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Unsecured Promissory Note
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Unsecured Promissory Note

Note 7: Unsecured Promissory Note

 

On February 16, 2024, the Company (“Borrower”) entered into a Note and Note Purchase Agreement with Streeterville Capital LLC (“Streeterville” or the “Lender”). Under the terms of the agreements, Streeterville paid the Company $2,500,000 in exchange for an unsecured promissory Note with an Original Issue Discount of $781,000. The Company will pay approximately $3,300,000 consisting of the principal amount of the Note, together with the original issue discount and $20,000 of lender transaction fees, no later than February 16, 2026. The stated interest rate of the note is 10%. On May 13, 2025, the Lender and the Borrower entered into a Forbearance Agreement pursuant to which, for a 1% fee and expenses, the Lender released the Borrower and its affiliates from all defaults under the Agreements through the date of the Forbearance Agreement and confirmed that, as a result, no Default Interest is due.

 

On June 30, 2025, the Company (“Borrower”) entered into a Note and Note Purchase Agreement with Streeterville Capital LLC (“Streeterville” or the “Lender”). Under the terms of the agreements, Streeterville paid the Company $250,000 in exchange for an unsecured promissory Note with an Original Issue Discount of $50,000. The Company will pay $310,000 consisting of the principal amount of the Note, together with the original issue discount and $10,000 of lender transaction fees, no later than October 28, 2025.

 

 

Debt schedule at June 30, 2025 (in thousands)    
Long-term debt  $2,721 
Unamortized Original issue discount   (415)
Unamortized Financing fees   (16)
Unamortized discount and debt issuance costs   2,290 
Less current portion of long-term debt, net   (2,290)
Long-term debt, net  $— 

 

Future maturities for long-term debt as of June 30, 2025 were as follows:

 

(in thousands)

 

Fiscal years ending December 31:    
2025  $2,290 
Total  $2,290 

 

Interest expense related to long-term debt was $149,000 for the three months ended June 30, 2025. This included $62,000 in original issue discount and $2,500 for loan fee amortization. Interest expense related to long-term debt was $273,000 for the six months ended June 30, 2025. This included $134,000 in original issue discount and $5,000 for loan fee amortization.

 

Current portion of long-term debt of approximately $2,290,000 is net of the current portion of debt discount of approximately $415,000 and the current portion of debt origination costs of approximately $16,000 as of June 30, 2025.

 

The agreement allows the Lender to redeem up to $250,000 per calendar month beginning in August 2024, upon providing written notice to Borrower. The Note further contains triggering events which can be remedied by the Lender requiring the Borrower to correct the triggering event, increasing the outstanding balance by applying the triggering effect, or making the Note immediately due and payable. In the six months ended June 30, 2025, the Company entered into agreements with the Lender to settle a portion of its outstanding loan obligation in the amount of $450,000 through the issuance of 20,541 shares of common stock, rather than cash payment. This exchange was completed pursuant to the terms of the loan agreement, which allows for the settlement of debt through stock issuance under certain conditions.