MIRA PHARMACEUTICALS, INC. Debt Disclosure

Note 4. Debt, related party:

 

MIRALOGX

 

On November 15, 2023, the Company entered into a Promissory Note and Loan Agreement (the “Loan Agreement”) with MIRALOGX.

 

Pursuant to the Loan Agreement, the Company could borrow up to $3.0 million from MIRALOGX to fund the development of licensed products under the License Agreement (the “Loan”).

 

The Loan Agreement had a one-year term, and all outstanding principal and accrued but unpaid interest had to be repaid in full on November 15, 2024. However, the Company did not borrow any funds from the MIRALOGX loan during the year ended December 31, 2024 or December 31, 2023 and the Loan Agreement expired on November 15, 2024.

 

Bay Shore Trust

 

In May 2021, the Company entered into a revolving credit facility which allowed for borrowings of up to $5 million from Starwood Trust, a shareholder of the Company. The facility had an initial term of 24 months (extended to 36 months in March 2023), with a new maturity date of May 10, 2024, at which time all outstanding borrowings and accrued interest, if any, were due in full. Borrowings accrued interest at a rate of 5% per annum.

 

In April 2023, the Company entered into a Promissory Note and Loan Agreement with the Bay Shore Trust, a trust established by the largest shareholder of the Company. Under this Promissory Note and Loan Agreement (the “Bay Shore Note”), the Company had the right to borrow up to an aggregate of $5 million from the Bay Shore Trust at any time up to the second anniversary of the issuance of the Bay Shore Note or, if earlier, upon the completion of the Company’s IPO.

 

The Bay Shore Note replaced the revolving credit facility that the Company entered into with Starwood Trust, and pursuant to which the Company had an outstanding principal balance of $0.2 million as of the date of the Bay Shore Note (which outstanding balance was retired with an advance under the Bay Shore Note).

 

In consideration of the loan facility provided by the Bay Shore Trust, in April 2023, the Company issued to the Bay Shore Trust a common stock purchase warrant giving the Bay Shore Trust the right to purchase up to 1,000,000 shares of common stock at an exercise price of $5.00 per share, which warrant will expire five years after the date of grant. Pursuant to a registration rights agreement, the Company registered for resale the shares issuable upon the exercise of the warrant in December 2023. See Note 8 for additional details related to these warrants.

 

On July 20, 2023, the Company entered into a conversion agreement with the Bay Shore Trust under which the Bay Shore Trust had agreed to convert, upon the completion of the IPO, $1.1 million of the outstanding principal balance of the Bay Shore Note into shares of the Company’s common stock at a conversion price equal to the Company’s IPO price, which resulted in the issuance of 157,170 shares to the Bay Shore Trust. On August 14, 2023, the Company paid $1.0 million in full to Bay Shore Trust, which was the amount due. The Company also paid accrued interest of $0.03 million. Both amounts are recorded in the accompanying statement of operations for the year ended December 31, 2023 as interest expense. The remaining amount of $0.01 million in accrued interest due to Bay Shore Trust was paid as of December 31, 2024, as reflected in the accompanying financial statements, and the Note is no longer active.

 

 

MIRA PHARMACEUTICALS, INC.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023