Long-term Debt

Senior Secured Loan Facility

In February 2018, the Company entered into the Loan and Security Agreement, dated as of February 28, 2018 (as amended, the “Loan

Agreement”), with Oxford Finance LLC, as the collateral agent and a lender (“Oxford”), and Silicon Valley Bank, as a lender (“SVB”,

and together with Oxford, the “Lenders”) which provided for a senior secured loan facility of up to an aggregate principal amount of $45.0 million. The first tranche was $20.0 million and was drawn down in February 2018 (the "2018 Term A Loan"). The second tranche was $15.0 million and was drawn down in September 2018 (the "2018 Term B Loan"). The interest rate under the Loan Agreement was the thirty-day U.S. LIBOR rate plus 6.75%, which was 8.84% as of September 13, 2019, the date of repayment of the amounts outstanding under the Loan Agreement. Payments on the Loan Agreement were interest only for the first 24 months. The Company also issued warrants to the Lenders to purchase common stock, which is further discussed in Note 9, "Warrants."

On September 10, 2019, the Company entered into an Amended Loan Agreement with the Lenders which amended and restated the Loan Agreement. Under the Amended Loan Agreement, the Lenders will extend up to $85.0 million in term loans to the Company in three tranches. The initial tranche of $60.0 million (the “Term A Loan”) was drawn down on September 13, 2019. The second tranche of $15.0 million (the “Term B Loan”) and the third tranche of $10.0 million (the “Term C Loan”) will become available to the Company upon the achievement of certain revenue targets prior to March 31, 2021 and June 30, 2021, respectively. The 2018 Term A Loan and 2018 Term B Loan and the related final payment fee of $2.3 million were repaid in conjunction with the execution of the Amended Loan Agreement.

The Amended Loan Agreement provides for interest-only payments through March 31, 2021, after which the principal will be payable in 27 equal monthly installments. However, if the Term B Loan is funded, then the period for interest-only payments is extended through December 31, 2021, after which the principal will be payable in 30 equal monthly installments. If the Term C Loan is funded, then the period for interest-only payments is further extended through September 30, 2022, after which the principal will be payable in 21 equal monthly installments. The maturity date is June 1, 2023, provided that if the Term B Loan is funded, then the maturity date will be extended to June 1, 2024. After repayment, no loans may be reborrowed. For the period from the funding date of the Term A Loan through and including December 31, 2019, the loans incurred interest at a rate of 8.68%. Following such time, the loans shall incur interest at a floating per annum rate in an amount equal to the sum of 6.25% plus the greater of (a) 2.43% and (b) the thirty-day U.S. Dollar LIBOR rate. The Company incurred total debt issuance costs of $1.9 million related to the Amended Loan Agreement, which are reflected as a direct reduction to the term loan balance and are being amortized into interest expense over the life of the loan using the effective interest method.

Pursuant to the Amended Loan Agreement, the Company provided a first priority security interest in substantially all of the Company’s assets, including intellectual property, subject to certain limited exceptions.

The Amended Loan Agreement allows the Company to voluntarily prepay the outstanding amounts thereunder, but not less than $2.0 million of the outstanding principal at any time. Prior to April 1, 2021, the Company is subject to a prepayment fee equal to 1.50% of the principal amount being prepaid. In the event the Company draws down the second or third tranche, the period subject to the 1.50% prepayment fee is extended to January 1, 2022 and October 1, 2022, respectively. A final payment fee of 3.0% multiplied by the original principal amount of each tranche drawn is due upon the earlier to occur of the maturity date of the Amended Loan Agreement, the acceleration of the Amended Loan Agreement or prepayment of such borrowings and is recorded in other liabilities on the consolidated balance sheets.

The Amended Loan Agreement contains customary representations and warranties, events of default (including an event of default upon a material adverse change of the Company) and affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to incur additional indebtedness, grant liens, merge or consolidate, make acquisitions, pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter into certain transactions with affiliates, in each case subject to certain exceptions.

The components of debt are as follows:



(in thousands)	December 31, 2019			December 31, 2018

2018 Term A Loan	$	—		$	20,000
2018 Term B Loan	—			15,000
Term A Loan	60,000			—
Principal amount of long-term debt	60,000			35,000
Less: Unamortized deferred costs	(1,695		)	(3,110		)
Long-term debt	$	58,305		$	31,890

The following table sets forth the Company’s future minimum principal payments (in thousands):



2019	$	0
2020	0
2021	20,000
2022	26,700
2023	13,300
	$	60,000

For the year-to-date period ended December 31, 2019, the Company recognized interest expense of $7.2 million, of which $0.9 million related to the amortization of debt issuance costs. Included in such interest expense is a loss on extinguishment of debt of $2.3 million relating to the write-off of the remaining balance of unamortized debt issuance costs associated with the Loan Agreement. For the year ended December 31, 2018, the Company recognized interest expense of $2.5 million, of which $0.6 million was related to the amortization of debt issuance costs.