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Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt

Note 5. Debt

 

Line of Credit

 

In August 2024, the Company secured receivables financing of $1,500,000 (the “Facility”). Under the Facility, the Company may borrow up to 90% of eligible customer account balances. Amounts outstanding bear interest at a rate prime plus 1.2% (8.70% as of December 31, 2024) and collateral fees of 0.15% and are secured by accounts receivable and inventory. The Facility expires on September 5, 2025, and renews automatically, unless notice is given or received. As of December 31, 2024, borrowings under the Facility amounted to $620,000 and $880,000 was available to borrow, subject to available collateral. Unamortized deferred financing cost amounted to $11,000 as of December 31, 2024.

 

 

Financing Agreements

 

In 2024, the Company entered into financing agreements to purchase equipment and software as a service, with imputed or stated interest of 15-19%. Amounts due under the agreements are as follows as of December 31, 2024:

 

      
2025   128,000 
2026   136,000 
Total payments due   264,000 
Less: interest   (41,000)
 Financing agreements   223,000 
Less: current portion   (99,000)
Financing agreements  $124,000 

 

Convertible Notes

 

From July 2023 to March 2024, the Company executed subscription agreements for substantially all of a $2,000,000 privately placed convertible debt offering. The debt was available to be drawn in 25% increments, maturing on the anniversary of the draw, bearing interest at 10% per annum for the term, regardless of earlier payment or conversion, and was mandatorily convertible as to principal and interest into shares of the Company’s common stock at any time prior to maturity at the greater of $1.20 or 85% of the volume-weighted average price of the common stock for the ten trading days immediately preceding the written notice of the conversion (the “Conversion Price”). If the Company had not exercised the mandatory conversion, the holder of the debt had the option after six months and on up to four occasions to convert all or any portion of the principal and interest into shares of the Company’s common stock at the Conversion Price.

 

On October 23, 2023, the Company drew down $1,390,000 in convertible debt and converted a total of $1,207,000 of principal into 820,160 shares of common stock. Additionally, on December 19, 2023, the Company drew $470,000 in convertible debt and converted a total of $653,000 of principal and $4,000 of accrued interest into 495,331 shares of common stock. Finally, between March 27 and 29, 2024 the Company drew down $136,000 in convertible debt and converted the total drawn into 124,208 shares, settling all debt. Debt drawdowns included the non-cash settlement of $30,000 and $71,000 in 2023 and 2024, respectively.