NOTE 16—SUBSEQUENT EVENTS

On February 27, 2018, the Company entered into a term loan facility with Perceptive Credit Holdings II, LP (“Perceptive”) in the amount of $10.0 million (“the Credit Facility”). The Credit Facility consists of a $5.0 million term loan, which was drawn on the effective date of the Credit Facility and an additional $5.0 million term loan to be drawn six months following the effective date of the Credit Facility. The Company intends to use the proceeds from the Credit Facility to pay off the existing debt facility with Silicon Valley Bank. Borrowings under the Credit Facility are secured by all of the property and assets of the Company. The principal on the facility accrues interest at an annual rate equal to a three-month LIBOR plus the Applicable Margin. The Applicable Margin will be 11.00%. Upon the occurrence, and during the continuance, of an event of default, the Applicable Margin, defined above, will be increased by 4.00% per annum. The first twenty four months are interest only. After the second anniversary of the closing date of the Credit Facility, the term loans will amortize at $200,000 per calendar quarter. This term loan facility matures on February 27, 2022 and includes both financial and non-financial covenants, including a minimum cash balance requirement. The Company is required to pay an exit fee of $100,000 on a pro rata basis on the maturity date or the earlier date of repayment of the term loans in full.

In connection with the Credit Facility, on February 27, 2018 the Company issued Perceptive a warrant to purchase 190,000 shares of the Company’s common stock. The warrant will be exercisable for a period of seven years from the date of issuance at an exercise price of $9.5792, subject to certain adjustments as specified in the Warrant.