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Debt | 6 Months Ended
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Jun. 30, 2018
Debt |
Debt | 7. Debt 2017 Credit Facility On May 4, 2017, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (2017 Credit Facility) for a $12.0 million term loan. The term loan provides for interest at a floating rate equal to the prime rate minus 0.75%. As of June 30, 2018, the interest rate was 4.25%. The term loan provides for a period of interest-only payments through April 30, 2018, followed by fixed principal and interest payments based on either a 24-month amortization schedule or a 36-month amortization schedule if the Company meets certain sales milestones. As of December 31, 2017, the Company determined it would not meet the sales milestones and as such the term loan is based on a 24-month amortization schedule. Borrowings under the 2017 Credit Facility mature in May 2020. The Company is required to comply with certain covenants under the 2017 Credit Facility, including requirements to maintain a minimum liquidity ratio, meet certain revenue targets, and restrictions on certain actions without the consent of the lender, such as the disposal and acquisition of its business or property, changes in business, and mergers or acquisitions. An end of term fee of 6% of the amount borrowed must be made when the loan is prepaid or repaid, whether at maturity or as a result of a prepayment or acceleration or otherwise. The additional payment is being accreted using the effective interest method. Security for the 2017 Credit Facility includes all of the Company’s assets except for intellectual property. The 2017 Credit Facility contains customary covenants restricting the Company’s activities, including limitations on its ability to sell assets, engage in mergers and acquisitions, enter into transactions involving related parties, incur indebtedness or grant liens or negative pledges on its assets, make loans or make other investments. Under these covenants, the Company is prohibited from paying cash dividends with respect to its capital stock. The Company was in compliance with all covenants at June 30, 2018. The 2017 Credit Facility contains a material adverse effect clause which provides that an event of default will occur if, among other triggers, an event occurs that could reasonably be expected to result in a material adverse effect on the Company’s business, operations or condition, or on the Company’s ability to perform its obligations under the term loan. As of June 30, 2018, management does not believe that it is probable that the clause will be triggered within the next twelve months, and therefore the term loan is classified as long-term. The carrying value of the Company’s 2017 Credit Facility at June 30, 2018 was as follows (in thousands):
|  | Current |  | Long-Term |  |  |
|  | Portion |  | Debt |  | Total
Debt, including end of term fee |  | $ | 6,000 |  | $ | 5,720 |  | $ | 11,720
Less: |  |  |  |  |  |  |  |  |
Discount attributable to end of term fee and debt issuance costs |  |  | (17) |  |  | (369) |  |  | (386)
Net carrying value of debt |  | $ | 5,983 |  | $ | 5,351 |  | $ | 11,334
The carrying value of the Company’s 2017 Credit Facility at December 31, 2017 was as follows (in thousands):
|  | Current |  | Long-Term |  |  |
|  | Portion |  | Debt |  | Total
Debt, including end of term fee |  | $ | 4,000 |  | $ | 8,720 |  | $ | 12,720
Less: |  |  |  |  |  |  |  |  |
Discount attributable to end of term fee and debt issuance costs |  |  | (23) |  |  | (563) |  |  | (586)
Net carrying value of debt |  | $ | 3,977 |  | $ | 8,157 |  | $ | 12,134
Capital Lease Obligations The Company leases certain equipment under a capital lease obligation expiring in October 2020. The balance of the capital lease obligation was $25,000 and $31,000 at June 30, 2018 and December 31, 2017, respectively. Property and equipment under the capital lease amounted to $31,000 at June 30, 2018 and December 31, 2017. Accumulated depreciation and amortization on these assets was $7,000 and $2,000 at June 30, 2018 and December 31, 2017, respectively.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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