Convertible Notes and Loan Agreement |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Convertible Notes and Loan Agreement | Note 5 – Convertible Notes and Loan Agreement
Revolving Note Agreement
On February 27, 2025, the Company entered into a Revolving Loan Agreement with Bowery Consulting Group Inc. (“Bowery”) (the “Lender”). Pursuant to and under the terms of the Revolving Loan Agreement, the Company issued a revolving note dated February 28, 2025 in the principal amount of up to $2,000,000 (the “Revolving Note”), which the Company may draw upon at its discretion from time to time through its maturity on February 28, 2026.
The Company recognized deferred loan costs of approximately $78.0 thousand in relation to the closing of the Revolving Loan Agreement and were amortized to interest expense on a straight-line basis to the maturity of the Revolving Loan Agreement. During the three and six months ended June 30, 2026, the Company recognized $0 and $12.1 thousand in interest expense related to the amortization of these deferred loan costs, respectively. The Revolving Loan expired on February 28, 2026.
2024 Convertible Bridge Notes
During October 2024, the Company completed a senior convertible note offering in two closings, as further described below.
On October 14, 2024, the Company issued an aggregate of $600,000 (of an up to $1.3 million authorized financing) senior secured convertible notes due in October 2025, which accrue interest at 14.5% interest per year. The notes included a 5% original issue discount and the Company received $570.0 thousand in proceeds. The notes were optionally convertible by each holder at a 10% premium beginning three months after the date of issuance, and the conversion price would be the 5-day volume-weighted-average price (“VWAP”) immediately prior to Closing unless re-set (one-time only) by a lower price of an offering entered into by the Company during the term of the notes. The Company had the option to prepay the notes at any time for 107% of total outstanding balance and any outstanding principal would be paid in conversion of shares of common stock at a 15% discount at the end of the term, subject to the Company’s exercise of the optional prepayment right. Any accrued interest was repaid quarterly in cash. The Company also issued warrants to the lenders to purchase an aggregate 964 shares of common stock, exercisable at $350.00 per share, with such warrants expiring five years from issuance. In addition, the Company’s former Chief Executive Officer and Chief Scientific Officer, Dr. Anatoly Dritschilo, invested a total of $237.5 thousand in this financing round, in exchange for a $250.0 thousand convertible note (see Note 4).
As part of the same offering, on October 21, 2024, the Company issued an additional $231.6 thousand in senior secured convertible notes due in October 2025, with substantially similar terms as the October 14, 2024, issuance. The notes include a 5% original issue discount and the Company received $220.0 thousand in proceeds. The Company also issued warrants to the lenders to purchase an aggregate 355 shares of common stock, exercisable at $372.50 per share, with such warrants expiring five years from issuance. Upon completing this issuance, the Company closed the senior secured convertible note offering after receiving a total of $790.0 thousand in proceeds.
Immediately prior to their mandatory conversion, the Company remeasured the fair value of the Convertible Bridge Notes based on the number of shares to be issued upon conversion and the fair value of the Company’s common stock immediately prior to conversion. Upon mandatory conversion of the outstanding principal in October 2025, the Company issued shares of common stock. The fair value of the Company’s common stock at October 14, 2025 and October 21, 2025 was $ and $ per share.
The following table summarizes the changes in the carrying value of the Convertible Bridge Notes:
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