Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party |
6 Months Ended |
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Jun. 30, 2025 | |
| Line of Credit [Member] | |
| Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party [Abstract] | |
| Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party |
9. Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party
On July 25, 2022, the Company and Richard E. Uihlein (the “Lender”) entered into a Line of Credit Letter Agreement (the “Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $60.0 million (the “Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Line of Credit through July 31, 2024.
Each advance made pursuant to the Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes were originally due on or before January 31, 2026, however, the maturity date was extended to September 30, 2026 in connection with a new line of credit see Note 14. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.
At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.
In connection with the Credit Agreement, the Company agreed to
issue the Lender warrants to purchase up to an aggregate of 1,700,000 shares of
the Company’s common stock, par value $0.001 per share (collectively, the
“Warrants”). Upon execution of the Credit Agreement, the Company issued the
Lender a Warrant to purchase up to 500,000 shares of Company’s Common Stock at
an exercise price of $5.00 per share, which Warrant is exercisable upon
issuance. Further, pursuant to the Credit Agreement, the Company shall issue to
the Lender additional Warrants to purchase up to the remaining 1,200,000 shares
of the Company’s common stock, ratably, upon borrowings under the Credit
Agreement, with exercise prices equal to 150% of the closing price of the
Company’s common Stock on the date of the Promissory Note evidencing such draw,
but in no event more than $10.00 per share nor less than $3.00 per share. The
Warrants expire on July 31, 2029. The
fair value of warrants that vest in the future based on borrowings will be
computed when those borrowings occur and amortized over the remaining period
through January 31, 2026. The fair value of the 500,000 warrants vested at closing on July
25, 2022 was $738,000 at the date of issuance based on the following
assumptions: an expected life of 7 years, volatility of 92%, risk free interest
rate of 3.19% and zero dividends. The fair value of the vested warrants was
recorded in other assets (non-current) as a deferred financing cost and will be
amortized on a straight-line basis from July 25, 2022 through January 31, 2026.
Amortization for the three months ended June 30, 2025 and 2024 of $52,000 and $52,000,
respectively, was recorded as interest expense.
Amortization for the six months ended June 30, 2025 and 2024 of $104,000
and $104,000, respectively, was recorded as interest expense. On December 19, 2022, the Company executed a $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.46% (Applicable Federal Rate for short term loans on date of draw of 4.46% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $1,772,000 and $1,399,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at closing on
December 19, 2022 was $160,780 at the date of issuance based on the following
assumptions: an expected life of 7 years, volatility of 91%, risk free interest
rate of 4.06% and zero dividends. The proceeds were allocated between the
Promissory Note and the warrants issued, and the amount allocated to the
warrants was recorded as a debt discount netted against principal to be
amortized on a straight-line basis, which is not materially different than the
effective interest method, from December 19, 2022 through January 31, 2026.
Amortization for the three months ended June 30, 2025 and 2024 of $13,000 and $13,000,
respectively, was recorded as interest expense. Amortization for the six months ended June 30,
2025 and 2024 of $26,000 and $26,000, respectively, was recorded as interest
expense. On March 31, 2023, the Company executed an
additional $10 million Promissory Note under the Line of Credit. The interest
rate on this draw is 6.41% (Applicable Federal Rate for short term loans on
date of draw of 4.41% plus 2%). The effective interest rate is approximately
7.1%. Accrued interest on this draw was approximately $1,547,000 and $1,184,000
at June 30, 2025 and December 31, 2024, respectively. The principal and accrued
interest is convertible at the option of the Lender at $3.00 per share. In
accordance with the Credit Agreement, the Company issued the Lender a Warrant
to purchase up to 200,000 shares of Company’s Common Stock at an exercise price
of $3.26 per share, which Warrant is exercisable upon issuance. The fair value of the 200,000 warrants vested at
closing on March 31, 2023 was $296,680 at the date of issuance based on the
following assumptions: an expected life of 6.33 years, volatility of 88%, risk
free interest rate of 3.94% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from March 31, 2023 through January 31, 2026.
Amortization for the three months ended June 30, 2025 and 2024 of $26,000 and $26,000,
respectively, was recorded as interest expense.
Amortization for the six months ended June 30, 2025 and 2024 of $52,000
and $52,000, respectively, was recorded as interest expense. On June 30, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.34% (Applicable Federal Rate for short term loans on date of draw of 4.34% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was approximately $1,348,000 and $995,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at
closing on June 30, 2023 was $179,920 at the date of issuance based on the
following assumptions: an expected life of 6.08 years, volatility of 85%, risk
free interest rate of 3.59% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from June 30, 2023 through January 31, 2026.
Amortization for the three months ended June 30, 2025 and 2024 of $17,000 and $17,000,
respectively, was recorded as interest expense.
Amortization for the six months ended June 30, 2025 and 2024 of $35,000
and $35,000, respectively, was recorded as interest expense. On December 29, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.13% (Applicable Federal Rate for short term loans on date of draw of 5.13% plus 2%). The effective interest rate is approximately 7.5%. Accrued interest on this draw was approximately $1,125,000 and $737,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at
closing on December 31, 2023 was $193,745 at the date of issuance based on the
following assumptions: an expected life of 5.7 years, volatility of 79%, risk
free interest rate of 4.49% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the effective
interest method, from December 29, 2023 through January 31, 2026. Amortization
for the three months ended June 30, 2025 and 2024 of $23,000 and $23,000,
respectively, was recorded as interest expense. Amortization for the six months ended June
30, 2025 and 2024 of $47,000 and $47,000, respectively, was recorded as
interest expense. On March 29, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.62% (Applicable Federal Rate for short term loans on date of draw of 4.62% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $860,000 and $508,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.59 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at
closing on March 29, 2024, was $277,389 at the date of issuance based on the
following assumptions: an expected life of 5.33 years, volatility of 75%, risk
free interest rate of 4.19% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from March 29, 2024 through January 31, 2026.
Amortization for the three months ended June 30, 2025 and 2024 of $38,000 and $38,000,
respectively, was recorded as interest expense.
Amortization for the six months ended June 30, 2025 and 2024 of $76,000
and $76,000, respectively, was recorded as interest expense. On June 28, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.01% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 7.4%. Accrued interest on this draw was $682,000 and $336,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.39 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at
closing on June 28, 2024, was $260,000 at the date of issuance based on the
following assumptions: an expected life of 5.03 years, volatility of 77%, risk
free interest rate of 4.29% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from June 28, 2024 through January 31, 2026.
Amortization for the three and six months ended June 30, 2025 of $41,000 and $82,000,
respectively, was recorded as interest expense. On March 29, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Supplemental Line of Credit through March 31, 2025.
Each advance made pursuant to the Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes were originally due on or before January 31, 2026; however, the maturity date was extended to September 30, 2026 in connection with a new line of credit see Note 14. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.
At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.
In connection with the Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 200,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.
On September 30, 2024, the Company executed a $10 million Promissory Note under the Supplemental Line of Credit. The interest rate on this draw is 6.13% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 6.4%. Accrued interest on this draw was $469,000 and $154,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $4.13 per share, which Warrant is exercisable upon issuance.
The fair value of the 200,000 warrants vested at
closing on September 30, 2024, was $307,780 at the date of issuance based on
the following assumptions: an expected life of 4.83 years, volatility of 78%,
risk free interest rate of 3.58% and zero dividends. The proceeds were
allocated between the Promissory Note and the warrants issued, and the amount
allocated to the warrants was recorded as a debt discount netted against
principal amortized on a straight-line basis, which is not materially different
than the effective interest method, from October 1, 2024 through January 31,
2026. Amortization for the three and six months ended June 30, 2025 of $58,000
and $116,000, respectively, was recorded as interest expense. On November 14, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into an additional Supplemental Line of Credit Letter Agreement (the “November 2024 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $6.0 million (the “November 2024 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the November 2024 Supplemental Line of Credit, as amended, through May 31, 2025.
Each advance made pursuant to the November 2024 Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.
At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.
In connection with the November 2024 Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 120,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the November 2024 Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.
On April 30, 2025, the Company executed a $6 million Promissory Note under the November 2024 Supplemental Line of Credit. The interest rate on this draw is 6.13% (Applicable Federal Rate for short term loans on date of draw of 4.13% plus 2%). The effective interest rate is approximately 6.4%. Accrued interest on this draw was $61,000 at June 30, 2025. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 120,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.
The fair value of the 120,000 warrants vested at
closing on April 30, 2025, was $102,816 at the date of issuance based on the
following assumptions: an expected life of 4.25 years, volatility of 84%, risk
free interest rate of 3.65% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from April 30, 2025 through March 31, 2026.
Amortization for the three and six months ended June 30, 2025 of $23,000 was
recorded as interest expense. On March 31, 2025, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “March 2025 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $5.0 million (the “March 2025 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the March 2025 Supplemental Line of Credit through September 30, 2025.
Each advance made pursuant to the March 2025 Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.
At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.
In connection with the March 2025 Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 100,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the March 2025 Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029. On June 30, 2025, the Company executed a $5 million Promissory Note under the March 2025 Supplemental Line of Credit. The interest rate on this draw is 5.93% (Applicable Federal Rate for short term loans on date of draw of 3.93% plus 2%). The effective interest rate is approximately 6.4%. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 100,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.
The fair value of the 100,000 warrants vested at
closing on June 30, 2025, was $132,000 at the date of issuance based on the
following assumptions: an expected life of 4.08 years, volatility of 86%, risk
free interest rate of 3.75% and zero dividends. The proceeds were allocated
between the Promissory Note and the warrants issued, and the amount allocated
to the warrants was recorded as a debt discount netted against principal
amortized on a straight-line basis, which is not materially different than the
effective interest method, from April 30, 2025 through January 31, 2026.
The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.
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