In December 2017, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”) under which the Company was funded an initial tranche of $7,000. In June 2018, the Company entered into a First Loan Modification Amendment (the “Modification”) to the Loan Agreement (together, the “Modified Loan Agreement”), pursuant to which the Bank accelerated the availability of a second tranche of $5,000 which was funded on the date of the Modification. Amounts funded under the Modified Loan Agreement were 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 was payable in 30 equal monthly installments or, if the Interest-Only Milestone was achieved, 24 equal monthly installments of principal plus interest, maturing on March 31, 2021. The second tranche was payable in 24 equal monthly installments or, if the Interest-Only Milestone was 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, remained unchanged from the Loan Agreement. The Modification did not amend the Loan Agreement’s interest provisions.

In August 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”). The Term Loan was used to repay in full outstanding borrowings of $12,000 under the Modified Loan Agreement and a payment of $485, which represented the current portion of the final payment fee due under the Modified Loan Agreement, as well as for working capital and other general corporate purposes, including the advancement of the Company’s clinical development programs. The Term Loan accrues interest at a floating per annum rate of 0.5% above the prime rate, which is payable monthly commencing in September 2018. The Term Loan is interest-only until March 31, 2020, followed by 30 equal monthly installments of principal plus interest, maturing on September 1, 2022. In addition, the Company is required to pay a final payment fee of 6.5% of the Term Loan on the date on which the term loan is prepaid, paid or becomes due and payable in full.

The Company may prepay all, but not less than all, of the Term Loan subject to a prepayment fee of $295, which represents the deferred portion of the final payment fee due under the Modified Loan Agreement, plus 3.0% if prepaid prior to the first anniversary of the effective date of the Amended and Restated Loan Agreement, 2.0% if prepaid on or after the first anniversary, but prior to the second anniversary, or 1.0%, if prepaid on or after the second anniversary but prior to the maturity date. As security for its obligations under the Amended and Restated Loan Agreement, the Company granted the Bank a first priority security interest on substantially all of the Company’s assets except its intellectual property and subject to certain other exceptions.

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 (the “December 2017 Warrant”) increased by 36,008 common shares. The relative fair value of the additional common shares exercisable pursuant to the December 2017 Warrant was $247 and was classified in equity. With this increase, the December 2017 Warrant allowed 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 December 2017 Warrant was immediately exercisable, had a 10-year term, and contained a cashless exercise provision. In connection with the entry into the Amended and Restated Loan Agreement, the maximum number of common shares exercisable pursuant to the December 2017 Warrant was fixed at 86,419 at a price per common share of $2.43. In September 2018, the Company issued 72,325 common shares for the cashless exercise of the December 2017 Warrant.

In connection with the Amended and Restated Loan Agreement, the Company issued a new warrant to the Bank to purchase 40,000 of the Company’s common shares at a price per common share of $9.79. The relative fair value of the common shares exercisable pursuant to this warrant was $291 and was classified in equity. The warrant is immediately exercisable, has a 10-year term and contains a cashless exercise provision. This warrant remains outstanding at December 31, 2018.

The debt proceeds were allocated based on the relative fair values of the debt instrument and the warrant instrument. The fair value of the warrant and the closing costs were recorded as debt discounts and are being amortized using the effective interest rate method over the term of the loan. At December 31, 2018, the Company determined the effective interest rate on the Amended and Restated Loan Agreement with the Bank to be 9.53% (2017 - 9.25%). Amortization of the debt discount and accretion of the final payment fee was $284 for the year ended December 31, 2018 (2017 - $11). Interest payments are made monthly.

The outstanding loan and unamortized debt discount balances as of December 31, 2018 in accordance with the repayment terms under Amended and Restated Loan Agreement are as follows:

	December 31,
	2018			2017
Term loan	$	15,500		$	7,000
Less: unamortized discount on loan		(600	)		(203	)
Less: current portion		—			(700	)
Accrued portion of final payment fee		114			7
Loan payable, long-term	$	15,014		$	6,104

Scheduled principal payments on outstanding debt as of December 31, 2018, excluding the final payment fee of $1,008, are as follows:

2019	$	—
2020		5,167
2021		6,200
2022		4,133
Total	$	15,500

The Amended and Restated Loan Agreement contains customary representations and warranties, events of default (including an event of default upon the occurrence of a material impairment on the Bank’s security interest over the collateral, and a material adverse change of the Company) and 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. Upon the occurrence and during the continuance of an event of default, a default interest rate will apply that is 5.0% above the otherwise applicable interest rate. The Company is in compliance with these covenants at December 31, 2018.