Debt

9 Months Ended

Sep. 30, 2024

Debt

Debt

Note 8 — Debt

Line of Credit

On January 22, 2023, the Company entered into an asset-based revolving credit agreement with B1 Bank (the “Line of Credit”). The Line of Credit provided an aggregate revolving credit commitment of $3,000, subject to a borrowing base consisting of eligible accounts receivable and inventory. The Line of Credit included borrowing capacity available for letters of credit and revolving loans available for working capital and other general corporate purposes. The maturity date was January 22, 2024. During the period ended September 30, 2023, the Company borrowed $900, which was repaid in December 2023.

The Line of Credit agreement has since lapsed and has not been renewed. There was no outstanding debt balance as of both September 30, 2024, and December 31, 2023.

Shareholder Promissory Note

On July 14, 2020, the Company issued a promissory note to its majority shareholder in an amount of $29,718 (the “Shareholder Promissory Note”). The Shareholder Promissory Note bore interest at the rate of 0.45% per annum, with all principal and accrued interest due and payable in full on July 14, 2025. On May 31, 2023, the Company completed the conversion of the outstanding principal and accrued and unpaid interest of the Shareholder Promissory Note into shares of Class A Common Stock.

There was no outstanding debt balance as of both September 30, 2024, and December 31, 2023.

First Insurance Funding line of credit

In December 2023, the Company entered into a line of credit agreement with First Insurance Funding for $647.

There was an outstanding balance of $622 as of December 31, 2023. During the nine-month period ended September 30, 2024, the company fully paid off the line of credit.

Related Party Promissory Notes

In June 2023, the Company borrowed $375 under an unsecured promissory note with a related party to fund short-term working capital needs. The notes bore an interest rate of 12%, which incurred $59 in interest during the nine-month period ended September 30, 2024. There was an outstanding balance of $375, as of December 31, 2023, which was fully paid off during the three-month period ended September 30, 2024, leaving no balance outstanding as of September 30, 2024.

In December 2023, the Company borrowed $200 under an unsecured non-interest-bearing promissory note with a related party to fund short-term working capital needs. There was an outstanding balance of $200, as of December 31, 2023. The promissory note was fully paid off during the three-month period ended March 31, 2024, leaving no balance outstanding as of September 30, 2024.

Legacy SMAP Related Party Promissory Notes

In April, May and November 2023, Legacy SMAP secured operational working capital of $1,524. The promissory notes were not interest bearing and were not convertible into any securities of the company. The promissory notes were to be payable upon consummation of an initial business combination; provided that the Company has the right to extend the repayment date for up to 12 months thereafter in the event that the minimum cash transaction is not met or would not be met but for such extension. The minimum cash transaction proceeds were not met at the closing of the Business Combination, and as such, the Company elected to extend repayment of the promissory notes beyond the Closing. The principal balance may be prepaid at any time.

On December 19, 2023, in connection with the Business Combination, $1,324 of the promissory notes was exchanged for an equal amount of Financing Notes which resulted in an outstanding balance of $200 as of December 31, 2023. The $200 promissory note was converted into shares of Common Stock at a price of $3.33 per share. This resulted in loss of $136 recorded under Loss on Financing Transaction within the Consolidated Statements of Operations as the Company agreed to issue 60,060 shares of Common Stock for each share of Common Stock to the converted principal balance.

There was an outstanding balance of $200 as of December 31, 2023. During the three-month period ended March 31, 2024, the Company converted the notes to equity, leaving no outstanding balance as of September 30, 2024.

Convertible Notes

In January 2023, the Company issued unsecured Convertible Notes with several accredited private investors in an aggregate principal amount of $150. The Convertible Notes were converted to Equity on December 19, 2023, as part of the Business Combination.

Financing Notes

On December 19, 2023, in connection with the Business Combination, the Company issued the Financing Notes to several accredited private investors in an aggregate principal amount of $6,805, including $2,324 of which were issued in exchange for other debt instruments as described above.

There was outstanding balance of $5,695 as of December 31, 2023. During the nine months ending September 30, 2024, $6,170 of the Financing Notes were converted into shares of Common Stock at a price of $5 per share for 848,677 shares of Common Stock. This resulted in a loss of $1,245 recorded under Loss on Financing Transaction within the Consolidated Statements of Operations as the Company agreed to issue additional 492,500 shares of Common Stock to the converted principal balance of the Financing Notes.