Debt

Michigan Strategic Fund (MSF) Loan

On December 31, 2007, the Company entered into a promissory note agreement with MSF whereby the Company could borrow up to $0.4 million. Interest on the note accrued at 1% per year on borrowings outstanding under the agreement. Per the terms of the promissory note, no payments were required until December 31, 2012, at which time accrued and unpaid interest would be added to the then outstanding principal. Interest would then accrue on the restated principal amount and was payable over 59 months starting January 1, 2013. The note was secured by all tangible personal property owned by the Company. If the Company ceased to have substantially all of its employees or operations located in Michigan or failed to comply with other terms as defined in the promissory note agreement, MSF could have declared the entire indebtedness, plus a 7% premium of the then-outstanding balance of the note, due and payable immediately.

On December 18, 2012, the Company and the MSF entered into an amendment to the promissory note agreement in which the MSF was granted the right to convert the outstanding indebtedness into equity of the Company upon the occurrence of certain events, including a qualified financing. Also, under the terms of the amended promissory note, all accrued but unpaid interest as of January 1, 2013 was added to the then outstanding principal, with the restated principal accruing interest at 5%. Under the terms of the amended promissory note, the Company would be obligated to make payments on the restated principal on January 1, 2015 in monthly equal installments over 48 months if a qualified financing did not occur. The Company accounted for the amendment in 2012 as an extinguishment.

The outstanding principal on the promissory note payable was $0.4 million and accrued interest totaled $21,000 as of December 31, 2013.

On January 10, 2014, the outstanding principal and accrued interest of $0.4 million on the promissory note was extinguished on the Company’s closing of a Series C redeemable convertible preferred stock financing. On closing, the outstanding principal and accrued interest on the promissory note was converted into 82,927 shares of the Company’s Series C redeemable convertible preferred stock at a price per share of $5.215.

Convertible Promissory Note Financing

On March 1, 2012, the Company entered into a convertible promissory note financing pursuant to which certain investors agreed to loan the Company up to $1.0 million. The convertible promissory notes accrued interest at 8% and would automatically convert into shares of the Company’s next issued series of convertible preferred stock upon the closing of a preferred stock financing of a specified size. Investors also had the option to convert notes outstanding to convertible preferred stock if a change of control or IPO occurred. On October 1, 2012, the Company and the holders of the convertible promissory notes agreed to increase the total loan amount to up to $3.0 million and extend the maturity date of the notes to June 30, 2013. On November 13, 2012, the Company and the holders of the notes agreed to increase the total loan amount to up to $5.0 million, extend the maturity date of the notes to December 31, 2013, and offer to the note holders who matched their total investment through November 1, 2012, and all note holders subsequent to November 1, 2012, a conversion premium of 50%.

The Company issued convertible promissory notes for an aggregate principal amount of $5.0 million on various dates in 2012 and 2013. The investors that held notes dated prior to November 1, 2012, also received warrants to purchase additional shares of redeemable convertible preferred stock which met the requirements for liability classification. The estimated fair value of the warrants at issuance was recorded as a discount on the notes and amortized into interest expense over the expected life of the promissory notes. The holders of certain promissory notes dated prior to November 1, 2012, and all holders of promissory notes dated after November 1, 2012, received the benefit of a premium on conversion into Series C preferred stock at the time of their issuance. The Company determined that the embedded conversion feature met the definition of an embedded derivative at inception. This derivative expired prior to December 31, 2013. The fair value of this derivative at December 31, 2012 was $0.8 million and resulted in a discount on the short-term promissory notes. This discount was amortized to interest expense during the year ended 2013, the estimated term of the notes. During the year ended December 31, 2013, the Company recorded $0.8 million of interest expense related to the discount created by the embedded derivative. The Company recognized an additional $1.6 million of interest expense for the premium conversion feature on newly issued convertible promissory notes during the year ended December 31, 2013.

On December 20, 2013, the convertible promissory notes were extinguished in their entirety on the Company’s closing of a Series C redeemable convertible preferred stock financing. On closing, the Company issued an aggregate 1,495,276 shares of Series C redeemable convertible preferred stock at a per share price of $5.125 on conversion of the convertible promissory notes into shares of Series C redeemable convertible preferred stock. The Company issued Series C redeemable convertible preferred stock worth $7.8 million in settlement of all convertible promissory note obligations of which $5.0 million related to the outstanding principal obligations, $0.4 million in accrued interest and $2.4 million for settlement of the beneficial conversion feature.

As of December 31, 2013, there were no outstanding borrowings on the convertible promissory notes.