5. Debt

Term Loan

On May 9, 2025 (the “Closing Date”), the Company entered into a loan and security agreement (as amended, the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”) that provides up to $125.0 million principal in term loans (the “Term Loans”) over four tranches. The first tranche consisted of up to $40.0 million with $20.0 million funded on the Closing Date and an option for an additional $20.0 million at the Company’s request through December 31, 2025. The second tranche commitment of $20.0 million is available to be drawn at the Company’s option through September 30, 2026, subject to the achievement of certain clinical and regulatory milestones and receipt of not less than $175.0 million in net cash proceeds from certain financing activities, with at least $150.0 million from an equity financing. A third tranche commitment of $15.0 million is available to be drawn at the Company’s option from December 1, 2027 through December 31, 2027, subject to certain regulatory approvals. A fourth and final tranche commitment of up to $50.0 million is available subject to K2HV’s review of certain information from the Company and discretionary approval by K2HV.

On November 4, 2025, the Company entered into a first amendment to the Loan Agreement with K2HV (the “First Amendment to the Loan Agreement”), pursuant to which the Company borrowed an additional $40.0 million in gross proceeds, consisting of $20.0 million from the remaining first tranche option and $20.0 million from the fourth tranche. As of December 31, 2025, total gross proceeds of $60.0 million had been drawn under the Loan Agreement. On December 10, 2025, the Company entered into a second amendment to the Loan Agreement with K2HV (the “Second Amendment to the Loan Agreement”), pursuant to which the Company restructured its obligations and timelines to conduct equity funding obligations.

The Term Loan matures on May 1, 2029, and the Company is obligated to make interest only payments for the first 36 months, or 48 months if the second tranche is funded, and then interest and principal payments for the next 12 months. The Term Loan bears a variable interest rate equal to the greater of (i) 10.45%, and (ii) the sum of (A) the prime rate as quoted in The Wall Street Journal and (B) 2.95%.

The Amended Loan Agreement deferred the start date of the minimum liquidity covenant from January 1, 2026 to July 1, 2026. The applicable minimum liquidity requirement will depend on the Company’s achievement of specified operational milestones and/or its market capitalization and will be equal to (i) 50% of the outstanding obligations under the Loan Agreement, (ii) 105% of the outstanding obligations under the Loan Agreement, or (iii) waived in full (i.e., zero).

The Company may prepay, at its option, all, but not less than all, of the Term Loan then outstanding plus the accrued and unpaid interest on the portion of principal so repaid, subject to a prepayment premium and end of term fee. Prior to full repayment of the Term Loan, K2HV may elect to convert up to $10.0 million of outstanding principal into shares of the Company’s common stock at a conversion price equal to the lesser of $0.8774 per share and the lowest effective price per share of the Company’s next equity financing. Pursuant to the Amended Loan Agreement, K2HV was granted the option to convert an additional $2.5 million of outstanding principal into shares of the Company’s common stock at a conversion price equal to the lesser of $2.3906 per share and the lowest effective price per share in the Company’s next equity financing. No prepayment penalty applies to any principal amount converted into common stock.

In November 2025, K2HV delivered a conversion notice pursuant to which $2.5 million of outstanding principal under the Term Loan was converted into common stock of the Company at the applicable conversion price, resulting in the issuance of 2,849,327 shares of common stock to K2HV.

Additionally, in December 2025, K2HV delivered a conversion notice pursuant to which $1.5 million of outstanding principal under the Term Loan was converted into common stock of the Company at the applicable conversion price, resulting in the issuance of 1,652,609 shares of common stock to K2HV.

The Company granted K2HV the right, prior to repayment of the term loans, to invest up to $5.0 million in the aggregate in future offerings of the Company’s capital stock subject to certain exceptions and conditions.

The Company’s obligations under the Loan Agreement are secured by a security interest in substantially all of its assets, other than certain intellectual property assets. The Loan Agreement includes customary affirmative and negative covenants, as well as standard events of default, including an event of default based on the occurrence of a material adverse event. The negative covenants include, among others, restrictions on the Company transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying cash dividends or making other distributions, making investments, creating liens, selling assets and making any payment on subordinated debt, in each case subject to certain exceptions.

The Company analyzed the draw of proceeds under the First Amendment to the Loan Agreement to determine the appropriate accounting treatment under ASC 470. The First Amendment to the Loan Agreement provided for two tranches of borrowings: (i) a $20.0 million from the first tranche which was available to the Company at its election through December 31, 2025 per the terms of the Loan Agreement, and (ii) a discretionary tranche of $20.0 million from the fourth tranche, for which borrowings required discretionary approval by K2HV and were conditioned upon the issuance of a new $2.5 million conversion option.

With respect to the $20.0 million draw under the first, the Company determined that the borrowing did not constitute a troubled debt restructuring under ASC 470-60 or a modification of existing debt under ASC 470-50, as the terms of such borrowings were contemplated and approved at the inception of the Loan Agreement and the draw represented an exercise of a pre-existing contractual right. Accordingly, the Company recorded the $20.0 million as additional debt at face value net of debt issuance costs in accordance with the original terms of the Loan Agreement.

With respect to the $20.0 million draw under the discretionary fourth tranche, the Company determined that, because the borrowing required K2HV approval and was accompanied by the issuance of a new conversion option, the transaction did not represent a draw under a pre-existing facility but rather the issuance of new debt for accounting purposes. The Company therefore accounted for the $20.0 million borrowing as new debt.

The Company incurred debt issuance costs of $1.7 million in connection with the original Loan Agreement and an additional $1.1 million of debt issuance costs in connection with the First Amendment to the Loan Agreement. The Company is also required to make a final payment fee of $4.2 million upon maturity, equal to 6.95% of total principal drawn under the Loan Agreement.

For the year ended December 31, 2025, the effective interest rate for the Term Loan was 13.0%.