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Note 4 - Long-term Debt

9 Months Ended

Sep. 30, 2025

Note 4 — Long-Term Debt

SWK Loan

In November 2019, the Company entered into a credit agreement (the “SWK Credit Agreement”) with SWK, which provided $10,000 in debt financing. In connection with entering into the SWK Credit Agreement, the Company issued warrants to SWK to purchase 51,239 shares of the Company’s common stock with an exercise price of $5.86 per share. The fair value of these 51,239 warrants was $226 and was estimated using the Black-Scholes-Merton option pricing model with the following assumptions: fair value of the Company’s common stock at issuance of $5.75 per share; seven-year contractual term; 95% volatility; 0% dividend rate; and a risk-free interest rate of 1.8%. In August 2020, the Company issued additional warrants for 18,141 shares of its common stock at an exercise price of $6.62 per share. The fair value of the 18,141 warrants was $94 and was estimated using the Black-Scholes-Merton option pricing model with the following assumptions: fair value of the Company’s common stock at issuance of $6.85 per share; seven-year contractual term; 95% volatility; 0% dividend rate; and a risk-free interest rate of 0.4%. These warrants (the “SWK Warrants”) are exercisable immediately and have a term of seven years from the date of issuance. The SWK Warrants are subject to a cashless exercise feature, with the exercise price and number of shares issuable upon exercise subject to adjustment in connection with stock splits, dividends, reclassifications and other conditions.

In September 2024, the Company and SWK entered into a subsequent amendment to the SWK Credit Agreement. Under the terms of the amendment, the Company expanded its existing credit facility to $30,000, extended the facility’s maturity to three years from closing with a loan maturity date of December 17, 2027 and reduced the facility’s annual interest rate to Secured Overnight Financing Rate (“SOFR”) plus 6.75%. In connection with the amendment to the SWK Credit Agreement, the Company issued a warrant to SWK for the purchase of up to 289,736 shares of common stock at a price of $5.32 per share. The relative fair value of these 289,736 warrants was $1,170 and was estimated using the BSM with the following assumptions: fair value of the Company’s common stock at issuance of $6.00 per share with an exercise price of $5.32; seven-year contractual term; 63.8% volatility; 0% dividend rate; and a risk-free interest rate of 3.67%.

Interest payments are payable quarterly, with quarterly principal payments of $3,000 beginning in May 2026 with a final principal payment of $9,000 due at maturity in December 2027. The amended SWK Credit Agreement includes a 5.0% exit fee payable at maturity and this exit fee payable will be accreted to interest expense in the Company's Condensed Statement of Operations using the effective interest expense method. The amended SWK Credit Agreement contains a mandatory prepayment clause that can compel the Company to partially prepay the loan upon the occurrence of certain triggering events, which the Company has deemed to be remote. Borrowing under the amended SWK Credit Agreement is secured by the Company's assets, contains customary default provisions, which include limits on additional indebtedness. As of September 30, 2025 and December 31, 2024, the Company was in compliance with all financial covenants.

The Company recorded interest expense of $1,212 and $211 for the three months ended September 30, 2025 and 2024, respectively, which included $189 and $29, respectively of debt discount amortization and non-cash interest expense. During the nine months ended September 30, 2025 and 2024, debt discount amortization and accrued exit fees was $555 and $70, respectively, associated with the SWK Credit Agreement and $350 was associated with interest expense accretion during the nine months ended September 30, 2025 on the $5,000 deferred consideration due to Ipsen S.A (See Note 12 for further discussion). As of September 30, 2025 and December 2024, the Company had accrued interest of $454 and $182, respectively, which is included in accrued liabilities in the accompanying Condensed Balance Sheet.

The table below reflects the future payments for the SWK loan principal and interest as of September 30, 2025.

	*Amount*
2025	$	—
2026		9,000
2027		21,000
Total payments		30,000
Less: unamortized discount		(389	)
Plus: accrued exit fees at September 30, 2025		756
Debt, net of unamortized discount and accrued exit fees	$	30,367