v3.25.1
Notes payable
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Notes payable

Note 8 - Notes payable

 

At March 31, 2025 and December 31, 2024, notes payable consisted of the following:

          
   March 31,   December 31, 
   2025   2024 
Notes payable, current          
Current portion of notes payable  $14,914   $37,286 
Notes payable, noncurrent          
Long-term portion of notes payable   41,800,000    41,800,000 
Less: unamortized deferred loan costs   (471,026)   (523,291)
Less: unamortized discount   (912,460)   (1,013,104)
Notes payable, noncurrent, net  $40,416,514   $40,263,605 
Total notes payable, net  $40,431,428   $40,300,891 

 

The following table presents information regarding the Company’s notes payable principal repayment obligations as of March 31, 2025:

     
Years Ended December 31,    
2025  $14,914 
2026   - 
2027   41,800,000 
Total minimum payments  $41,814,914 

 

Runway Growth Finance Corp

 

On June 30, 2022, the Company entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all assets of the Company, except for the Company’s intellectual property but includes all proceeds from the sale of intellectual property. The loan agreement provides three term loan tranches. The Company received the initial draw of $20,000,000 in June 2022. The Company received positive interim analysis data, sufficient to proceed with the clinical trial and premarket approval submission to the U.S. Food and Drug Administration, which allowed the Company to draw the second tranche of $20,000,000 in June 2023. The final tranche provided $10,000,000 and the draw period was scheduled to commence on the date the Company received approval from the FDA for the WiSE CRT System and ended June 30, 2024. The Company did not receive FDA approval by June 30, 2024, and therefore did not meet the draw requirements of the third and final tranche. As of March 31, 2025 and December 31, 2024, the outstanding principal balance was $41,800,000.

 

Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the “Prime Rate” or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. The Company is required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If the Company repays the loan prior to maturity, the Company will be required to pay a prepayment fee of 0.5% - 1% of the outstanding principal balance. The Company is also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.

 

The Company has accounted for the final payment of $1,800,000 as a discount of the note that will be amortized over the life of the loan using the effective interest method. Amortization of the discount was $100,644 and $100,475 for the three-month period ended March 31, 2025 and 2024, respectively. This amount was recorded as additional interest expense in the accompanying unaudited condensed consolidated statements of operations. As of March 31, 2025 and December 31, 2024, the note has been shown net of unamortized discounts of $912,460 and $1,013,104, respectively.

 

The Company incurred loan costs of $998,393, which are being amortized over the life of the loan using the effective interest method. Amortization of loan costs was $52,265 and $52,431 for the three-month period ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, the note has been shown net of unamortized loan costs of $471,026 and $523,291, respectively.

 

The Company is subject to customary financial and reporting covenants under the loan and security agreement. As of March 31, 2025 and December 31, 2024, the Company was in compliance with all debt covenants.

 

Bank of America Leasing & Capital, LLC

 

In March 2024, the Company entered into an equipment purchase agreement for the purchase of software totaling $82,029. The purchase agreement requires 11 equal payments of $7,457 beginning July 1, 2024, through May 1, 2025. As of March 31, 2025 and December 31, 2024, the outstanding principal balance was $14,914 and $37,286, respectively, and was included in the current portion of notes payable in the unaudited condensed consolidated balance sheets.