| Related Party Transactions |
Note 10 – Related Party Transactions The related parties that had material transactions for the nine months ended September 30, 2025 and 2024, consist of the following: Related Party | | Nature of Relationship to the Company | A | | An Ohio limited liability company - a significant shareholder | B | | Owner of A and our former Chief Executive Officer of the Company from April 1, 2025 to October 1, 2025. Current Chairman of the Board of Directors. | C | | Chief Executive Officer of the Company until March 31, 2025 and Vice President of Operations from April 1, 2025. | D | | A California limited liability company owned by a related party E | E | | Significant shareholder and our Chief Technology Officer | F | | Director and Chief Executive Officer of GEVI Insurance Holdings Inc. | G | | A Delaware limited liability company – Series A Preferred shareholder | H | | A company controlled by our Chief Financial Officer |
For the nine months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of: | | Nine Months Ended | | | | | | | | | September 30, | | | | | | | Related Party | | 2025 | | | 2024 | | | Nature of transaction | | Financial Statement Line Item | | A | | $ | 2,103,600 | | | $ | - | | | 150,000 Series C preferred stock for consulting fee | | Professional fees - related party | | A | | $ | 25,300 | | | $ | 6,495 | | | Payment operating expenses on behalf of the Company | | Due to related party | | A | | $ | 25,000 | | | $ | 60,000 | | | Repayment loan | | Due to related party | | D | | $ | 21,600 | | | $ | 64,800 | | | Cash paid for consulting fees | | Professional fees - related party | | D | | $ | 4,000 | | | $ | 16,200 | | | Cash paid for consulting and advisory fees | | Cost of revenue - related party | | E | | $ | - | | | $ | 108,808 | | | Cash paid for management fee | | Professional fees - related party | | E | | $ | 91,290 | | | $ | 83,192 | | | Cash paid for royalty and sales commissions | | Cost of revenue - related party | | F | | $ | 420,720 | | | $ | - | | | 30,000 Series C preferred stock for management compensation | | Management compensation | | F | | $ | - | | | $ | 348,000 | | | 20,000 shares of Series C preferred stock for advisory fee | | Professional fees - related party | | G | | $ | 2,511,855 | | | $ | - | | | 69,007 Series C preferred stock for services | | Financing expense | | H | | $ | 16,065 | | | $ | - | | | Edgar filing expense | | General and administrative | | H | | $ | 39,624 | | | $ | - | | | Professional service - accounting | | Professional fees - related party | |
For the three months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of: | | Three Months Ended | | | | | | | | | September 30, | | | | | | | Related Party | | 2025 | | | 2024 | | | Nature of transaction | | Financial Statement Line Item | | D | | $ | 5,600 | | | $ | 23,200 | | | Cash paid for consulting fees | | Professional fees - related party | | D | | $ | - | | | $ | 5,800 | | | Cash paid for consulting and advisory fees | | Cost of revenue - related party | | E | | $ | - | | | $ | 39,544 | | | Cash paid for management fee | | Professional fees - related party | | E | | $ | - | | | $ | 20,456 | | | Cash paid for royalty and sales commissions | | Cost of revenue - related party | | H | | $ | 1,458 | | | $ | - | | | Edgar filing expense | | General and administrative | | H | | $ | 20,224 | | | $ | - | | | Professional service -accounting | | Professional fees - related party | |
Convertible notes – related parties The components of convertible notes as of September 30, 2025 and December 31, 2024, were as follows: | | | | | | | Effective | | | Stated | | | | | | | | | | Principal | | | Maturity | | Interest | | | Interest | | | September 30, | | | December 31, | | Payment date | | Amount | | | date | | Rate | | | Rate | | | 2025 | | | 2024 | | December 1, 2024 | | $ | 576,693 | | | December 31, 2025 | | | - | | | | 10 | % | | $ | 576,693 | | | $ | 576,693 | | February 2025 | | $ | 2,000,000 | | | February 28, 2026 | | | 128 | % | | | 10 | % | | | 2,000,000 | | | | - | | Total Convertible notes | | | | | | | | | | | | | | | | $ | 2,576,693 | | | $ | 576,693 | | Less: Unamortized debt discount | | | | | | | | | | | | | | | | | (729,143 | ) | | | - | | | | | | | | | | | | | | | | | | | 1,847,550 | | | | 576,693 | | Less: Current portion | | | | | | | | | | | | | | | | | (1,847,550 | ) | | | (576,693 | ) | Long-term portion | | | | | | | | | | | | | | | | $ | - | | | $ | - | |
On December 31, 2024, the Company issued a convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.16. The conversion price is a fixed price and the Company determined that conversion feature did not need to be bifurcated. The Company has accounting for the convertible debt at amortized cost under ASC 470-20. In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party G. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, related party G could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio. The Company paid 8% original discount of $160,000 and financing fee of $63,918 and recorded these financing costs as debt discount. The Company has accounted for the convertible debt at amortized cost under ASC 470-20. During the nine months ended September 30, 2025, the Company recognized the debt discount of $1,824,087 (Original Issued Discounts of discount and financing fee of $223,918 and warrants of $1,600,169). During the three and nine months ended September 30, 2025, the Company recognized interest expenses of $64,946 and $160,393 and amortization of debt discount of $915,548 and $1,094,944, respectively. As of September 30, 2025, the Company recorded accrued interest of $160,393.
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