Note 8 - Secured Promissory Note Payable to Oxford Finance

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Secured Promissory Note Payable [Text Block]

NOTE 

8

.  

Secured Promissory Note Payable to Oxford Finance

On

December 

22,

2016,

the Company entered into a loan and security agreement (the “Loan Agreement”) with Oxford Finance, under which the Company borrowed

$5.0

 million. The

$5.0

 million loan, which bore interest at the

30

-day U.S. LIBOR plus

6.17%,

was evidenced by a secured promissory note and was repayable over

four

 years, with interest only payable over the

first

12

months and the balance fully amortized over the subsequent

36

months. Upon repayment, an additional final payment equal to

$325,000

was due, which was accreted as interest expense over the term of the loan using the effective-interest method. The loan was secured by substantially all the Company's assets, except for intellectual property.

The annual effective interest rate of the note, including the accretion of the final payment and the amortization of the debt discount, was approximately

10.5%.

The Company recorded interest expense related to the Loan Agreement of

$82,000

and

$284,000

 during the 

three

and

nine

months ended

September 30,

2019,

respectively, of which

$55,000

and

$191,000,

respectively, was paid. The note was repaid in full on

November 4, 2019.