Long-term Debt

Loan and Security Agreement

The Company’s Amended and Restated Loan and Security Agreement with Silicon Valley Bank (“SVB”) (the “SVB Loan and Security Agreement”) includes (i) term loans, (ii) revolving line of credit, and (iii) Mezzanine Loan. The term loans have interest at a floating rate per annum equal to prime plus 0.75%. The revolving line of credit has interest between 4.25% to 5.00% depending on the Company’s consolidated leverage ratio. The Mezzanine Loan remained unused by the Company and was canceled upon its expiration in May 2017.

The outstanding balance on the term loans was $4.4 million as of October 1, 2017. The Company has an undrawn balance on the revolving line of credit of $20.0 million which can be drawn subject to 80% of eligible accounts receivable.

The agreement contains usual and customary events of default upon the occurrence of certain events, such as nonpayment of amounts due under the revolving line of credit or the term loans, violation of the restrictive covenants, violation of other contractual provisions, or a material adverse change in its business. The agreement includes customary administrative covenants, including a prohibition on declaring dividends, but does not include any financial maintenance or operating related covenants.

The SVB Loan and Security Agreement is collateralized by certain of the Company’s assets, including pledges of certain of the Company’s equity interests in its subsidiaries, receivables and inventory, subject to customary exceptions and limits. The SVB Loan and Security Agreement contains customary events of default upon the occurrence of certain events, such as nonpayment of amounts due under the revolving line of credit or the term loans, violation of restrictive covenants, violation of other contractual provisions, or a material adverse change in the Company’s business. In addition, the credit facilities prohibit the payment of cash dividends on the Company’s capital stock and also place restrictions on mergers, sales of assets, investments, incurrence of liens, incurrence of indebtedness and transactions with affiliates. The SVB Loan and Security Agreement has certain prepayment premium upon repayment before the maturity date.

As of October 1, 2017, future minimum payments for the long-term debt are as follows (in thousands):



	Long-term debt

2017	$	694
2018	2,383
2019	1,618
Total minimum payments	4,695
Less: Amount representing interest	(185		)
Less: Amount representing closing and repayment fees	(210		)
Present value of minimum payments	4,300
Less: Unamortized debt discounts	(66		)
Plus: Accretion of closing and repayment fees	153
Long-term debt, net	4,387
Less: Long-term debt, current portion	(2,487		)
Non-current portion of long-term debt	$	1,900