9. RELATED PARTY DEBT

The following table summarizes notes payable due to related parties as of June 30, 2026 and December 31, 2025 (in thousands):

Future debt obligations at June 30, 2026 for debt owed to related parties are as follows (in thousands):

Executive Deferred Compensation Notes Payable

The Company has outstanding promissory notes payable to Dr. Mark Faupel, Chief Executive Officer, and Dr. Gene Cartwright, former Chief Executive Officer, related to previously deferred compensation and other obligations. These notes were originally issued in 2018 and subsequently restructured and amended on multiple occasions. Dr. Faupel's note, extended pursuant to a new promissory note dated April 30, 2026 (with terms retroactively applied as of February 19, 2026) has a new maturity date of August 18, 2027 and is classified as long-term as of June 30, 2026. Dr. Cartwright's note, which had a maturity date of February 18, 2023, remains past due as of June 30, 2026 and continues to accrue interest.

On August 27, 2025, the Company entered into an agreement with Dr. Faupel to exchange $25 thousand of outstanding principal for 138,889 shares of common stock and warrants to purchase 138,889 shares of common stock. The warrants are exercisable at $0.25 per share and expire four years from the issuance date. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $51 thousand during the year ended December 31, 2025.

Dr. Faupel's note bears interest at 6% per annum and matures on August 18, 2027. At the Holder's election, the note shall become due and payable in full if the Company obtains financing of at least $4.0 million or, at the end of any fiscal quarter during the two-year period following the note's issuance, holds cash on hand of at least $4.0 million.

As of June 30, 2026, the aggregate outstanding balance of the notes was $500 thousand, including accrued interest of $122 thousand, of which $176 thousand representing Dr. Faupel's note is classified as long-term and included in “Long-term debt, related parties” on the condensed consolidated balance sheets, with the remainder included in “Current portion of notes payable due to related parties.” As of December 31, 2025, the aggregate outstanding principal balance was $489 thousand, including accrued interest of $111 thousand, all of which is included in “Current portion of notes payable due to related parties” on the condensed consolidated balance sheets.

On March 22, 2021, the Company entered into an exchange agreement with a former executive, pursuant to which a portion of previously deferred compensation was converted into an unsecured promissory note, with the remaining balance continuing as deferred compensation. During the six months ended June 30, 2026, the remaining deferred compensation balance was forgiven by the creditor. As of June 30, 2026, there was no outstanding balance under either the promissory note or deferred compensation arrangement, both having been fully forgiven or settled prior to June 30, 2026. As of December 31, 2025, the outstanding principal amount owed on the note was $2 thousand, which is included in “Current portion of long-term debt, related parties” in the unaudited condensed consolidated balance sheet.

Other Notes Payable Issued to Related Parties

On September 25, 2025, the Company issued a $160 thousand contingently convertible promissory note to Dr. John Imhoff. The note bears simple interest at 10% per annum and matures on February 28, 2027. Beginning November 30, 2025, the Company is required to make monthly payments of $10 thousand plus accrued interest until maturity.

If the Company fails to make the required payment, the holder may elect to convert the unpaid balance, including accrued interest, into shares of common stock at a conversion price of $0.07 per share if the 10-day VWAP is below $0.50, or $0.14 per share if the 10-day VWAP is $0.50 or higher. The Company may prepay the note at any time without penalty with the holder’s written consent.

During the year ended December 31, 2025, the holder converted $10 thousand of principal and $4 thousand of accrued interest into 195,460 shares of common stock at a conversion price of $0.07 per share. During the six months ended June 30, 2026, the holder converted an additional $40 thousand of principal and $4 thousand of accrued interest into 626,223 shares of common stock. With the mutual agreement of the Company, these conversions were completed in lieu of scheduled principal payments, and the Company was not in default under the note. During the six months ended June 30, 2026, with mutual agreement of the holder, $30 thousand of principal payments were deferred and are expected to be converted into shares of common stock within the next twelve months.