6.	Note Payable

May 22, 2017,

the Company entered into a Term Loan Agreement (the

“2017

Loan Agreement”) with affiliates of CRG LP (“CRG”). The credit facility consists of

$20,000,000

drawn at closing and access to additional funding of up to an aggregate of

$10,000,000

for a total of

$30,000,000

available under the credit facility. On

December 29, 2017,

the Company accessed the remaining

$10,000,000

available under the credit facility.

A portion of the initial loan proceeds were used to repay all of the amounts owed by the Company under its

2016

Loan Agreement with Western Alliance Bank. The remainder of the loan proceeds (after deducting loan origination costs and other fees and expenses incurred in connection with the

2017

Loan Agreement), plus any additional amounts that

may

be borrowed in the future, will be used for general corporate purposes and working capital.

The

2017

Loan Agreement has a

six

-year term with

four

years of interest-only payments after which quarterly principal and interest payments will be due through the maturity date. Amounts borrowed under the

2017

Loan Agreement accrue interest at an annual fixed rate of

12.5%,

4.0%

of which

may,

at the election of the Company, be paid in-kind during the interest-only period by adding such accrued amount to the principal loan amount each quarter. During the

three

and

nine

months ended

September 30, 2019,

the Company paid interest in-kind of

$331,000

and

$973,000,

respectively, which was added to the total outstanding principal loan amount. During the

three

and

nine

months ended

September 30, 2018,

the Company paid interest in-kind of

$318,000

and

$934,000,

respectively, which was added to the total outstanding principal loan amount. The Company is also required to pay CRG a final payment fee upon repayment of the loans in full equal to

5.0%

of the sum of the aggregate principal amount plus the deferred interest added to the principal loan amount during the interest-only period. The Company accounts for the final payment fee by accruing the fee over the term of the loan using the effective interest rate method. As of

September 30, 2019,

interest accrued related to the final payment fee in the amount of

$756,000

was included in other noncurrent liabilities in the condensed consolidated balance sheets.

The Company

may

prepay all or a portion of the outstanding principal and accrued unpaid interest under the

2017

Loan Agreement at any time upon prior notice to CRG, subject to a prepayment fee during the

first

five

years of the term (which reduces each year) and

prepayment fee thereafter.

As security for its obligations under the

2017

Loan Agreement, the Company entered into security agreements with CRG whereby the Company granted CRG a lien on substantially all of the Company’s assets, including intellectual property.

The terms of the

2017

Loan Agreement also require the Company to meet certain financial and other covenants. These covenants require the Company to maintain cash and cash equivalents of

$2.0

million and, each year through the end of

2022,

to meet a minimum total annual revenue threshold. In the event that the Company does

not

meet the minimum total annual revenue threshold for a particular year, then the Company can retroactively cure the shortfall by either issuing additional equity in exchange for cash or incurring certain additional permitted indebtedness, in each case, in an amount equal to

2.0

times the shortfall. Any such amounts shall be applied to prepay the loans. The

2017

Loan Agreement also contains customary affirmative and negative covenants for a credit facility of this size and type, including covenants that limit or restrict the Company’s ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends or make distributions, license intellectual property rights on an exclusive basis or repurchase stock, in each case subject to customary exceptions. As of

September 30, 2019,

the Company was in compliance with all covenants.

As of

September 30, 2019

and

December 31, 2018,

$31,694,000

and

$30,528,000,

respectively, was recorded on the balance sheets under the

2017

Loan Agreement, respectively, which is net of the remaining unamortized debt discount.

In connection with the

2017

Loan Agreement, the Company issued

two

-year warrants to CRG to purchase a total of

2,220

shares of the Company’s common stock at an exercise price of

$950.00

per share (See Note

As of

September 30, 2019,

future minimum payments under the note payable are as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	710
2020		2,901
2021		16,673
2022		19,306
2023		6,220
Total payments		45,810
Less: Amount representing interest		(13,087	)
Present value of obligations		32,723
Less: Unamortized debt discount		(1,029	)
Note payable, noncurrent portion	$	31,694