Notes Payable	9 Months Ended
Sep. 30, 2024
Notes Payable
Notes Payable	Note 9. Notes Payable *Note Payable - Director & Officer Liability Insurance* The Company purchased director and officer liability insurance coverage on October 16, 2023 for $447 thousand. A down payment of $157 thousand was made and the remaining balance of $291 thousand was financed over 8 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan is 8.990%. Interest expense on this loan was $1 thousand and $4 thousand for the three and nine months ended September 30, 2024, respectively. The loan balance was $184 thousand as of December 31, 2023. The loan balance was paid off in May of 2024 and therefore there is no balance as of September 30, 2024. The Company purchased director and officer liability insurance coverage on September 26, 2024 for $293 thousand. A down payment of $44 thousand was made and the remaining balance of $249 thousand was financed over 10 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan is 9.990%. Interest expense on this loan was $0 for the three and nine months ending September 30, 2024. The loan balance was $249 thousand as of September 30, 2024. *Short Term Promissory Notes (collectively, the “Related Party Notes”)* On May 30, 2024, David A. Jenkins loaned $500,000 to the Company in exchange for a short-term promissory note. On June 25, 2024, an entity controlled by Mr. Jenkins loaned $150,000 to the Company in exchange for a short-term promissory note. On July 1, 2024 and July 18, 2024, the Company entered into two short-term promissory notes with an affiliate of Mr. Jenkins, where the affiliate loaned $250,000 and $100,000, respectively, to the Company in exchange for the notes. On July 25, 2024, the Company entered into a short-term promissory note with a Trust, of which Mr. Jenkins’ adult daughter is the trustee, where the Trust loaned $500,000 to the Company in exchange for the note. All of these short-term promissory notes (the “Related Party Notes”) had a maturity date of August 30, 2024, and bear interest at the rate of 8% per annum. On August 23, 2024, the Company entered in the first amendment of the Related Party Notes, which extended the maturity date to January 31, 2026 and increased the interest rate to 12% per annum after August 31, 2024. All other terms and conditions remained substantially unchanged. As part of the amendment, the Company paid down all accrued interest to date of $21 thousand. The first amendment was accounted for as a debt modification in accordance with ASC 470-50, Debt Modifications and Extinguishment (“ASC 470-50”). Since the modified terms and conditions were not substantially different from the prior terms and conditions, the Company accounted for the debt modification as a continuation of the original debt instrument. The Company further concluded that the debt modification did not result in any adjustments to the carrying value of the Notes. The Related Party Notes and the debt evidenced thereby, including all principal and interest, accelerate and become immediately due and payable upon the occurrence of certain customary events of default, including failure to pay amounts owing when due, material breach of representations or warranties by the Company (unless waived by the holder of the Related Party Note or cured within 10 days following notice) and/or certain events involving a discontinuation of the Company’s business or certain types of proceedings involving insolvency, bankruptcy, receivership and the like. Interest expense on the Related Party Notes was $33 thousand and $36 thousand for the three and nine months ended September 30, 2024, respectively. The balance of the Related Party Notes and accrued interest was $1.5 million as of September 30, 2024, $16 thousand of which relates to accrued interest and is recorded under interest payable to related parties on the condensed consolidated balance sheets. See Note 19, Related Parties for additional details.

Notes Payable

9 Months Ended

Sep. 30, 2024

Note 9. Notes Payable

Note Payable - Director & Officer Liability Insurance

The Company purchased director and officer liability insurance coverage on October 16, 2023 for $447 thousand. A down payment of $157 thousand was made and the remaining balance of $291 thousand was financed over 8 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan is 8.990%. Interest expense on this loan was $1 thousand and $4 thousand for the three and nine months ended September 30, 2024, respectively. The loan balance was $184 thousand as of December 31, 2023. The loan balance was paid off in May of 2024 and therefore there is no balance as of September 30, 2024.

The Company purchased director and officer liability insurance coverage on September 26, 2024 for $293 thousand. A down payment of $44 thousand was made and the remaining balance of $249 thousand was financed over 10 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan is 9.990%. Interest expense on this loan was $0 for the three and nine months ending September 30, 2024. The loan balance was $249 thousand as of September 30, 2024.

Short Term Promissory Notes (collectively, the “Related Party Notes”)

On May 30, 2024, David A. Jenkins loaned $500,000 to the Company in exchange for a short-term promissory note.

On June 25, 2024, an entity controlled by Mr. Jenkins loaned $150,000 to the Company in exchange for a short-term promissory note.

On July 1, 2024 and July 18, 2024, the Company entered into two short-term promissory notes with an affiliate of Mr. Jenkins, where the affiliate loaned $250,000 and $100,000, respectively, to the Company in exchange for the notes.

On July 25, 2024, the Company entered into a short-term promissory note with a Trust, of which Mr. Jenkins’ adult daughter is the trustee, where the Trust loaned $500,000 to the Company in exchange for the note.

All of these short-term promissory notes (the “Related Party Notes”) had a maturity date of August 30, 2024, and bear interest at the rate of 8% per annum.

On August 23, 2024, the Company entered in the first amendment of the Related Party Notes, which extended the maturity date to January 31, 2026 and increased the interest rate to 12% per annum after August 31, 2024. All other terms and conditions remained substantially unchanged. As part of the amendment, the Company paid down all accrued interest to date of $21 thousand. The first amendment was accounted for as a debt modification in accordance with ASC 470-50, Debt Modifications and Extinguishment (“ASC 470-50”). Since the modified terms and conditions were not substantially different from the prior terms and conditions, the Company accounted for the debt modification as a continuation of the original debt instrument. The Company further concluded that the debt modification did not result in any adjustments to the carrying value of the Notes.

The Related Party Notes and the debt evidenced thereby, including all principal and interest, accelerate and become immediately due and payable upon the occurrence of certain customary events of default, including failure to pay amounts owing when due, material breach of representations or warranties by the Company (unless waived by the holder of the Related Party Note or cured within 10 days following notice) and/or certain events involving a discontinuation of the Company’s business or certain types of proceedings involving insolvency, bankruptcy, receivership and the like.

Interest expense on the Related Party Notes was $33 thousand and $36 thousand for the three and nine months ended September 30, 2024, respectively. The balance of the Related Party Notes and accrued interest was $1.5 million as of September 30, 2024, $16 thousand of which relates to accrued interest and is recorded under interest payable to related parties on the condensed consolidated balance sheets.

See Note 19, Related Parties for additional details.