Note 5 - Debt

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

5.

DEBT

Term Loan Facility

On

August 9, 2017,

the Company entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) that provides for a Term Loan Facility (the “Term Loan Facility” and all amounts borrowed thereunder, the “Term Loan”). Under the Term Loan Facility, the Company borrowed an initial amount of

$7.5

million. The Company had the right to borrow an additional

$7.5

million on or before

December 31, 2018;

this right expired unexercised.

The Term Loan Facility carries interest at a floating rate of

4.0%

above the prime rate per annum (for a total interest rate of

8.8%

at

December 31, 2019),

with interest payable monthly. The monthly payments will consist of interest-only for the

first

18

months, after which the Term Loan will be payable in

24

equal monthly installments of principal, plus accrued interest. All outstanding principal and accrued and unpaid interest under the Term Loan will be due and payable on

February 9, 2021.

Once repaid, the Term Loan

may

not

be reborrowed.

The Company

may

elect to prepay the Term Loan Facility prior to the maturity date subject to a prepayment fee equal to

3.0%

of the then outstanding principal balance if the prepayment occurs within

one

year of the funding date,

2.0%

of the then outstanding principal balance if the prepayment occurs during the

second

year following the funding date, and

1.0%

of the then outstanding principal balance if the prepayment occurs after the

second

anniversary of the funding date. The Term Loan Facility includes a final payment fee equal to

8.0%

of the original principal amount. The final payment fee is being accrued using the effective interest method over the period of the Term Loan Facility.

The Term Loan Facility is collateralized by substantially all of the Company’s assets, including the Company’s intellectual property. The Term Loan Facility also contains certain restrictive covenants that limit the Company’s ability to incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, make certain investments, pay dividends, transfer or dispose of assets, amend certain material agreements or enter into various specified transactions, as well as financial reporting requirements. The Term Loan Facility contains customary events of default, including bankruptcy, the failure to make payments when due, the occurrence of a material impairment on the lenders’ security interest over the collateral, and a material adverse change. Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by the Company would begin to bear interest at a rate that is

5.00%

above the rate effective immediately before the event of default and

may

be declared immediately due and payable by SVB.

In connection with entry into the Term Loan Facility, the Company issued to SVB and

one

of its affiliates, stock purchase warrants to purchase an aggregate of

58,502

shares of the Company’s common stock at an exercise price of

$6.41

per share. The warrants are immediately exercisable, have a

10

-year term, contain a cashless exercise provision, and are classified in equity. The relative fair value of the warrants, net of issuance costs, which was recorded as debt discount of

$304,201

on the date of issuance.

At

December 31, 2019

and

2018,

$4.4

million and

$7.5

million, respectively, of face value of the Term Loan was presented in the accompanying consolidated balance sheets net of current unamortized discounts and issuance costs of

$91,879

and

$215,291,

and long-term unamortized discounts and issuance costs of

$2,735

and

$94,615,

respectively.

Total interest expense recognized for the years ended

December 31, 2019

and

2018

was

$1.0

million and

$1.1

million, respectively.