9) Short-Term Debt

A. Recourse Financing

During 2022, the Company obtained a credit facility from Seacoast Business Funding (SBF), a division of Seacoast National Bank. The funding is against the accounts receivable of the Company and one of its subsidiaries. The maximum amount of advance under the arrangement is $10,000 and the bank may advance up to 90% of the unpaid domestic outstanding accounts under the recourse agreement.

The SBF facility incurred a factoring interest cost of 8.5% during the six months ended June 30, 2026, amounting to $16 and 8.5% for the period ended December 31, 2025, amounting to $81. The gross receivables against which advances were received from such arrangement as at June 30, 2026, and December 31, 2025, were $5,555 and $9,633 respectively.

The carrying amount of associated recourse financing liability was nil and $161, as of June 30, 2026, and December 31, 2025, respectively.

In addition, a recently acquired subsidiary of the Company with an acquisition date of January 1, 2026, utilizes recourse-based accounts receivable financing arrangement with a number of banks, whereby the subsidiary receives cash against the customer invoices. Under this arrangement, the maximum advance amount available to the subsidiary is $4,004, subject to invoice ageing and related terms. As the arrangement is with recourse, the subsidiary retains the credit risk associated with the underlying receivables and accordingly continues to recognize the related accounts receivable on its balance sheet. Amounts advanced by the bank are recognized as current liability at fair value, which approximates the actual proceeds received due to the short-term nature of the advances, generally ranging from 60 to 120 days. Interest incurred on the advances is recognized as finance expense in the period incurred. Since the arrangement does not constitute a transfer of receivables under applicable accounting standards, no gain or loss is recognized on the transaction.

This facility incurred a factoring interest rate ranging from 3.51% to 4.05% during six months ended June 30, 2026, whereas the interest cost during the six months ended June 30, 2026, amounting to $37. The gross receivables against which advances were received from such arrangement as at June 30, 2026, were $6,082.

The carrying amount of associated recourse financing liability was $3,935 as at June 30, 2026.

B. 2025 Convertible Notes

As of December 31, 2025, the 2025 Convertible Notes had a fair value of $10,543. During the period ended June 30, 2026, the Company repaid $3,340, converted $10,167 of the notes to common stock, and recognized a loss of $2,964 from changes in fair value.

On June 12, 2026, the Company used a portion of the proceeds from the issuance of the 2026 Convertible Notes (see note 9[C]) to settle the remaining obligations under the 2025 Convertible Notes. The remaining liability was remeasured to fair value immediately prior to settlement, and derecognized upon payment of the settlement consideration.

As a result of the repayments, conversions and changes in fair value during the six months ended June 30, 2026, the Company had no outstanding obligations under the 2025 Convertible Notes as of June 30, 2026.

The following table represents changes in the fair value of the 2025 Debentures for the periods presented:

C. 2026 Convertible Notes

On June 12, 2026, the Company completed a private placement to unrelated institutional investors of 15% original issue discount senior convertible promissory notes (“2026 Debentures”) with an aggregate principal amount of approximately $4,235 for aggregate gross cash proceeds of $3,600. The difference between the aggregate face value of $4,235 and the proceeds of $3,600 represents an original issue discount of $635, which is reflected in the initial fair value measurement of the debentures. The notes mature on December 12, 2026. The 2026 Debentures are convertible into shares of the Company’s common stock at the holders’ option after the applicable contractual conversion date at a conversion price equal to 85% of the volume-weighted average price of the Company’s common stock for the three trading days immediately preceding conversion, subject to a floor price of $0.452 per share and certain adjustments.

The Company has the option to prepay the 2026 Debentures at 102.5% of the principal amount being prepaid plus accrued interest and other amounts owing. In addition, the Company is generally required to apply 25% of the net proceeds from specified subsequent financing transactions toward repayment of the notes unless waived by the applicable holder. The 2026 Debentures bear interest at 10% per annum upon the occurrence and continuation of an event of default. The Company may extend the maturity date for three months, in which case the outstanding principal amount is increased by 10%.

The Company elected the fair value option for these debentures under ASC 825, Financial Instruments, at initial recognition. Accordingly, the 2026 Debentures are recorded at fair value and remeasured at each reporting date, with changes in fair value recognized in earnings.

The fair value of these debentures is classified within Level 3 of the fair value hierarchy because the valuation uses significant unobservable inputs and management judgment. The Company engaged an independent third-party valuation specialist to estimate the fair value of the debentures using a Monte Carlo simulation model. The valuation model simulated multiple potential future stock-price paths and expected settlement outcomes and incorporated the contractual terms of the instruments, including the variable conversion feature, floor price, maturity, and other debt-specific provisions.

 The following table represents changes in the fair value of the 2026 Debentures for the periods presented:

As of June 30, 2026, significant assumptions used by an independent third-party valuer in the valuation included the Company’s common stock price of $1.81 per share, expected volatility of 90.07%, a risk-free rate of 3.98%, and a remaining contractual term of approximately 0.45 years. The valuation also reflected assumptions regarding expected conversion behavior and settlement outcomes over the remaining life of the instruments. In addition, the model was calibrated to observe transaction proceeds. No financing below the contractual floor price is expected in 2026, and accordingly no floor-reset event was incorporated into the June 30, 2026, valuation.

D. Debt from credit institutions

Teyame and Datono have secured various credit facilities across multiple financial institutions. As of June 30, 2026, the total available credit facilities and loans amounted to $8,763, and the amount withdrawn and utilized as of that date was $8,103, of which $5,441 is due within a period of 12 months from the balance sheet date, whereas $2,662 is classified as long-term debt with maturity dates falling due beyond 1 year. These loans and facilities carry interest rates ranging from 1.3% - 5.24% and are obtained to cover the working capital and liquidity needs.

The debt with credit institutions was acquired as part of the Teyame and Datono business combination on January 1, 2026, and represents liabilities assumed at the acquisition date.