NOTE 5 – CONVERTIBLE NOTES

Between April 27, 2025, and May 1, 2025, the Company entered into Subscription Agreements (the “Subscription Agreements”) with various investors (the “Investors”), pursuant to which the Company issued convertible notes (the “Notes”) to the Investors in an aggregate principal amount of $900 (collectively, the “Notes Offering”). A portion of the Notes shall be convertible into shares of the Company’s common stock, par value $0.001 (“Common Stock”), at the election of each Investor, pursuant to the Voluntary Conversion (defined below) and the remaining portion of each Note shall be converted into warrants to purchase shares of the Company’s Common Stock (each, a “Warrant” and collectively, the “Warrants”). The sale and issuance of the Notes closed on May 1, 2025. 

At the Maturity Date, the Investor may (at the Investor’s sole option) convert all of that certain unpaid portion of principal and accrued interest of the Investor’s Note into shares of Common Stock (the “Voluntary Conversion”), specifically into that number of shares of Common Stock (the “Converted Shares”) equal to the unpaid principal balance and any accrued interest of each Note divided by $7.74. The amount of principal balance and any accrued interest of each Note convertible pursuant to the Voluntary Conversion shall be the number of Converted Shares multiplied by $6.24 (the “Minimum Price”). Should the Investor not elect Voluntary Conversion, such portion of the unpaid principal balance and any accrued interest of each Note subject to Voluntary Conversion shall be immediately due and payable in cash.

The Notes will accrue interest at a rate of 12% per annum, which will adjust to 20% upon an Event of Default (as defined in the Notes). All unpaid principal, together with any then unpaid and accrued interest and other amounts payable thereunder, shall be due and payable 180 days after the closing of the Notes Offering (the “Maturity Date”).

Upon the closing of the notes, the Company recorded deferred debt costs of $163 associated with transaction costs of the convertible notes. As of June 30, 2025, the net carrying value of the convertible notes is $791 which includes principal of $900 and deferred debt costs of $109. During the six months ended June 30, 2025, the Company recorded interest expense of $72 associated with the accretion of accrued interest of $18 and $54 amortization of deferred debt costs.