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Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt consisted of the following:


	September 30,		December 31,
(in thousands)	2024		2023
Principal stockholder promissory notes	$	5,146	$	5,085
Other related party promissory notes		152		721
Total Loan Payable		5,298		5,806
June 2023 notes		—		1,379
November 2023 bridge notes		—	$	1,717
Total Senior secured notes	$	—	$	3,096
Derivatives	$	—	$	122
December 2023 convertible note		—		904
Other related party convertible notes		188		—
Other convertible notes		745		—
February 2024 convertible note		3,851		—
Total Convertible note payable	$	4,784	$	904
Total debt current	$	10,082	$	9,928
Term Loan		3,996	$	—
Total debt long term	$	3,996	$	—
Total debt	$	14,078	$	9,928

Term Loan [Member]

Debt Instrument [Line Items]

Summary of Carrying Value of Convertible Note

The carrying value of the Term Loan is as follows:


	September 30,			December 31,
(in thousands)	2024			2023
Principal and interest	$	1,997		$	—
Guarantee fees		2,348			—
Unamortized debt discount		(349	)		—
Aggregate carrying value	$	3,996		$	—

Summary of Interest Expense On Convertible Note

Interest expense recognized on the Term Loan is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	166	$	—	$	450	$	—
Amortization of debt discount		129		—		589		—
Total	$	295	$	—	$	1,039	$	—

Senior Secured Notes

Bridge Secured Notes

In March 2023, the Company issued an aggregate of $2.0 million of senior secured notes to three investors, including one related party, with associated warrants to purchase the Company’s common stock at an exercise price of $0.0001, in lieu of future cash interest payments under the senior secured notes issued to such investors. In May 2023, the Company repaid the $2.0 million in senior secured notes.

June 2023 Notes

In June 2023, the Company entered into a note purchase agreement (the "June 2023 Notes") pursuant to which the Company agreed to issue up to $15.8 million in aggregate principal amount of 10% senior secured notes due June 25, 2025 at their sole discretion. The June 2023 Notes are the senior secured obligations of the Company, bear interest at a rate of 10.0% per annum, and contain customary events of default. The maturity date was June 25, 2025, subject to earlier repurchase by the Company. The Company may redeem the June 2023 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the June 2023 Notes to be redeemed, plus any accrued and unpaid interest to (including any additional interest), but excluding, the redemption date. Additional senior secured notes may become available at the sole discretion of the June Lender. As of September 30, 2023, the Company defaulted on the payment of interest due on the June 2023 Notes. On November 3, 2023, the Lender waived their rights to seek remedies resulting from an event of default. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the June 2023 Notes were converted into 769,567 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.0 million and $0.4 million on the extinguishment of debt upon conversion to Series A Preferred Stock for three and nine months ended September 30, 2024.

November 2023 Bridge Notes

On November 10, 2023, the Company issued secured promissory notes (the "November 2023 Bridge Notes") in the aggregate principal amount of approximately $1.9 million, of which approximately $0.8 million was with a related party, with an original issuance discount of 15%, due November 10, 2024. Interest on the outstanding principal of the notes accrues initially at a rate of 3% per annum, with a step-up interest rate of 8% per annum after January 31, 2024 until maturity. The Company elected the fair value option for the notes under ASC Topic 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period.

The notes were amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, a portion of the convertible notes were converted into 219,780 shares of Series A Preferred Stock. In March 2024, the notes were amended at a conversion price of $1.50. In March 2024, the remaining portion of the convertible notes were converted into 538,039 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.0 million and $0.3 million on the extinguishment of debt and loss on change in fair value of $0.0 million and $0.3 million upon conversion to Series A Preferred Stock for three and nine months ended September 30, 2024.

Q2 2024 Convertible Notes

In April and May 2024, the Company issued senior secured convertible preferred notes (the "Q2 2024 Convertible Notes"), in the aggregate principal amount of approximately $1.7 million, due April and May 2025. Interest on the outstanding principal of the notes accrued initially at a rate of 12% per annum. The Company paid a portion of the convertible notes of $0.3 million as of September 30, 2024. In April and May 2024, a portion of the Q2 Convertible Notes were converted into 1,407,186 shares of the Company's Series A Preferred Stock at a blended conversion price of $1.03 per share. The Company recognized a loss equal to $0.0 million and $0.9 million on the extinguishment of debt for the three and nine months ended September 30, 2024.

The carrying value of the Senior Secured Notes are as follows:


	September 30,		December 31,
(in thousands)	2024		2023
June 2023	$	—	$	1,379
November 2023		—		1,717
Aggregate carrying value	$	—	$	3,096

The change in the balance of the Senior Secured Notes is as follows:


	November 2023			June 2023			Q2 2024
(in thousands)	Bridge Notes			Notes			Convertible Notes			Total
Carrying value at December 31, 2023	$	1,717		$	1,379		$	—		$	3,096
Issuance of promissory notes		—			—			1,680			1,680
Loss on extinguishment of debt		275			377			904			1,556
Change in estimated fair value of convertible notes		316			—			—			316
Interest Expense		—			21			89			110
Repayment of promissory notes		—			—			(318	)		(318	)
Conversion to Series A Preferred Stock		(2,308	)		(1,777	)		(2,355	)		(6,440	)
Carrying value at September 30, 2024	$	—		$	—		$	—		$	—

Convertible Notes [Member]

Debt Instrument [Line Items]

Summary of Change in the Balance of the Debt Instrument

The change in the balance of the Promissory notes as converted to convertible notes is as follows:


	August 2023			October 2023			November 2023
(in thousands)	Promissory Notes			Promissory Notes			Promissory Notes		Total
Carrying value at December 31, 2023	$	—		$	—		$	—	$	—
Promissory notes assumed in connection with acquisition of CLMBR, Inc.		725			471			691		1,887
Loss on extinguishment of debt		195			127			—		322
Interest Expense		—			—			54		54
Conversion to Series A Preferred Stock		(920	)		(598	)		—		(1,518	)
Carrying value at September 30, 2024	$	—		$	—		$	745	$	745

Senior Secured Notes [Member]

Debt Instrument [Line Items]

Summary of Carrying Value of Convertible Note

The carrying value of the Senior Secured Notes are as follows:


	September 30,		December 31,
(in thousands)	2024		2023
June 2023	$	—	$	1,379
November 2023		—		1,717
Aggregate carrying value	$	—	$	3,096

Summary of Change in the Balance of the Debt Instrument

The change in the balance of the Senior Secured Notes is as follows:


	November 2023			June 2023			Q2 2024
(in thousands)	Bridge Notes			Notes			Convertible Notes			Total
Carrying value at December 31, 2023	$	1,717		$	1,379		$	—		$	3,096
Issuance of promissory notes		—			—			1,680			1,680
Loss on extinguishment of debt		275			377			904			1,556
Change in estimated fair value of convertible notes		316			—			—			316
Interest Expense		—			21			89			110
Repayment of promissory notes		—			—			(318	)		(318	)
Conversion to Series A Preferred Stock		(2,308	)		(1,777	)		(2,355	)		(6,440	)
Carrying value at September 30, 2024	$	—		$	—		$	—		$	—

December 2023 Convertible Notes [Member]

Debt Instrument [Line Items]

Summary of Carrying Value of Convertible Note

The carrying value of the December 2023 Note is as follows:


	September 30,		December 31,
(in thousands)	2024		2023
Principal and interest	$	—	$	2,169
Unamortized debt discount		—		(801	)
Unamortized issuance costs		—		(464	)
Aggregate carrying value	$	—	$	904

Summary of Interest Expense On Convertible Note

Interest expense recognized on the December 2023 Note is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	—	$	—	$	142	$	—
Amortization of debt discount		—		—		800		—
Amortization of debt issuance costs		92		—		532		—
Total	$	92	$	—	$	1,474	$	—

February 2024 convertible note [Member]

Debt Instrument [Line Items]

Summary of Carrying Value of Convertible Note

The carrying value of the February 2024 Convertible Note is as follows:


	September 30,			December 31,
(in thousands)	2024			2023
Principal and interest	$	4,708		$	—
Unamortized debt discount		(569	)		—
Unamortized issuance costs		(288	)		—
Aggregate carrying value	$	3,851		$	—

Summary of Interest Expense On Convertible Note

Interest expense recognized on the February 2024 Convertible Note is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	305	$	—	$	905	$	—
Amortization of debt discount		679		—		1,779		—
Amortization of debt issuance costs		344		—		902		—
Total	$	1,328	$	—	$	3,586	$	—