v3.26.1
Notes Payable
 6 Months Ended
Jun. 30, 2026
Notes Payable [Abstract]  
NOTES PAYABLE

5. NOTES PAYABLE

 

The Company entered into the Avenue Financing (defined below) and financing arrangements for a portion of its Directors and Officers insurance premiums, as follows (in thousands):

 

                Principal Repayments     Outstanding Balance  
    Amount           Six Months Ended
June 30,		     June 30     December 31,  
    Financed     Interest Rate     2026     2025     2026     2025  
Avenue Capital Note Principal and Final Payment Fee   $ 15,000       Prime + 5.25 %   $ -     $ -     $ 15,750     $ 9,250  
Yorkville Convertible Notes, at fair value         11,500       0.0 %     -       2,365       -       -  
2025 Insurance Note     580       8.0 %     317       -       109       426  
2024 Insurance Note     596       8.4 %     -       360       -       -  
                    $ 317     $ 2,725     $ 15,859     $ 9,676  
Less: current portion of notes payable                                     (3,859 )     (2,854 )
Unamortized debt discounts and debt issuance costs                                     (945 )     (1,284 )
Notes payable. long term                                   $ 11,055     $ 5,538  

 

Avenue Capital Financing

 

On March 24, 2025, the Company completed the Avenue Financing, with an initial draw-down of $8.5 million.

 

The term of the financing with Avenue Capital Group (the “Avenue Financing”) is for three years, with an interest-only payment period of no less than 15 months, which was extended to 24 months upon the Company’s achievement of the milestones for the second financing tranche during the three months ended June 30, 2026. The second financing tranche, which includes an additional $6.5 million in debt financing from Avenue Capital Group is contingent upon; (i) FDA clearance of the DeepView System and (ii) the Company completing a $7.0 million equity raise. The borrowings under the Avenue Financing accrue interest at a variable amount per annum equal to the greater of (i) the sum of (A) the Prime Rate plus (B) 5.25%, and (ii) 12.75%, and they mature on March 1, 2028 (the “Maturity Date”). In addition, on the Maturity Date a final payment of $0.8 million is due to Avenue Capital Group and is accrued as debt as of June 30, 2026.

 

Up to $2.0 million of the borrowings under the Avenue Financing are convertible at the lender’s option, into a number of shares of common stock at a price per share equal to 120% of the exercise price of the Avenue Warrants discussed below. Pursuant to the guidance in ASC 815-40, Contracts in Entity’s Own Equity, the Company evaluated whether the conversion feature needed to be bifurcated from the host instrument as a freestanding financial instrument. Under ASC 815-40, to qualify for equity classification (or non-bifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s own stock and (2) meet the requirements of the equity classification guidance. Based upon the Company’s analysis, it was determined the conversion option is indexed to its own stock and also met all the criteria for equity classification. Accordingly, the conversion option is not required to be bifurcated from the host instrument as a derivative.

 

As part of the Avenue Financing the Company issued 768,072 warrants to Avenue Capital Group which was equal to 8.5% of the total funding commitment. The Avenue Warrants have an exercise price equal to $1.66 per share, see Note 6. 

 

On June 18, 2026, the Company drew down the second financing tranche under the Avenue Financing following the achievement of the required funding conditions. The Company received net proceeds of approximately $6.5 million.

 

Repayment of Yorkville Convertible Notes

 

During the six months ended June 30, 2025, the Company paid the remaining $2.4 million of the Yorkville Convertible Notes of which $1.2 million was settled in cash and $1.2 million was settled in shares of common stock.

 

Insurance Notes

 

The Company determined that the carrying amounts of all of the insurance notes approximate fair value due to the short-term nature of borrowings and current market rates of interest.