $5.0 million available to us under Tranche B in December 2014. As of December 31, 2015, and pursuant to the terms of the Amended LSA, we were required to make monthly interest-only payments for all outstanding borrowings at an interest rate equal to the greater of (a) prime rate plus 3.25% or (b) 6.5% until March 2016. Commencing in April 2016 and continuing through March 2018, we are required to make monthly payments of 1/24th of our principal borrowings plus interest. In January 2016, we achieved certain clinical trial milestones, that resulted in the extension of both the interest-only period and principal maturity dates by three months.

As of December 31, 2015, of our outstanding term loan balance of $7.0 million, $1.8 million will be due within the next twelve months, and is classified as the current portion of notes payable on our balance sheet. Interest expense related to the term loans was $461 thousand and $117 thousand for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, we had accrued interest of $39 thousand. There are no financial covenants associated with these term loans. As of December 31, 2015, we were in compliance with all non-financial covenants.

Vendor Debt

In August 2015, the Company entered into a short-term loan agreement with a third-party vendor to finance insurance premiums. The aggregate amount financed under this agreement was $584 thousand. As of December 31, 2015, there was a balance of $378 thousand, which will be repaid in monthly installments through September 2016.

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


	Debt Maturities
2016	$	2,128
2017		3,500
2018		1,750
Total maturities	$	7,378