On May 14, 2018, the Company entered into a second amended and restated loan and security agreement (the “2^nd A&R Loan Agreement”) with SVB, MidCap Funding III Trust and MidCap Financial Trust (together, “MidCap” and collectively with SVB, the “Lenders”), which amended and restated in its entirety the first amended and restated loan agreement. The 2^nd A&R Loan Agreement provided for new term loans of up to $20.0 million, with a floating interest rate equal to 6.50% plus the greater of (i) the 30-day U.S. LIBOR, as reported in the Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue, or (ii) 1.89%. The 2^nd A&R Loan Agreement includes, among other things, the ability of the Lenders to accelerate the payment of the term loan in the event of material adverse change and restrictions on the Company’s ability to sell, assign, license, transfer or otherwise dispose of its assets, including intellectual property assets, without the prior written consent of the Lenders.

The Company borrowed an initial tranche of $10.0 million on May 14, 2018, of which $7.0 million was used to repay all amounts outstanding under the first amended and restated loan agreement, including fees associated with the final payment. The prepayment fees were waived. Of the remaining $10.0 million under the 2^nd A&R Loan Agreement, the Company elected not to draw $5.0 million and the other $5.0 million is not available for draw.

On October 18, 2019, the Company entered into an amendment to the 2^nd A&R Loan Agreement with the Lenders. Pursuant to the amendment, the Company repaid $5.0 million of the outstanding principal balance of the $10.0 million term loan. The Company did not pay any final payment or termination fees in connection with the $5.0 million prepayment. In addition, the Company and the Lenders agreed to modify the term loan repayment schedule. As amended, the term loan repayment schedule provides for interest only payments through October 31, 2020, followed by consecutive equal monthly payments of principal and interest in arrears continuing through the maturity date of October 1, 2022. The Company has the option to prepay the outstanding balance in full, subject to a prepayment fee of 2% of the original principal amount for any prepayment prior to October 1, 2022. A final payment of 5.50% of the aggregate borrowed amount is due at maturity of the loan on October 1, 2022, or upon the prepayment of the facility or the acceleration of amounts due under the facility as a result of an event of default. In addition, the Company agreed that if the Company’s cash and cash equivalents balance with SVB falls below $10.0 million, the Company will transfer to a pledged account an amount of cash and cash equivalents equal to the sum of the then-outstanding principal balance of the term loan plus a final payment fee of $0.3 million.

On May 7, 2020, the Company paid $5.0 million principal balance under the 2^nd A&R Loan Agreement with the Lenders, plus $0.3 million reflecting the final payment and accrued interest. As a result of the payment, as of March 31, 2020, the Company has reflected in current liabilities the amount of principal it expects to pay within the next 12 months.

The borrowings under the 2^nd A&R Loan Agreement are secured by substantially all of the Company’s assets.

Interest expense on the borrowings under the loan agreements described above was $106,000 and $225,000 for the three months ended March 31, 2020 and 2019, respectively. Accretion of the scheduled final payment was $10,000 and $46,000 for the three months ended March 31, 2020 and 2019, respectively. Accretion of the deferred debt issuance costs was $21,000 and $15,000 for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, the scheduled payments for the 2nd A&R Loan Agreement, as amended, and the scheduled final payment were as follows (in thousands):

Year Ending December 31,

Principal

Interest and

Final Payment

Total

2020

5,000

382

5,382