9. Outstanding Debt

2025 Activities

The following tables summarize outstanding debt as of December 31, 2025 (in thousands):

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Notes Payable

On March 7, 2025, the Company entered into a Commercial Loan Agreement (the “March Commercial Loan”) with a commercial lender for an aggregate principal amount of $5.5 million. The March Commercial Loan bears interest at 8% per annum with a 22-month term. There are no principal repayments during the first eight months of the term. The March Commercial Loan is amortized in 14 installments starting on November 7, 2026. The March Commercial Loan carries an original issue discount of $0.5 million.

On June 26, 2025, the Company entered into a Commercial Loan Agreement (the “June Commercial Loan”) with a commercial lender for an aggregate principal amount of $2.2 million. The June Commercial Loan bears interest at 8% per annum with a 22-month term. There are no principal repayments during the first eight months of the term. The June Commercial Loan is amortized in 14 installments starting on February 26, 2026. The June Commercial Loan carries an original issue discount of $0.2 million.

On October 27, 2025, the Company entered into a Commercial Loan Agreement (the “October Commercial Loan”) with a commercial lender for an aggregate principal amount of $5.5 million. The October Commercial Loan bears interest at 8% per annum with a 22-month term. There are no principal repayments during the first eight months of the term. The October Commercial Loan will be amortized in 14 installments starting on June 26, 2026. The October Commercial Loan carries an original issue discount of $0.5 million.

During the year ended December 31, 2025, the Company issued approximately 96.7 million shares of common stock with a fair value of $25.9 million to certain Note Payable lenders in lieu of cash payments of $19.7 million of debt, including $1.8 million of accrued interest. In addition, the Company has extinguished certain debt pursuant to exchange agreements executed with various holders pursuant to which the Company issues common stock at a price based on a designated pricing period (the “Share payable”). During the year ended December 31, 2025, the Company settled $1.5 million of Share payables and accrued $0.4 million of Share payable. The Company recognized an approximately $6.0 million debt extinguishment loss during the year ended December 31, 2025 from the Note Payable debt redemption.

Convertible Notes

In November 2025, the Company entered into several two-year convertible notes (collectively the “November Convertible Notes”) with multiple individual investors (the “Holders”) with an aggregate principal amount of $0.3 million. The November Convertible Notes bear interest at 11% per annum and are convertible into common shares between $0.21 and $0.22 per share at the Holders’ option.

During the year ended December 31, 2025, the Company modified a convertible note that was originally issued in February 2024 by extending the maturity dates and reducing the conversion price (the “Amended Convertible Note”). The modifications were accounted for as a debt extinguishment. As a result, the Company recognized approximately $47,000 of debt extinguishment gain during the year ended December 31, 2025 from this debt amendment.

During the year ended December 31, 2025, approximately $1.4 million of convertible notes, including $0.2 million of accrued interest were converted into 7.1 million shares of common stock.

Convertible Notes at Fair Value

During the year ended December 31, 2025, the Company entered into several two-year convertible notes and one-year convertible notes (collectively the “2025 Convertible Notes”) with multiple individual investors (the “Holders”) with an aggregate principal amount of $15.1 million. Of the total $15.1 million, $3 million was exchanged from a previously executed non-dilutive financial instrument and $0.7 million was exchanged from outstanding interest. The fair value of the 2025 Convertible Notes on the issuance date was approximately $17.6 million. The Company recognized a loss of $2.6 million upon the issuance of the 2025 Convertible Notes, which was calculated at the difference between the principal amount and the fair value of the 2025 Convertible Notes. The 2025 Convertible Notes bear interest at 11%-12% per annum and are convertible into common shares between $0.19 and $0.245 per share at the Holder’s option. In addition, the Holders have an alternative option to convert the Long-term Convertible Notes and the Short-term Convertible Notes into a non-dilutive financial instrument, which has the same terms at those in the non-dilutive funding agreements as described in Note 14. The Company elected the FVO to fair value the convertible notes described above under the guidance in ASC 825. The convertible notes at fair value are required to be remeasured using level 3 fair value measurements (see Note 4) at each reporting period.

During the year ended December 31, 2025, the Company modified certain existing convertible notes by (i) extending the maturity dates; (ii) reducing the conversion price, (iii) increase the interest rate, and (iv) granting the notes holders the right to further extend the maturity date of the notes for a period of time not to exceed 24 months. The modifications were accounted for as a debt extinguishment as the conversion feature of the amended notes were substantially different from the original terms. As a result, the Company recognized approximately $11.4 million of debt extinguishment loss during the year ended December 31, 2025 from these convertible note debt amendments.

During the year ended December 31, 2025, the Company converted $2.0 million of certain convertible notes, including $0.2 million of accrued interest into 7.8 million shares of common stock.

Yorkville Notes

As previously disclosed, on December 19, 2024, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD (“Yorkville”). Upon entry into the SEPA, the Company issued Yorkville a $5.0 million convertible promissory note for net proceeds of $4.7 million after a 7% original issue discount (the “2024 Yorkville Note”). During the year ended December 31, 2025, the Company issued 21.5 million shares of common stock to convert $5.0 million of the 2024 Yorkville Note. As of December 31, 2025, the 2024 Yorkville Note was fully converted.

On June 30, 2025, the Company and Yorkville entered into a supplemental agreement to increase the amount of convertible promissory notes allowed to be issued by $3.0 million. On June 30, 2025, the Company issued Yorkville a $3.0 million convertible promissory note for net proceeds of $2.9 million after a 5% original issue discount (the “June Yorkville Note”). The June Yorkville Note does not bear interest and matures on June 30, 2026. The June Yorkville Note is convertible into the Company’s common Stock at a conversion price equal to the lower of (i) $0.2932 per share, or (ii) a price per share equal to 95% of the lowest daily VWAP during the 5 consecutive trading days immediately prior to the conversion date. The amounts of such conversions are limited to $0.8 million in any given calendar month unless the conversion price is above $0.2932 per share.

On November 14, 2025, the Company and Yorkville entered into another supplemental agreement to increase the amount of convertible promissory notes allowed to be issued by $5.0 million. On November 14, 2025, the Company issued Yorkville a $5.0 million convertible promissory note for net proceeds of $4.8 million after a 5% original issue discount (the “November Yorkville Note”). The November Yorkville Note does not bear interest and matures on November 14, 2026. The November Yorkville Note is convertible into the Company’s common Stock at a conversion price equal to the lower of (i) $0.29 per share, or (ii) a price per share equal to 95% of the lowest daily VWAP during the 5 consecutive trading days immediately prior to the conversion date. The amounts of such conversions are limited to $1 million in any given calendar month unless the conversion price is above $0.29 per share.

The Company elected the FVO to fair value the June Yorkville Note and November Yorkville Note on the issuance date and will subsequently remeasure at the end of each reporting period. The estimated fair value of the June Yorkville Note and November Yorkville Note on the issuance date were approximate $10.1 million. The Company recognized a loss of $2.1 million upon the issuance of the June Yorkville Note and November Yorkville Note, which was calculated at the difference between the principal amount and the fair value of the note. During the year ended December 31, 2025, the Company issued 12.5 million shares of common stock to convert $2.8 million of the June Yorkville Note. As of December 31, 2025, the fair value of the remaining June Yorkville Note and November Yorkville Note were approximately $6.4 million, which was included in Convertible notes at fair value on the consolidated balance sheets.

2024 Activities

The following tables summarize outstanding debt as of December 31, 2024 (in thousands):

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*These convertible notes are convertible into Series C preferred shares at $12.50 per share. Each Series C preferred share is convertible into common shares after a 30-day restriction period. The conversion price in common share equivalent is $0.50 per share.

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Notes Payable

On April 26, 2024, the Company entered into a Commercial Loan Agreement (the “April Commercial Loan”) with a commercial lender for an aggregate principal amount of $11.0 million. The April Commercial Loan bears interest at 8% per annum with a 22-month term. There were no principal repayments due during the first eight months of the term. The April Commercial Loan is amortized in 14 installments starting on December 26, 2024. No redemption has been made as of December 31, 2025. The April Commercial Loan carries an original issue discount of $1.0 million.

On September 27, 2024, the Company entered into a promissory note agreement (the “Note”) with an individual investor (the “Holder”) for principal amount of $2.0 million. The Note bears zero interest, and is payable upon demand. The Holder must provide 5 days’ advance written notice to the Company (the “Maturity Date”) for the redemption. In addition, the Company agreed to pay the Holder a service fee of $140,000 at the Maturity Date. The $140,000 service fee was recognized as an additional debt discount to the Note and was amortized to interest expense in 5 days.

On October 18, 2024, the Company entered into a Commercial Loan Agreement (the “October Commercial Loan”) with a commercial lender for an aggregate principal amount of $2.2 million. The October Commercial Loan bears interest at 8% per annum with a 22-month term. There are no principal repayments during the first eight months of the term. The October Commercial Loan is amortized in 14 installments starting on June 18, 2025. The October Commercial Loan carries an original issue discount of $0.2 million.

During the year ended December 31, 2024, the Company issued approximately 53.0 million shares of common stock with a fair value of $19.4 million to certain lenders in lieu of cash payments of $14.8 million of debt, including $1.7 million of accrued interest. In addition, the Company has extinguished certain debt pursuant to exchange agreements executed with various holders pursuant to which the Company issues common stock at a price based on a limited pricing period (the “Share payable”). During the year ended December 31, 2024, the Company settled $1.0 million of Share payables and accrued $0.7 million of Share payables. The Company recognized an approximately $4.3 million debt extinguishment loss during the year ended December 31, 2024 from the debt redemption.

Convertible Notes

On February 21, 2024, the Company entered into several one-year convertible notes (the “February Convertible Notes”) with multiple investors (the “Holders”) with an aggregate principal amount of $1.8 million for a purchase price of $1.6 million. The February Convertible Notes bear interest at 8% per annum and are convertible into Series C preferred shares at $12.50 per share at the Holders’ sole option. The Series C preferred shares are convertible into common stock. Each Series C preferred share is convertible into 25 shares of common stock.

As consideration for entering into the package of February Convertible Notes for $1.8 million as described above, the Company amended the Holders’ existing convertible notes and warrants, whereby the maturity date of certain notes and warrants was extended, the conversion price of certain notes was reduced, and the exercise prices of certain warrants were reduced. These amendments in January and February of 2024 involving 16 tranches of warrants and 10 debt instruments were accounted for as both debt modification and debt extinguishment. The Company recognized approximately $1.3 million of debt extinguishment losses during the year ended December 31, 2025 from these debt amendments.

During the year ended December 31, 2024, the Company modified the terms of existing $1.5 million convertible notes (the “Notes”) by (i) extending the maturity dates; (ii) reducing the conversion price, and (iii) granting the Notes holders the right to convert the Notes into a non-dilutive financial instrument. The modifications were accounted for as a debt extinguishment as the conversion feature of the amended notes were substantially different from the original terms. As a result, the Company recognized approximately $0.1 million of debt extinguishment loss during the year ended December 31, 2024 from this debt amendment.

During the year ended December 31, 2024, the Company converted $2.7 million convertible notes including $0.2 million accrued interest into 0.5 million Series C preferred shares.

Convertible Notes at Fair Value

During the year ended December 31, 2024, the Company entered into several one-year convertible notes (the “2024 One-Year Dual Convertible Notes”) with multiple individual investors (the “2024 One-Year Note Holders”) with an aggregated principal amount of $5.5 million. The 2024 One-Year Dual Convertible Notes bear interest at 11% per annum and are convertible into Series C preferred shares between $10.00 and $11.50 per share at the 2024 One-Year Note Holder’s sole option. The Series C preferred shares are convertible into common stock 30 days after the debt conversion date. Each Series C preferred share is convertible into 25 shares of common stock. In addition, the One-Year Note Holders have an alternative option to convert the Convertible Notes into a non-dilutive financial instrument, which has the same terms at those in the non-dilutive funding agreements as described in Note 14.

During the year ended December 31, 2024, the Company entered into several two-year convertible notes (the “2024 Two-Year Dual Convertible Notes”) with multiple individual investors (the “2024 Two-Year Note Holders”) with an aggregate principal amount of $8.6 million. Of the total $8.6 million, $0.3 million was exchanged from a previously executed non-dilutive financial instrument. The

Company received net cash proceeds of $8.3 million. The 2024 Two-Year Dual Convertible Notes bear interest at 11% per annum and are convertible into common shares between $0.285 and $0.38 per share at the 2024 Two-Year Note Holder’s sole option. In addition, the 2024 Two-Year Note Holders have an alternative option to convert the 2024 Two-Year Dual Convertible Notes into a non-dilutive financial instrument, which has the same terms at those in the non-dilutive funding agreements as described in Note 14.

As consideration for entering the 2024 Two-Year Dual Convertible Notes, the Company also agreed to amend certain existing warrants to extend the term of the warrant maturity date for an additional 5 months. As a result of electing the FVO, issuance costs related to the convertible notes are expensed as incurred. Therefore, the incremental change in fair value resulting from the warrant amendment for $0.3 million was recognized as part of interest expenses on the consolidated statement of operations and comprehensive loss.

The Company elected the FVO to fair value the convertible notes described above under the guidance in ASC 825. The convertible notes at fair value are required to be remeasured using level 3 fair value measurements (see Note 4).

During the year ended December 31, 2024, the Company modified certain convertible notes by (i) extending the maturity dates; (ii) reducing the conversion price, and (iii) granting the notes holders the right to further extend the maturity date of the notes from a period of time not to exceed 24 months. The modifications were accounted for as a debt extinguishment as the conversion feature of the amended notes were substantially different from the original terms. As a result, the Company recognized approximately $8.7 million of debt extinguishment loss during the year ended December 31, 2024 from these debt amendments.

Yorkville Note

On December 19, 2024, the Company entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD (“Yorkville”). Upon entry into the SEPA, the Company issued Yorkville a $5.0 million convertible promissory note for net proceeds of $4.7 million after a 7% original issue discount (the “Yorkville Note”). The Yorkville Note does not bear interest and matures on January 19, 2026. The Yorkville Note is convertible into the Company’s common Stock at a conversion price equal to the lower of (i) $0.315 per share (the “Fixed Price”), or (ii) a price per share equal to 95% of the lowest daily VWAP during the 5 consecutive trading days immediately prior to the conversion date (the “Variable Price”). The amounts of such conversions are limited to one sixth (1/6) of the overall Yorkville Note amount in any given calendar month unless the conversion price is above $0.315 per share.

The Company elected the FVO to fair value the Yorkville Note on the issuance date and will subsequently remeasure at end of each reporting period. The estimated fair value of the Yorkville Note on the issuance date was approximate $5.8 million. The Company recognized a loss of $0.8 million upon the issuance of the Yorkville Note, which was calculated at the difference between the principal amount and the fair value of the note. As of December 31, 2024, the fair value of the Yorkville Note was $5.9 million, which was included in Convertible notes at fair value, net of current portion on the consolidated balance sheets.

Interest Expense Summary

The following table summarizes total interest expenses related to outstanding debt for the years ended December 31, 2025 and 2024, respectively (in thousands):

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The following table summarizes the principal amounts of the Company’s debt obligations as of December 31, 2025 (in thousands):

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