Subsequent Events

Corporate Restructuring

In July 2018, we implemented a corporate restructuring to streamline our operations, reduce our operating expenses, extend our cash runway and focus our resources on our most promising programs. In connection with the restructuring, we committed to a reduction in our total workforce by approximately 60%, to approximately 30 employees. The restructuring was approved by our Board of Directors on July 3, 2018 and affected employees were informed on July 5, 2018. We substantially completed the workforce reduction in July 2018 and severance payments are expected to be paid in full by the end of the third quarter of 2018.

We estimate that we will record net charges of approximately $0.8 million for employee severance and other related termination benefits and less than $0.1 million in net one-time, non-cash stock-based compensation charges due to the acceleration of outstanding stock options, in accordance with executive employment agreements, partially offset by the reversal of expense previously recognized for stock options that were cancelled upon termination.

Term Loan Amendment

On August 6, 2018, we and Oxford entered into an amendment to the parties’ Loan Agreement, dated June 17, 2016, as amended. Under the terms of the amendment, we are required to make payments of interest-only for an additional three-month period, commencing August 2018 through October 2018. Amortization payments will recommence in November 2018. In addition, the amendment contains a minimum cash reserve covenant, whereby the Company will be required to maintain aggregate cash reserves of not less than 110% of the principal balance of the Term Loan that would be outstanding on such date that our then-held cash reserves would first be completely exhausted. In the event we reduce the principal balance of the Term Loan to $10.0 million or less on or before November 1, 2018, the cash reserve covenant described above would no longer apply. There were no changes to the maturity date of the Term Loan, which is June 2020. Pursuant to the amendment, we granted the Lender a security interest in our intellectual property as additional collateral for the repayment of the Term Loan.

Future principal payments for the Term Loan due under the Loan Agreement, which reflect the August 2018 amendment, are as follows (in thousands):



2018	$	1,917
2019	11,500
2020	5,750
	$	19,167