Notes Payable |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Notes Payable | Note 4 – Notes Payable
The Company originally issued a secured bridge note in November 2022 with a principal amount of $2.2 million, including a $200,000 original issue discount, bearing interest at 10% and secured by substantially all of the Company’s assets. In connection with this financing, the Company issued 12,000 common stock warrants and provided the lender with a conversion option for the original issue discount and accrued interest at fixed prices. In April 2023, the Company entered into an additional secured bridge note with the same investor for $825,000, including a $75,000 original issue discount, and issued 26,000 additional warrants. During April and May 2023, the Company modified the terms of the Prior Note, cancelled and replaced the original warrants, and extended the maturity date, resulting in the issuance and vesting of additional warrants and the recognition of incremental debt discount. In July 2023, the Company extended the maturity date of the New Note, which resulted in the vesting of previously unvested warrants. All warrants issued in connection with these financings were classified in equity as they were indexed to the Company’s common stock in accordance with ASC 815-40.
On April 9, 2024, the Company and the investor entered into an Amendment and Waiver Agreement relating to the Company’s outstanding Bridge Notes.
The Company agreed to pay $2.75 million in cash to the holder in repayment of the principal of the Bridge Notes (exclusive of the $275,000 of original issue discount on the Bridge Notes) shortly after the closing by the Company of one or more equity financings with total gross proceeds to the Company of not less than $6,000,000.
On April 26, 2024, the Company repaid $2.75 million of principal on its outstanding Secured Bridge Notes.
Effective April 9, 2024, the holder converted $911,384 (the “Rollover Amount”) which is equal to the (i) unpaid accrued interest on the Bridge Notes plus (ii) the original issue discount (“OID”) on the Bridge Notes, into equity securities of the Company (the “Rollover Securities”).
The Rollover Securities consist of (i) prefunded common stock warrants with a per share exercise price of $0.017 per share (the “Prefunded Warrants”) and (ii) non-prefunded warrants (the “Non-Prefunded Warrants”) with a current per share exercise price equal to $1.1815.
The number of Non-Prefunded Warrants was determined by dividing the Rollover Amount by $33.44 (the original exercise price). The number of Non-Prefunded Warrants is equal to the number of Prefunded Warrants (i.e. 100% warrant coverage). The Non-Prefunded Warrants have a price adjustment provision which will adjust the exercise price downward in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise price. The original exercise price of $33.44 has been subsequently adjusted to $1.1815. In order to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months following the date of issue.
The Company issued to the holder new common stock warrants with a five-year term as a loan extension fee (“Fee Warrants”). The Fee Warrants have a price adjustment provision which will adjust the exercise price downward in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise price. The original exercise price of $33.44 has been subsequently adjusted to $1.1815. In order to assure compliance with applicable Nasdaq rules, the Fee Warrants shall not be exercisable for six months following the date of issue.
The Non-Prefunded Warrants and Fee Warrants had a total valuation of $811,402 and the Prefunded Warrants had a valuation of $732,370. As a result, the Company recorded $911,384 as a non-cash charge in connection with the issuance of warrants related to the Bridge Notes and a change in the fair value of warrants of $632,388 upon payoff of the debt during the nine months ended September 30, 2024. All warrants were classified as equity as they were indexed to the Company’s shares in accordance with ASC 815-40.
On September 25, 2025, the prefunded warrants were exercised.
On June 20, 2025, the Company entered into a promissory note to finance its directors and officers (“D&O”) insurance premium. The original principal amount of the note was $151,300 and bears interest at a fixed annual rate of 8.250%. The note requires monthly payments of principal and interest and matures on May 20, 2026.
As of December 31, 2025, the outstanding principal balance was $60,520. The note is unsecured and contains no financial covenants.
|