Term Loans and Debt

12 Months Ended

Dec. 31, 2019

The Company entered into a loan and security agreement with, and issued warrants to purchase shares of Series G redeemable convertible preferred stock to Western Technology Investments (WTI) in June 2017 (First WTI Loan Facility), which provided for a secured credit facility of up to $60.0 million of term debt. In May 2018, the Company entered into a second loan and security agreement with WTI which provided up to $15.0 million of term debt (Second WTI Loan Facility, and together with the First WTI Loan Facility, WTI Loan Facilities) and issued additional warrants to purchase shares of Series G redeemable convertible preferred stock. The WTI Loan Facilities were collateralized by substantially all of the Company's assets and intellectual property rights.

The key terms and details of the Company's term loan borrowings under the WTI Loan Facilities were as follows:


Borrowing Date	Loan Facility	Loan Amount (in thousands)		Maturity Date	Contractual Interest Rate		Effective Interest Rate
September 2017	First WTI Facility	$	30,000	February 2022	11.5	%	15.9	%
March 2018	First WTI Facility	$	30,000	September 2022	11.8	%	14.8	%
May 2018	Second WTI Facility	$	15,000	November 2022	12.0	%	14.7	%

For all borrowings, monthly payments of interest were due for the first 24 months and equal monthly installments of principal and interest were due for 30 months thereafter.

The Second WTI Loan Facility included a contingent prepayment feature under which if the Company consummated a qualified public offering within the first 24 months of the term loan and the Company prepaid the term loan within 15 days of the qualified public offering, the Company would be required to repay the outstanding principal balance plus accrued interest within 15 days of the consummation of a qualified public offering plus an additional amount equal to 50% of all interest that would have been incurred through the end of first 24 months of the loan. In connection with the Second WTI Loan Facility, the Company modified the terms of the First WTI Loan Facility so that the March 2018 loan would be subject to the same contingent prepayment feature that is included in the Second WTI Loan Facility. The Company determined that the contingent prepayment features under the WTI Loan Facilities were embedded derivatives, requiring bifurcation and separate accounting. The Company recorded a $2.1 million gain related to the change in fair value of the term loan embedded derivative asset, which is included within other income (expense), net on the consolidated statements of operations in the year ended December 31, 2018.

In September 2018, five days after the completion of the IPO, the Company exercised its prepayment option and fully repaid all amounts outstanding under the WTI Loan Facilities. The Company recorded a loss on debt extinguishment related to the WTI Loan Facilities of $17.2 million during the year ended December 31, 2018, and when coupled with the gain on debt extinguishment discussed in Note 8, recorded a net loss on debt extinguishment of $0.2 million for the year ended December 31, 2018.

In September 2018, the Company entered into a senior secured credit facility with a syndicate of banks consisting of $75.0 million aggregate principal amount of term loans (New Term Loans) and a $75.0 million revolving credit facility (New Revolving Credit Facility, and together with the New Term Loans, New Credit Facilities). The New Term Loans were fully funded in September 2018 and the Company received cash proceeds of $73.6 million, net of arrangement fees of $1.1 million and upfront fees of $0.3 million.

The New Term Loans were scheduled to amortize at a rate of 7.5% per annum for the first two years of the New Credit Facilities, 10.0% per annum for the third and fourth years and the first three quarters of the fifth year of the New Credit Facilities, with the balance due at maturity. The New Credit Facilities had maturity dates on the fifth anniversary of the effective date. The New Revolving Credit Facility had a commitment fee which accrued at 0.40% on the daily unused amount of the aggregate revolving commitments of the lenders. All outstanding amounts under the New Credit Facilities bore interest, at the Company's option, at (i) a reserve adjusted LIBO Rate plus a margin between 2.25% and 2.75% or (ii) a base rate plus a margin between 1.25% and 1.75%, in each case determined on a quarterly basis based on the Company's consolidated total leverage ratio.

In September 2019, the Company elected to prepay the outstanding principal balance of the New Term Loans in their entirety and terminated the New Credit Facilities. The Company paid $63.0 million, which consisted of $62.2 million of debt principal and $0.8 million of accrued interest and fees. The Company recorded a loss on debt extinguishment related to the termination of the New Credit Facilities of $1.7 million during the year ended December 31, 2019.

The Company had no outstanding debt as of December 31, 2019.

Term loans consisted of the following as of December 31, 2018 (in thousands):


Outstanding principal balance	$	73,594
Less: Unamortized discount and debt issuance costs	(872)
Total term loan, net	$	72,722

Current portion of term loans	$	5,635
Term loans	67,087