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| LONG TERM DEBT | NOTE 6. LONG TERM DEBT The Company has the following outstanding debt as of June 30, 2026 and December 31, 2025: EIB Credit Facility and Warrants On October 17, 2025, EDAP entered into the Finance Contract with EIB for up to €36 million to support the research and development (“R&D”) of EDAP’s Robotics HIFU programs. The Finance Contract provides funding in three tranches : €11 million (“Tranche A”), €12 million (“Tranche B”) and €13 million (“Tranche C”) subject to satisfaction of condition precedents. In connection with the Finance Contract, the Company also agreed to issue warrants (“Warrants”) for each tranche in accordance with the terms and conditions of a warrant agreement (the “Warrant Agreement”). The Tranche A and B borrowings and the Tranche A and B Warrants are each defined as freestanding financial instruments in accordance with ASC 480-10-20. At inception, the proceeds are allocated between i) the Warrants at their initial fair value and (ii) a debt component for the residual amount. Subsequently, the Warrants are remeasured at fair value with changes in fair value reflected in earnings and the debt component is accounted for at amortized cost. The Warrant Agreement includes a put option: EIB may request the Company to buy back the Warrants in cash for their fair market value as determined in accordance with the valuation principles set out in the Warrant Agreement. The amount is capped at $23.5 million, and EIB may exercise the Warrants for which they did not exercise the put option. Puttable warrants that permit the counterparty to require the issuer to pay cash to settle the warrant or to purchase the shares obtained upon exercise of the warrants, freestanding warrants and other similar instruments on shares that are redeemable require liability classification under ASC 480. EIB – Tranche A Warrants On October 17, 2025, the Company issued 2,624,421 Warrants to EIB as a condition to the financing of Tranche A. The Tranche A Warrants were classified as a liability at inception (on October 17, 2025) and then changes in fair value are recognized in earnings in subsequent periods. The fair value of the Tranche A Warrants amounted to $8.1 million on December 31, 2025 and $13.0 million on June 30, 2026, resulting in $4.9 million of financial expense for the six months ended June 30, 2026. The following table presents fair value as of:
EIB Credit Facility – Tranche A – Financial debt at amortized cost Tranche A borrowings of $12.4 million were recognized as financial debt for the residual amount of $6.9 million as of December 31, 2025, which took into account the fair value of the derivative instrument (warrants) at inception and the borrowing costs of $0.8 million. The amortized cost of the financial debt amounted to $7.9 million as of June 30, 2026, with an effective interest rate of 21.63%. The carrying value of the EIB Tranche A borrowings and Tranche A Warrants was as follows as of June 30, 2026 and December 31, 2025:
EIB – Tranche B Warrants On April 1, 2026, the Company issued 1,116,244 Warrants to EIB as a condition to the financing of Tranche B. The Tranche B Warrants were classified as a liability at inception (on April 1, 2026) and their changes in fair value are recognized in earnings in subsequent periods. The fair value of the Tranche B Warrants amounted to $3.8 million on their issuance date and then the closing value on June 30, 2026 amounted $5.4 million, resulting in $1.6 million of financial expense. The following table presents fair value as of:
EIB Credit Facility – Tranche B – Financial debt at amortized cost Tranche B borrowings of $13.7 million were recognized as financial debt for the residual amount of $9.9 million at the issuance date, which took into account the fair value of the derivative instrument (warrants) at inception. The amortized cost of the loan amounted to $10.2 million as of June 30, 2026, with an effective interest rate of 13.35%. The carrying value of the EIB Tranche B borrowings and Tranche B Warrants was as follows as of June 30, 2026:
Other Loans The following summarizes other loan facilities as of:
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