Note 6 - Long-term Debt	6 Months Ended
Jun. 30, 2019
Notes to Financial Statements
Long-term Debt [Text Block]	6 . Long-Term Debt Prior Agreement with Hercules The Prior Agreement with Hercules required equal monthly payments of principal and interest through the scheduled maturity date of March 1, 2020. In addition, the Prior Agreement required a final payment equal to 6.5% of the aggregate principal amount of $20.5 million in loans, or the End of Term Fee, owed upon full repayment of the loan. On May 30, 2019, the Company used approximately $8.9 million of the proceeds from the Loan Agreement with Oxford (described below) to repay its outstanding obligations under the Prior Agreement, including the outstanding principal plus accrued interest of $7.4 million, and the End of Term Fee of $1.3 million. We accounted for the termination of the Prior Agreement as a debt extinguishment and, accordingly, incurred a loss of approximately $0.2 million associated with the unamortized End of Term Fee. Interest expense related to the Amended Loan Agreement with Hercules was $0.2 million, $0.1 million of which represented amortization of the debt discount, for the three months ended June 30, 2019, and $0.6 million, $0.2 million of which represented amortization of the debt discount, for the six months ended June 30, 2019. Interest expense related to the Amended Loan Agreement with Hercules was $0.6 million, $0.1 million of which represented amortization of the debt discount, for the three months ended June 30, 2018, and $1.2 million, $0.3 million of which represented amortization of the debt discount, for the six months ended June 30, 2018. Loan Agreement with Oxford On May 30, 2019, the Company entered into the Loan Agreement with Oxford as the Lender. Under the Loan Agreement, the Lender made a term loan to the Company in an aggregate principal amount of $25.0 million, or the Loan, which was funded on May 30, 2019. The Company used approximately $8.9 million of the proceeds from the Loan to repay its outstanding obligations under the Prior Agreement, as described above. After deducting all loan initiation costs and outstanding interest on the Prior Agreement, the Company received $15.9 million in net proceeds. The interest rate is calculated at a rate equal to the sum of (a) the greater of (i) the 30 -day U.S. LIBOR rate 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 and (ii) 2.50%, plus (b) 6.75%. Payments on the Loan are interest-only until July 1, 2020 followed by equal principal payments and monthly accrued interest payments through the scheduled maturity date of June 1, 2023. At the Company’s election, the interest-only period may be extended to July 1, 2021, if prior to June 30, 2020, the Company receives unrestricted net cash proceeds of at least $45.0 million from either (i) the issuance and sale of equity securities, or (ii) “up front” payments in connection with a joint venture, collaboration or other partnering transaction, both of which are on terms and conditions acceptable to the Lender. A final payment equal to 5% of the aggregate principal amount of the Loan, or EOT Fee, will be due at the earlier of the maturity date, acceleration of the Loan, or prepayment of the Loan. The Company’s obligations under the Loan Agreement are secured by a security interest in all the assets of the Company, other than the Company’s intellectual property which is subject to a negative pledge. The Company may prepay the Loan at any time. If the Loan is paid prior to the maturity date, the Company will pay the Lender a prepayment charge, based on a percentage of the then outstanding principal balance, equal to 2% if the prepayment occurs before May 30, 2020, 1.5% if the prepayment occurs after May 30, 2020, but on or before May 30, 2021 or 1% if the prepayment occurs after May 30, 2021. Upon voluntary or mandatory prepayment, in addition to the prepayment charge, the Company is required to pay the EOT Fee, Lender’s expenses and all outstanding principal and accrued interest through the prepayment date. The Loan Agreement includes customary representations and covenants that, subject to exceptions, will restrict the Company’s ability to do the following things: declare dividends or redeem or repurchase equity interests; incur additional liens; make loans and investments; incur additional indebtedness; engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are not related to its existing business. The Loan Agreement requires that the Company always maintain unrestricted cash of not less than $5.0 million in accounts subject to control agreements in favor of Lender, tested monthly as of the last day of the month. The Loan Agreement also includes standard events of default, including payment defaults, breaches of covenants following any applicable cure period, a material impairment in the perfection or priority of the Lender’s security interest or in the value of the collateral, a material adverse change in business, operations or the prospect of repayment, events relating to bankruptcy or insolvency. The Loan also contains a cross default provision, under which if a third party (under any agreement) has the right to accelerate indebtedness greater than $250,000, the Loan would also be considered in default. In addition, the Loan defines events which negatively impact government approvals, judgements in excess of $500,000 and the delisting of the Company’s shares of common stock on the Nasdaq Global Market, or Nasdaq, as events of default. Upon the occurrence of an event of default, a default interest rate of an additional 5% may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. Acceleration would result in the payment of any applicable prepayment charges and application of the default interest rate to the outstanding balance until payment is made if full. The Company bifurcated a compound derivative liability related to a contingent interest feature and acceleration upon default provision (contingent put option) provided to the Lender. The bifurcated embedded derivative must be valued and separately accounted for in the Company’s financial statements. As of May 30, 2019 ( the date of issuance) and June 30, 2019, the estimated fair value of the contingent put option liability was $0.7 million and $0.7 million, respectively, which was determined by using a risk-neutral valuation model, wherein the fair value of the underlying debt facility is estimated both with and without the presence of the default provisions, holding all other assumptions constant. The resulting difference between the two estimated fair values is the estimated fair value of the default provisions, or the contingent put option. The fair value of the underlying debt facility is estimated by calculating the expected cash flows in consideration of an estimated probability of default and expected recovery rate in default and discounting such cash flows back to the reporting date using a risk-free rate. The contingent put option liability is revalued at the end of each reporting period and any change in the fair value is recognized in interest income and other income (expense), net in the Consolidated Statements of Comprehensive Loss. In connection with the Loan Agreement, on May 30, 2019, the Company issued warrants to the Lender and its affiliates, which are exercisable for an aggregate of 176,679 shares of the Company’s common stock with a per share exercise price of $2.83, or the Warrants. The Warrants have been classified within stockholders’ deficit and accounted for as a discount to the loan by allocating the gross proceeds on a relative fair value basis. For further discussion, see Note 9 “Warrants”. Interest expense related to the Loan Agreement was $0.3 million, $0.1 million of which represented amortization of the debt discount, for the three and six months ended June 30, 2019.

. Long-Term Debt

Prior

Agreement with Hercules

The Prior Agreement with Hercules required equal monthly payments of principal and interest through the scheduled maturity date of

March 1, 2020.

In addition, the Prior Agreement required a final payment equal to

6.5%

of the aggregate principal amount of

$20.5

million in loans, or the End of Term Fee, owed upon full repayment of the loan. On

May 30, 2019,

the Company used approximately

$8.9

million of the proceeds from the Loan Agreement with Oxford (described below) to repay its outstanding obligations under the Prior Agreement, including the outstanding principal plus accrued interest of

$7.4

million, and the End of Term Fee of

$1.3

million. We accounted for the termination of the Prior Agreement as a debt extinguishment and, accordingly, incurred a loss of approximately

$0.2

million associated with the unamortized End of Term Fee.

Interest expense related to the Amended Loan Agreement with Hercules was

$0.2

million,

$0.1

million of which represented amortization of the debt discount, for the

three

months ended

June 30, 2019,

and

$0.6

million,

$0.2

million of which represented amortization of the debt discount, for the

six

months ended

June 30, 2019.

Interest expense related to the Amended Loan Agreement with Hercules was

$0.6

million,

$0.1

million of which represented amortization of the debt discount, for the

three

months ended

June 30, 2018,

and

$1.2

million,

$0.3

million of which represented amortization of the debt discount, for the

six

months ended

June 30, 2018.

Loan Agreement with Oxford

May 30, 2019,

the Company entered into the Loan Agreement with Oxford as the Lender. Under the Loan Agreement, the Lender made a term loan to the Company in an aggregate principal amount of

$25.0

million, or the Loan, which was funded on

May 30, 2019.

The Company used approximately

$8.9

million of the proceeds from the Loan to repay its outstanding obligations under the Prior Agreement, as described above. After deducting all loan initiation costs and outstanding interest on the Prior Agreement, the Company received

$15.9

million in net proceeds.

The interest rate is calculated at a rate equal to the sum of (a) the greater of (i) the

-day U.S. LIBOR rate 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 and (ii)

2.50%,

plus (b)

6.75%.

Payments on the Loan are interest-only until

July 1, 2020

followed by equal principal payments and monthly accrued interest payments through the scheduled maturity date of

June 1, 2023.

At the Company’s election, the interest-only period

may

be extended to

July 1, 2021,

if prior to

June 30, 2020,

the Company receives unrestricted net cash proceeds of at least

$45.0

million from either (i) the issuance and sale of equity securities, or (ii) “up front” payments in connection with a joint venture, collaboration or other partnering transaction, both of which are on terms and conditions acceptable to the Lender. A final payment equal to

of the aggregate principal amount of the Loan, or EOT Fee, will be due at the earlier of the maturity date, acceleration of the Loan, or prepayment of the Loan. The Company’s obligations under the Loan Agreement are secured by a security interest in all the assets of the Company, other than the Company’s intellectual property which is subject to a negative pledge.

The Company

may

prepay the Loan at any time. If the Loan is paid prior to the maturity date, the Company will pay the Lender a prepayment charge, based on a percentage of the then outstanding principal balance, equal to

if the prepayment occurs before

May 30, 2020,

1.5%

if the prepayment occurs after

May 30, 2020,

but on or before

May 30, 2021

if the prepayment occurs after

May 30, 2021.

Upon voluntary or mandatory prepayment, in addition to the prepayment charge, the Company is required to pay the EOT Fee, Lender’s expenses and all outstanding principal and accrued interest through the prepayment date.

The Loan Agreement includes customary representations and covenants that, subject to exceptions, will restrict the Company’s ability to do the following things: declare dividends or redeem or repurchase equity interests; incur additional liens; make loans and investments; incur additional indebtedness; engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are

not

related to its existing business. The Loan Agreement requires that the Company always maintain unrestricted cash of

not

less than

$5.0

million in accounts subject to control agreements in favor of Lender, tested monthly as of the last day of the month.

The Loan Agreement also includes standard events of default, including payment defaults, breaches of covenants following any applicable cure period, a material impairment in the perfection or priority of the Lender’s security interest or in the value of the collateral, a material adverse change in business, operations or the prospect of repayment, events relating to bankruptcy or insolvency. The Loan also contains a cross default provision, under which if a

third

party (under any agreement) has the right to accelerate indebtedness greater than

$250,000,

the Loan would also be considered in default. In addition, the Loan defines events which negatively impact government approvals, judgements in excess of

$500,000

and the delisting of the Company’s shares of common stock on the Nasdaq Global Market, or Nasdaq, as events of default. Upon the occurrence of an event of default, a default interest rate of an additional

may

be applied to the outstanding loan balances, and the Lender

may

declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. Acceleration would result in the payment of any applicable prepayment charges and application of the default interest rate to the outstanding balance until payment is made if full. The Company bifurcated a compound derivative liability related to a contingent interest feature and acceleration upon default provision (contingent put option) provided to the Lender. The bifurcated embedded derivative must be valued and separately accounted for in the Company’s financial statements. As of

May 30, 2019 (

the date of issuance) and

June 30, 2019,

the estimated fair value of the contingent put option liability was

$0.7

million and

$0.7

million, respectively, which was determined by using a risk-neutral valuation model, wherein the fair value of the underlying debt facility is estimated both with and without the presence of the default provisions, holding all other assumptions constant. The resulting difference between the

two

estimated fair values is the estimated fair value of the default provisions, or the contingent put option. The fair value of the underlying debt facility is estimated by calculating the expected cash flows in consideration of an estimated probability of default and expected recovery rate in default and discounting such cash flows back to the reporting date using a risk-free rate. The contingent put option liability is revalued at the end of each reporting period and any change in the fair value is recognized in interest income and other income (expense), net in the Consolidated Statements of Comprehensive Loss.

In connection with the Loan Agreement, on

May 30, 2019,

the Company issued warrants to the Lender and its affiliates, which are exercisable for an aggregate of

176,679

shares of the Company’s common stock with a per share exercise price of

$2.83,

or the Warrants. The Warrants have been classified within stockholders’ deficit and accounted for as a discount to the loan by allocating the gross proceeds on a relative fair value basis. For further discussion, see Note

“Warrants”.

Interest expense related to the Loan Agreement was

$0.3

million,

$0.1

million of which represented amortization of the debt discount, for the

three

and

six

months ended

June 30, 2019.