v3.25.2
Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt

Note 10 — Debt

 

The fair value and face value principal outstanding of the 2024 Convertible Notes as of the dates indicated are as follows:

 

   Contractual Maturity Date  Stated Interest Rate   Conversion Price per Share   Face Value Principal Outstanding   Fair Value 
2024 Convertible Notes  November 22, 2029   12.000%  $1.00   $21,975   $25,300 
Balance as of June 30, 2025               $21,975   $25,300 

 

   Contractual Maturity Date  Stated Interest Rate   Conversion Price per Share   Face Value Principal Outstanding   Fair Value 
2024 Convertible Notes  November 22, 2029   12.000%  $1.00   $21,975   $18,600 
Balance as of December 31, 2024               $21,975   $18,600 

 

 

Note 10 — Debt - continued

 

The changes in the fair value of debt during the three and six months ended June 30, 2025 is as follows:

 

   2024 Convertible Notes   Other Income (expense) 
Fair Value - March 31, 2025  $32,800   $— 
Non-installment payments – common stock   (75)   — 
Non-installment payments – cash   (584)   — 
Change in fair value   (6,841)   6,841 
Fair Value at June 30, 2025  $25,300    - 
Other Income (Expense) - Change in fair value – three months ended June 30, 2025       $6,841 

 

   2024 Convertible Notes   Other Income (expense) 
Fair Value - December 31, 2024  $18,600   $— 
Non-installment payments – common stock   (107)   — 
Non-installment payments – cash   (831)   — 
Change in fair value   7,638    (7,638)
Fair Value at June 30, 2025  $25,300    - 
Other Income (Expense) - Change in fair value – six months ended June 30, 2025       $(7,638)

 

The changes in the fair value of debt during the three and six months ended June 30, 2024 is as follows:

 

   March 2023 Senior Convertible Note   Other Income (expense) 
Fair Value - March 31, 2024  $13,140   $— 
Installment repayments – common stock   (1,125)   — 
Non-installment payments – common stock   (216)   — 
Change in fair value   (599)   599 
Fair Value at June 30, 2024  $11,200    - 
Other Income (Expense) - Change in fair value – three months ended June 30, 2024       $599 

 

   March 2023 Senior Convertible Note   Other Income (expense) 
Fair Value - December 31, 2023  $13,950   $— 
Installment repayments – common stock   (1,208)   — 
Non-installment payments – common stock   (652)   — 
Change in fair value   (890)   890 
Fair Value at June 30, 2024  $11,200    - 
Other Income (Expense) - Change in fair value – six months ended June 30, 2024       $890 

 

 

Note 10 — Debt - continued

 

2024 Senior Convertible Note

 

On November 22, 2024, the Company closed on the sale of $21.975 million in principal amount of Senior Secured Convertible Notes (collectively, the “2024 Convertible Notes”), in a private placement, to certain accredited investors (the “2024 Note Investors”). The sale of the 2024 Convertible Notes was completed pursuant to the terms of that certain Securities Purchase Agreement, dated as of November 12, 2024 (the “2024 SPA”), between the Company and the 2024 Note Investors. The Company realized gross proceeds of $21.975 million and, after giving effect to the repayment in full of the March 2023 Senior Convertible Note, net proceeds of $18.3 million from the sale of the 2024 Convertible Notes. As of December 31, 2024 there was an approximately $0.4 million subscription receivable in respect of the 2024 Convertibles Notes, which was reflected in prepaid expenses, deposits, and other current assets on the Company’s consolidated balance sheets as of such date. As of June 30, 2025, the Company had received the entire $0.4 million receivable.

 

Each 2024 Convertible Note has a 12.0% annual stated interest rate, a contractual maturity date of five years from the date of issuance, and a contractual conversion price of $1.00 per share of the Company’s common stock (subject to (i) in the event of certain issuances of additional securities by the Company at a price per share less than the then applicable conversion price, adjustment to such lower price per share, and (ii) customary proportionate adjustment upon any stock split, stock dividend, stock combination, recapitalization or other similar transaction). The Company held a stockholder meeting on June 18, 2025 at which the stockholders approved the issuance of the shares issuable upon conversion of the Notes in excess of any primary market limitations.

 

Under the 2024 Convertible Notes, the Company is subject to certain customary affirmative and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, transactions with affiliates, and the consummation of fundamental transactions where the aggregate consideration payable in respect thereof, as determined on a per share of the Company’s common stock basis, has a fair market value that is less than $1.50, among other customary matters. Under the 2024 Convertible Notes, the Company is subject to a financial covenant requiring that the amount of its available cash equal or exceed $5.0 million at all times that at least 25% of the principal amount of 2024 Convertible Notes issued are outstanding. The Company was in compliance with all covenants as of June 30, 2025.

 

The Company agreed that it would file with the SEC a resale registration statement on Form S-3 covering the resale of all shares of the Company’s common stock issuable upon conversion of the 2024 Convertible Notes. Such filing was made, as required under the notes, on May 22, 2025.