5. 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, February 2015, October 2015, and April 2016 we entered into a First, Second, Third and Fourth 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 March 31, 2016, we have the ability to borrow under Tranche D. Our ability to borrow under Tranche C is conditioned upon meeting certain clinical trial milestones. The availability end date for Tranches C and D is September 30, 2016.

In connection with the Amended LSA, we borrowed $5.0 million available to us under Tranche B in December 2014. As of March 31, 2016, 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 June 2016. Commencing in July 2016 and continuing through June 2018, we are required to make monthly payments of 1/24th of our principal borrowings plus interest.

As of March 31, 2016, of our outstanding term loan balance of $7.0 million, $2.6 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 $119 thousand and $116 thousand for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, we had accrued interest of $39 thousand. There are no financial covenants associated with these term loans. As of March 31, 2016, 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 March 31, 2016, there was a balance of $253 thousand, which will be repaid in monthly installments through September 2016.