3.	Long-term Debt

In March 2014, we entered into a First Amendment, or the Amendment, to Loan and Security Agreement, or the Original Loan Agreement (and as amended by the Amendment, the Loan Agreement) with Hercules Capital Funding Trust 2012-1, or Hercules, which was assigned from the original lender, Hercules Technology Growth Capital, Inc. The Amendment modified certain terms applicable to the presently outstanding loan balance of $15.0 million, or the Original Loan, as described below and provides us with the option to borrow an additional $5.0 million, or the 2014 Term Loan Availability, through October 31, 2014, subject to certain conditions. We paid a facility charge of $72,500 in connection with the Amendment.

Pursuant to the Amendment, the interest-only period of the Original Loan has been extended by six months such that the 24 equal monthly installments of principal and interest (mortgage style) will now commence on November 1, 2014 (rather than May 1, 2014). In addition, the interest rate on the Original Loan (which is currently 12.25% plus the amount by which the prime rate exceeds 3.25%) will, upon Hercules’ receipt of evidence of the achievement of positive Phase III data in connection with our PERSIST-1 clinical trial, be reduced to 11.25% plus the amount by which the prime rate exceeds 3.25%. The modified terms were not considered substantially different pursuant to ASC 470-50, Modification and Extinguishment.

If we elect to borrow the funds under the 2014 Term Loan Availability, interest on such portion would float at a rate per annum equal to 10.00% plus the amount by which the prime rate exceeds 3.25%. Any borrowings under the 2014 Term Loan Availability would be repayable in 24 equal monthly installments of principal and interest (mortgage style) commencing on November 1, 2014. As of the time of this filing, we have not borrowed the funds underlying the 2014 Term Loan Availability.

Subject to certain exceptions, all loan obligations under the Loan Agreement are secured by a first priority security interest on substantially all of our personal property (excluding our intellectual property).

As of December 31, 2013, the fair value of the warrant issued in connection with the consummation of the Original Loan Agreement in March 2013 was $1.0 million and was classified as a liability since it did not meet the considerations necessary for equity classification. The warrant was categorized as Level 2 in the fair value hierarchy as the significant inputs used in determining fair value were considered observable market data. In January 2014, all of the warrant was exercised into 0.5 million shares of common stock via cashless exercise.

As of June 30, 2014 and December 31, 2013, unamortized debt discount was $1.5 million and $1.7 million, unamortized issuance costs were $0.2 million and $0.3 million, respectively.