3. Debt, Commitments and Contingencies

Term Loan

In November 2016, we entered into a loan and security agreement (the Loan Agreement) with Silicon Valley Bank (SVB) and Solar Capital Ltd. (Solar) to borrow up to $20.0 million, issuable in three separate tranches of $10.0 million, $5.0 million and $5.0 million, respectively. The first tranche of $10.0 million was funded on November 18, 2016 (Term A Loan). Under the Term A Loan, we received cash proceeds of $7.3 million, net of a $2.6 million repayment of the principal, accrued interest and the $0.5 million final payment under our previous $10.0 million loan and security agreement with SVB (SVB Loan). We did not pay any termination or other fees in connection with the repayment of amounts due under the SVB Loan.

In June 2017, we entered into an amendment of the Loan Agreement which modifies certain conditions under which we may receive and repay term loans under the Loan Agreement. The Loan Agreement, as amended, provides that (i) up to $5.0 million in the second tranche of term loans could be drawn down by us at any time before the earlier of June 30, 2017 or an event of default, at our discretion, and (ii) an additional $5.0 million in the third tranche of term loans may be drawn down by us at any time after June 30, 2017 and before the earlier of December 31, 2017 or an event of default, at our discretion, subject to achievement of certain milestones. In connection with the amendment to the Loan Agreement, the second tranche of $5.0 million was funded on June 30, 2017 (Term B Loan). We received cash proceeds of $4.9 million, net of debt issuance cost of $0.1 million. If we fail to meet certain milestones set forth in the Loan Agreement, as amended, by August 31, 2017, then we will be required to secure the Term B Loan with $5.0 million of cash until such time that those milestones are met. If such milestones are not met by October 31, 2017, we have the option to maintain the cash security for the Term B Loan or prepay the Term B Loan without the prepayment fee described below.

Pursuant to the Loan Agreement, as amended, we are obligated to make interest only payments through December 1, 2017, followed by consecutive equal monthly payments of principal and interest in arrears through the maturity date of November 18, 2020. The interest only payments will be extended to June 1, 2018 upon achievement of certain milestones as set forth in the Loan Agreement, as amended. The Term A Loan and Term B Loan (collectively, the Term Loans) bear interest at the prime rate, as reported in The Wall Street Journal on the last date of the month preceding the month in which interest will accrue, plus 4.10%. A final payment equal to 8.75% of the funded amounts is payable when the Term Loans become due or upon the prepayment of the respective outstanding balance. We have the option to prepay the outstanding balance of the loan in full, subject to a prepayment fee ranging from 1.0% to 3.0% depending upon when the prepayment occurs, including any non-usage fees. The Loan Agreement, as amended, provides for a 2.0% non-usage fee for any unfunded amount in the event we do not draw the third tranche, payable no later than the expiration date for the third tranche, as applicable, or the date of cancellation of the loan due to prepayment or an event of default. No such events have occurred or are anticipated as of June 30, 2017.

As of June 30, 2017, the carrying value of our Term Loans consist of $15.0 million principal outstanding less the debt issuance costs of $0.7 million. The debt issuance costs have been recorded as a debt discount of long-term debt in our balance sheet, which are being accreted to interest expense over the life of the Term Loans. The final maturity payment of $1.3 million is being accrued over the life of the Term Loans through interest expense.

In connection with the Term A Loan, we issued warrants to each of SVB and Solar to purchase an aggregate of 47,771 shares of our common stock with an exercise price of $3.14 per share. In connection with the Term B Loan, we issued warrants to each of SVB and Solar to purchase an aggregate of 20,833 shares of our common stock with an exercise price of $3.60 per share. The warrants are immediately exercisable and have a maximum contractual term of seven years.

Future principal payments for the Term Loan and the final payment are as follows (in thousands):

	June 30, 2017
2017	$	370
2018		4,628
2019		5,023
2020		6,292
	$	16,313

Facility Lease

In December 2011, we entered into a noncancelable operating lease that included certain tenant improvement allowances and is subject to base lease payments, which escalate over the term of the lease, additional charges for common area maintenance and other costs. In January 2017, we extended the lease for two years to May 2019.

In April 2017, we amended our facility lease to include an additional 7,411 square feet through May 2019 for a total additional commitment of $0.7 million.

Rent expense for the three months ended June 30, 2017 and 2016 was $0.3 million and $0.1 million, respectively. Rent expense for the six months ended June 30, 2017 and 2016 was $0.4 million and $0.2 million, respectively.

Future minimum payments under the non-cancelable operating lease as of June 30, 2017 were as follows (in thousands):

	Operating Lease
2017	$	543
2018		1,108
2019		420
	$	2,071

Research Agreements and Funding Obligations (Related Party Transactions)

We provide funding to The Scripps Research Institute (TSRI) pursuant to a research funding and option agreement to conduct certain research activities. We have entered into additional amendments to our research funding and option agreement in 2016 and 2017 to provide additional funding to TSRI through March 31, 2017. For the three months ended June 30, 2017 and 2016, the additional funding expense recorded for TSRI was $0.2 million and $0.2 million, respectively. For the six months ended June 30, 2017 and 2016, the additional funding expense recorded for TSRI was $0.5 million and $0.4 million, respectively. Paul Schimmel, Ph.D., a member of our board of directors, is a board and faculty member at TSRI and such payments fund a portion of his research activities conducted at TSRI.

During the three months ended June 30, 2017 and 2016, we provided charitable donations to the National Foundation for Cancer Research of $0.1 million and $0.1 million, respectively. During the six months ended June 30, 2017 and 2016, we provided charitable donations to the National Foundation for Cancer Research of $0.2 million and $0.2 million, respectively. We have requested that the donations be restricted to certain basic research in cancer biology and therapeutics, a portion of which funds research activities conducted at TSRI in the laboratory of Dr. Schimmel.