Bridge Loan (Related Party) |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Bridge Loan (Related Party) [Abstract] | |
| BRIDGE LOAN (related party) | NOTE 9 - BRIDGE LOAN (RELATED PARTY)
On August 6, 2025, the Company entered into a Loan Agreement and Promissory Note (the “Loan Agreement”) pursuant to which the Company obtained $1,500,000 in bridge financing (the “Bridge Loan”). In connection with the Bridge Loan, the Company entered into a Security Agreement and Intellectual Property Security Agreement pursuant to which the Company granted the lender a security interest in all of its assets, properties and rights, including its intellectual property rights related to the Connected devices segment. The Bridge Loan bore interest at a per annum rate equal to 12.0% and matured on November 3, 2025 (the “Maturity Date”). The Loan Agreement also included a loan premium provision that required the Company to pay an additional amount equal to double the then outstanding principal balance of the Bridge Loan upon the occurrence of certain triggering events.
Upon maturity, the Company was required to repay the $1.5 million principal, accrued interest, and a $3.0 million premium. The premium represents an original issue discount, which was amortized over the 90-day term of the loan using the effective interest method, resulting in an effective annual interest rate of approximately 532.59%.
The transaction was negotiated directly with the noncontrolling shareholder and was entered into to provide short-term funding; management believes the terms were reasonable under the circumstances.
On November 3, 2025, the Company entered into an amendment (the “First Amendment”) to the Bridge Loan. The First Amendment provided for an extension of the maturity date of the Bridge Loan to November 5, 2025.
On November 6, 2025, the Company entered into a second amendment to the Bridge Loan (the “Second Amendment”). The Second Amendment provided for an extension of the maturity date of the Bridge Loan to March 31, 2026 in exchange for the Company’s agreeing that upon any sale or other disposition of all or substantially all the Company’s assets related to the Connected devices segment prior to closing of the Merger, it would be obligated to repay the $1.5 million principal of the Bridge Loan, plus any other outstanding obligations plus a $3.0 million repayment premium. The Second Amendment further provided that if the outstanding obligations under the Bridge Loan were not satisfied prior to Closing, the Company’s intellectual property and other assets associated with its business prior to Closing would be transferred to the Lender in full satisfaction of such obligations. As a result, the remaining unamortized original issue discount was amortized using the effective interest method over the amended term ending March 31, 2026. No additional proceeds were received in connection with the amendment.
On March 19, 2026, the Company entered into a third amendment to the Bridge Loan (the “Third Amendment”). The Third Amendment provided for an extension of the maturity date of the Bridge Loan to June 30, 2026 in exchange for the Company’s agreeing that upon any sale or other disposition of all or substantially all the Company’s legacy assets, it would be obligated to repay the $1.5 million principal of the Bridge Loan, plus any other outstanding obligations plus a $3.0 million repayment premium and any other proceeds from the sale of such legacy assets. The Third Amendment further provided that if the outstanding obligation under the Bridge Loan had not been paid and the Company had not sold the legacy assets by the maturity date, the Company would transfer such assets to the lender on the maturity date in full satisfaction of the debt. No additional proceeds were received in connection with the amendment. On June 30, 2026, and in line with the Third Amendment, the Company settled the Bridge Loan by entering into a Bill of Sale, Assignment and Assumption Agreement (the “Bill of Sale”) with Evie Holdings, LLC, pursuant to which the Company transferred its legacy assets — including its legacy IP, inventory, equipment, and its 510(k) clearance for the pulse oximetry feature of the wellness ring — to Evie Holdings, LLC in full satisfaction of the Company’s obligations under the Bridge Loan. In connection with the settlement, the lender delivered a payoff letter confirming that the Loan Documents, and all related liens and security interests, terminated automatically upon consummation of the transfer. The settlement of the Bridge Loan resulted in a gain of approximately $2.5 million. Interest expense recognized for the three and six months ended June 30, 2026, was approximately $31 thousand and $208 thousand. |