Borrowings

The following table summarizes the outstanding borrowings from the term loan as of the periods presented:



	December 31, 2019			December 31, 2018
	(in thousands)
Principal outstanding	$	40,000		$	40,000
Less: unamortized debt issuance costs	(777		)	(1,037		)
Outstanding debt, net of debt issuance costs	$	39,223		$	38,963
Classified as:
Current portion of long-term borrowings	$	4,358		$	—
Long-term borrowings	$	34,865		$	38,963

The outstanding debt is related to a term loan entered by the Company with Biopharma Credit Investments IV Sub LP, or Pharmakon, in October 2017 for total loan proceeds of $40.0 million. The total debt issuance costs of $1.3 million were recorded as a direct deduction from the carrying amount of the term loan on the consolidated balance sheet and are being amortized over the period of the term loan using the effective interest method to interest expense in the consolidated statement of operations. The term loan includes an interest-only period for 35 months through September 2020 and is then repaid in equal quarterly principal payments plus interest through December 2022. The New Term Loan is collateralized by all of the Company's assets, including intellectual property. The term loan carries a fixed interest rate of 11.5% and a closing fee of 1.5% of the funded amount, or $0.6 million. The term loan includes a pre-payment fee equal to the interest due for the first 30 months of the agreement if it is prepaid within the first 30 months, a 2% prepayment penalty for months 31-48, and a 1% penalty for months 49-60. The loan is a senior obligation secured with a blanket first lien on the assets of the Company. The effective interest rate for the year ended December 31, 2019 and 2018 was 12.3% and 12.3%, respectively.

The table below summarizes annual future minimum principal payments under the loan agreement as of December 31, 2019:



Year ending December 31,	(in thousands)
2020	$	4,444
2021	17,778
2022	17,778
Total minimum principal payments	$	40,000

The term loan requires the Company to maintain a minimum cash balance of $5.0 million and to achieve certain revenue targets. Beginning with the first quart of 2019, the Company is required to meet either minimum net sales or trailing 12-month consolidated EBITDA targets. The Company needs to meet one or the other, but not both. If the Company does not meet either the minimum net sales or trailing 12-month consolidated EBITDA targets, the debt will immediately become due. The remaining minimum net sales and trailing 12-month consolidated EBITDA targets are as follows:



Twelve Months Ending	Minimum Net Sales		Trailing 12-Month Consolidated EBITDA
	(in thousands)
March 31, 2020	$57,500	or	$1,000
June 30, 2020	$58,500	or	$2,000
thereafter, as applicable	$60,000	or	$3,000

The Company was in compliance with all debt covenants as of December 31, 2019 and 2018.