8.	Term loan:

On June 12, 2018, the Company entered into a First Loan Modification Amendment (the “Modification”) to its Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”), (together, the “Modified Loan Agreement”), pursuant to which the Bank accelerated the availability of the second tranche of $5,000 which was funded on the date of the Modification.

The initial tranche of $7,000, which was funded in December 2017, and the second tranche are interest-only until September 30, 2018 or, subject to the achievement of certain clinical milestones (the “Interest-Only Milestone”), March 31, 2019. Following the expiration of the interest-only period, the first tranche will be payable in 30 equal monthly installments or, if the Interest-Only Milestone is achieved, 24 equal monthly installments of principal plus interest, maturing on March 31, 2021. The second tranche will be payable in 24 equal monthly installments or, if the Interest-Only Milestone is achieved, 18 equal monthly installments of principal plus interest, maturing on September 30, 2020. The interest and payment terms of the third and final tranche, if borrowed, remain unchanged from the Loan Agreement. The Modification did not amend the Loan Agreement’s interest provisions.

At June 30, 2018, the Company determined the effective interest rate on the Modified Loan Agreement with the Bank to be 10.24% (December 31, 2017 – 9.25%). Amortization of the debt discount was $92 and $164 for the three and six months ended June 30, 2018, respectively. Interest payments are made monthly.

Interest expense was $200 and $359 for the three and six months ended June 30, 2018, respectively.

On August 3, 2018, the Company entered into an Amended and Restated Loan and Security Agreement (the “Amended and Restated Loan Agreement”) with the Bank, pursuant to which the Bank agreed to extend a term loan to the Company with a principal amount of $15,500 (the “Term Loan”). For additional information regarding the Amended and Restated Loan Agreement, refer to subsequent event note 12b. The Term Loan will be used in part to repay amounts borrowed under the Modified Loan Agreement and will extend the interest-only period from September 30, 2018 to March 31, 2020. The classification of the loan payable on the consolidated balance sheet and outstanding balances in the tables below as of June 30, 2018 reflect the repayment terms under the Amended and Restated Loan Agreement.

The outstanding loan and unamortized debt discount balances as of June 30, 2018 in accordance with the repayment terms under Amended and Restated Loan Agreement are as follows:

	June 30,
	2018
Term loan	$	12,000
Less: unamortized discount on loan		(389	)
Less: current portion		—
Accrued portion of final payment fee		110
Loan payable, long-term	$	11,721

Scheduled principal payments on outstanding debt, excluding the final payment fee of $780, as of June 30, 2018 in accordance with the repayment terms under Amended and Restated Loan Agreement, are as follows:

2018	$	—
2019		—
2020		3,600
2021		4,800
2022		3,600
Total	$	12,000

The Modified Loan Agreement contains affirmative and negative covenants, including, among others, covenants that limit or restrict the Company’s ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into certain transactions with affiliates, engage in any new line of business, pay dividends or make distributions, or repurchase stock, in each case subject to certain exceptions. The Company is in compliance with these covenants at June 30, 2018.

In connection with the Modification, the number of common shares exercisable pursuant to the warrant issued to the Bank in December 2017 under the Loan Agreement increased by 36,008 common shares. The relative fair value of the additional common shares exercisable pursuant to the warrant was $247 and is classified in equity. With this increase, at June 30, 2018, the Company has a warrant outstanding to the Bank to purchase a total of 86,419 of the Company’s common shares at a price per common share of $2.43. The warrant is immediately exercisable, has a 10-year term, and contains a cashless exercise provision.