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Long-term debt
3 Months Ended
Mar. 31, 2021
Long-term debt  
Long-term debt

7. Long-term debt

On April 30, 2020, the Company entered into a loan agreement with Silicon Valley Bank as the lender (Lender) for a loan in an aggregate principal amount of $0.5 million (the Loan) pursuant to the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and implemented by the U.S. Small Business Administration (SBA). The Company used the proceeds of the Loan for payroll and other qualifying expenses. Under the terms of the Loan, the Company may apply for forgiveness of amounts due under the Loan, with the amount of potential

loan forgiveness to be calculated in accordance with the requirements of the PPP based on payroll costs, any mortgage interest payments, any covered rent payments and any covered utilities payments during the 8 or 24-week period after the origination date of the Loan. The Loan matures in two years and bears interest at a rate of 1% per year, with all payments deferred through the six-month anniversary of the date of the Loan or until a conclusion has been reached as to whether the Loan will be forgiven. In January 2021, the Company applied to the SBA for forgiveness and is awaiting a decision. While the Company believes that its use of the Loan proceeds will meet the conditions of forgiveness of the Loan, it cannot be assured that actions taken could cause the Company to be ineligible for forgiveness of the Loan, in whole or in part. In the event the debt is forgiven in a future period, the Company will recognize a gain on extinguishment in the statement of operations. Interest expense for each of the three months ended March 31, 2021 and 2020 was de minimis.

The following table sets forth the Company’s future principal payments as of March 31, 2021 (in thousands):

Years ending December 31, 

    

Amount

2021 (represents remaining nine months in 2021)

$

366

2022

 

134

Total

 

500

Less current portion of long-term debt

 

(366)

Long-term debt, net of current portion

$

134