Convertible Line of Credit – Related Party and Supplemental Lines of Credit – Related Party |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Line of Credit [Member] | |
| Convertible Line of Credit - Related Party and Supplemental Lines of Credit - Related Party [Abstract] | |
| Convertible Line of Credit – Related Party and Supplemental Lines of Credit – Related Party |
10.
Convertible Line of Credit – Related Party and Supplemental 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 dated July 8, 2025. Due to the extension of the maturity date for all lines of credit, the remaining amortization expense of the warrants issued with each draw was adjusted prospectively from July 8, 2025 through September 30, 2026. In connection with another new line of credit dated December 31, 2025, the maturity date for all lines of credit was extended to June 30, 2027. 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 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, which was adjusted to September 30,
2026 in connection with the extension of maturity in July 2025, and further
adjusted to June 30, 2027 in connection with the extension of maturity in
December 2025. Amortization for the years ended December 31, 2025 and 2024 of
$154,000 and $210,000, 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 approximately $2,158,000 and $1,399,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in
connection with the extension of maturity in July 2025, and further adjusted to
June 30, 2027 in connection with the extension of maturity in December 2025.
Amortization for the years ended December 31, 2025 and 2024 of $38,000 and
$52,000, 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 $1,922,000 and $1,184,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with
the extension of maturity in July 2025, and further adjusted to June 30, 2027
in connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 and 2024 of $77,000 and $105,000,
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 $1,713,000 and $995,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with
the extension of maturity in July 2025, and further adjusted to June 30, 2027
in connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 and 2024 of $51,000 and $69,000, 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 $1,532,000 and $737,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with
the extension of maturity in July 2025, and further adjusted to June 30, 2027
in connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 and 2024 of $69,000 and $93,000, 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 $1,229,000 and $508,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with
the extension of maturity in July 2025, and further adjusted to June 30, 2027
in connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 and 2024 of $111,000 and $114,000,
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 $1,110,000 and $336,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with
the extension of maturity in July 2025, and further adjusted to June 30, 2027
in connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 and 2024 of $121,000 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 are due on or before January 31, 2026, which
was adjusted to September 30, 2026 in connection with the extension of maturity
in July 2025, and further adjusted to June 30, 2027 in connection with the
extension of maturity in December 2025. 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 6.48% (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 $841,000 and $154,000 at December 31, 2025 and 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, which was adjusted to September 30, 2026 in connection with the extension
of maturity in July 2025, and further adjusted to June 30, 2027 in connection
with the extension of maturity in December 2025. Amortization for the year
ended December 31, 2025 and 2024 of $170,000 and $58,000, 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 through March 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, which was
adjusted to September 30, 2026 in connection with the extension of maturity in
July 2025, and further adjusted to June 30, 2027 in connection with the
extension of maturity in December 2025. 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 $248,000 at December 31, 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 $80,040 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, which was adjusted to September 30, 2026 in connection with the
extension of maturity in July 2025, and further adjusted to June 30, 2027 in
connection with the extension of maturity in December 2025. Amortization for
the year ended December 31, 2025 of $43,000 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, which was adjusted to
September 30, 2026 in connection with the extension of maturity in July 2025, and
further adjusted to June 30, 2027 in connection with the extension of maturity
in December 2025. 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%. Accrued interest on this draw was $150,000 at December 31, 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 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 June 30, 2025 through
September 30, 2026. Amortization for the year ended ended December 31, 2025 of
$52,000 was recorded as interest expense. On July 8, 2025, the Company
and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of
Credit Letter Agreement (the “July 2025 Supplemental Credit Agreement”),
pursuant to which the Lender shall provide the Company a line of credit of up to
$10.0 million (the “July 2025 Supplemental Line of Credit”) to finance the
Company’s working capital needs. The Company may draw upon the July 2025
Supplemental Line of Credit through April 30, 2026. Additionally, in connection
with the July 2025 Supplemental Credit Agreement, the maturity dates of the
Convertible Notes Payable – Related Party and all borrowings under the
Convertible Lines of Credit –Related Party were extended to September 30, 2026,
and further adjusted to June 30, 2027 in connection with the extension of
maturity in December 2025. Each advance made pursuant to the July 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 September 30, 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 July 2025 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 July 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. On December 31, 2025, the Company executed a $10 million Promissory Note under the July 2025 Supplemental Line of Credit. The interest rate on this draw is 5.6% (Applicable Federal Rate for short term loans on date of draw of 3.6% plus 2%). The effective interest rate is approximately 5.9%. The principal and accrued interest is convertible at the option of the Lender at $4.05 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 $4.05 per share, which Warrant is exercisable upon issuance. The fair value of the 200,000 warrants vested at closing on December 31, 2025, was $454,000 at the date of issuance based on the following assumptions: an expected life of 3.58 years, volatility of 92%, risk free interest rate of 3.55% 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 31, 2025 through June 30, 2027. On December 19, 2025, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “December 2025 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “December 2025 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the December 2025 Supplemental Line of Credit through January 31, 2027. Each advance made pursuant to
the December 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 June 30, 2027. 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
$4.38 per share. In connection with the December 2025 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 July 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. 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 June 30, 2027.
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