DEBT

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

DEBT

4. DEBT

On September 30, 2020, or the Closing Date, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, or SVB, entered into a term loan facility, or the Loan Agreement, up to $75,000,000, which can be drawn in three tranches. In August 2021, we amended the Loan Agreement to adjust the timing threshold for certain clinical milestones associated with Tranche B under the Loan Agreement. In addition, under the amended Loan Agreement, the minimum cash covenant requirement beginning as of June 1, 2022, was increased from $25,000,000 to $30,000,000, and the minimum cash covenant required upon the execution of certain licensing transactions being executed was increased from $30,000,000 to $35,000,000. All other terms of the Loan Agreement were unchanged, including the maturity date, interest rate, payment terms, events of default and other covenants. We are in compliance with the covenants under the Loan Agreement as of September 30, 2021.

Under the amended terms of the Loan Agreement, loan principal can be drawn as follows: (i) Tranche A loan of up to $35,000,000 of which $25,000,000 was funded on the Closing Date and the remaining $10,000,000 was drawn on June 15, 2021, (ii) Tranche B loan of up to $15,000,000 which is available to be drawn from January 1, 2021 to December 15, 2021, and (iii) Tranche C loan of up to $25,000,000 available to be drawn through December 31, 2022, subject to approval by an investment committee comprised of Hercules and SVB.

As of September 30, 2021, the net carrying value of the loan amounts under Tranche A was $34,669,000, which includes the principal amount of $35,000,000 for Tranche A, less net unamortized discounts and debt issuance costs of $836,000 plus accrued end of term charge of $505,000. The carrying value of the debt approximates the fair value as of September 30, 2021. Debt discounts and debt issuance costs are being amortized to interest expense over the life of loan amounts under Tranche A using the effective interest rate method.

The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement, as amended, as of September 30, 2021 (in thousands):

Remainder of 2021	$	796
2022		5,858
2023		19,187
2024		18,338
Total		44,179
Less:  amount representing interest		(6,887	)
Less:  unamortized debt discount and issuance costs		(836	)
Less:  unaccrued end of term charge		(1,787	)
Less:  current portion of debt		—
Noncurrent portion of debt	$	34,669