Long-Term Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-Term Debt

4. Long-Term Debt

On October 26, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank. The Loan Agreement provided for loan advances of up to $10.0 million. The first advance (the “Term A Loan”) of $5.0 million was available for draw down by the Company as of the effective date of the Loan Agreement. The remaining $5.0 million under the facility was never drawn down and is no longer available for draw. Interest on the loan advances is payable monthly at a floating per annum rate equal to the greater of 1.5% above the prime rate or 6.5%. Upon the occurrence of an event of default, interest will increase to 5.0% above the rate that is otherwise applicable. The maturity date of the loan advances is May 1, 2022. The effective interest rate of the Term Loan approximates its stated interest rates.

Principal on the Term A Loan is repayable commencing on December 1, 2019 in 30 monthly payments through maturity. In addition to regular monthly payments, a final payment equal to the original principal amount of the Term Loans multiplied by 5.0% is due on the earliest to occur of (a) May 1, 2022 or (b) the prepayment in full of the term loan advances. The Company has the option to prepay the term loan advances with a prepayment premium of 3.0% of the outstanding principal if prepayment is made prior to October 26, 2019, 2.0% of the outstanding principal if prepayment is made after October 26, 2019 but before October 26, 2020, and 1.0% of the outstanding principal if prepayment is made after October 26, 2020 but before May 1, 2022. The repayment of term loan advances will be accelerated upon occurrence of an event of default. The Loan Agreement contains customary affirmative and negative covenants and events of default, including covenants and restrictions that among other things, restrict the ability of the Company to incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales or sale and leaseback transactions, and declare dividends or redeem or repurchase capital stock.

As of December 31, 2021, the Term A Loan advances, net of debt discount and debt issuance costs, were $1.1 million and are included in current portion of long-term debt on the Company’s balance sheets.

As of December 31, 2021, the future contractual maturities of debt by fiscal year are as follows (in thousands):

2022	$	833
Total future maturities of debt	$	833

In accordance with the terms of the Loan Agreement, on October 26, 2018, the Company issued warrants to purchase 10,232 shares of the Company’s common stock at an exercise price of $1.04 per share with a term of 10 years. The fair value of the warrants of less than $0.1 million (estimated using the Option Pricing Model, or OPM) was accounted as a debt discount and accreted over the term of the Term A Loan using the effective interest rate method. The warrants were accounted for and classified as equity at the fair value and were not subject to subsequent remeasurement to fair value.

There were no common stock warrants outstanding as of December 31, 2021 and 2020.

The proceeds from the Term A Loan advance were allocated to the debt and the warrants based on their relative fair values. The resulting debt discount of less than $0.1 million is being recognized as interest expense over the term of the loan of 3.6 years using the effective interest method.

The Company incurred debt issuance costs of $0.1 million, which is presented as reduction of the Term A Loan advance, consistent with the presentation of debt discount. Debt issuance cost and final payment of $0.3 million is recognized as additional interest expense using the effective interest method over the term of the loan.

The Company accreted the final payment due at maturity using the effective interest rate method. The accrued liabilities related to the accretion of the final payment were $0.2 million and $0.2 million as of December 31, 2021

and December 31, 2020, respectively, which was included in long-term debt and in the current portion of long-term debt on the Company’s balance sheets, respectively.