| Convertible Notes Payable |
Note
7 – Convertible Notes Payable
Convertible
notes payable consist of the following at September 30, 2025 and 2024, respectively:
Schedule of Convertible Notes Payable
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September 30, | | |
September 30, | |
| | |
2025 | | |
2024 | |
| | |
| | |
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| (1) On February 11, 2020, the
Company completed the sale to an accredited investor of a 9% Secured Convertible Promissory Note in the principal amount of $50,000.
The Note matures on August
11, 2022, bears interest at a rate of 9%
per annum, and was convertible into shares of the Company’s common stock at a conversion price of $0.15
per share. On December 28, 2020, the conversion price was amended to $0.03
per share in exchange for an additional $10,000
of proceeds and the promissory note was increased to $60,000.
The Company’s obligations under the Note are secured by a lien on the assets of the Company and its wholly-owned subsidiary
Digipath Labs, Inc., pursuant to a Security Agreement between the Company, Digipath Labs, Inc. and the investor. On December 29,
2020, the note holder converted $10,000
of principal into 333,334
shares of common stock at a conversion price of $0.03
per share. On August 8, 2022, the note holder agreed to extend the maturity date of the note to February
11, 2024. In exchange for the extension, the Company agreed to issue 650,000
common shares, which were recorded as debt discount, with a relative fair value of $6,989.
On August 18, 2025, the note holder agreed to extend the maturity date of the note to July
31, 2027 in exchange for a deferred payment of $1,500
allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | |
$ | 51,500 | | |
$ | 50,000 | |
| | |
| | | |
| | |
| (2) On September 23, 2019, the Company received
proceeds of $200,000 on a senior secured convertible note that carries an 8% interest rate, which matured on August 10, 2022, as
amended. The principal and interest were convertible into shares of common stock at the discretion of the note holder at a fixed
conversion price of $0.11 per share. On September 30, 2020, the maturity date was extended to August 10, 2022 and the conversion
price was amended to $0.03 per share. The Company’s obligations under this Note are secured by a lien on the assets of the
Company and its wholly-owned subsidiary Digipath Labs. On February 22, 2021, the noteholder converted $90,000 of principal into 3,000,000
shares of common stock at a conversion price of $0.03 per share. On September 30, 2021, the note was amended to add the outstanding
short term notes and accrued interest into the principal balance, making the outstanding balance $355,469, as amended. As a result
of the modification, the Company recorded an additional debt discount of $98,188, as a result of the beneficial conversion feature
of the additional principal. On October 1, 2022, the Company further extended the maturity date to February 11, 2024. In connection
with the modification, the Company issued warrants to purchase 4,621,105 shares of common stock, with a fair value of $32,166, which
was recorded as a debt discount. On January 22, 2024 the Company further amended the note to extend the maturity date to February
11, 2025 and reduced the conversion price to $0.01. As a result of the modification of the conversion price, the Company recorded
a loss on debt extinguishment of $481,955. On February 10, 2025, the note holder agreed to further extend the maturity date of the
note to July 31, 2025 in exchange for a deferred payment of $4,000. On August 18, 2025, the note holder agreed to extend the maturity
date of the note to July 31, 2027 in exchange for a deferred payment of $9,299 allocated to this note which was added to the principal
balance and recorded as a loss on extinguishment of debt. | |
| 366,134 | | |
| 355,469 | |
| | |
| | | |
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| (3) On November 8, 2018, the Company
received proceeds of $350,000
on a senior secured convertible note that carries an 8%
interest rate, which matured on August
10, 2022, as amended. The principal and interest were convertible into shares of common stock at the discretion of the note
holder at a fixed conversion price of $0.14
per share. On September 30, 2020, the maturity date was extended to August
10, 2022 and the conversion price was amended to $0.03
per share. The Company’s obligations under this Note are secured by a lien on the assets of the Company and its wholly-owned
subsidiary Digipath Labs. On October 1, 2022, the Company further extended the maturity date to February
11, 2024. In connection with the modification, the Company issued warrants to purchase 4,550,000
shares of common stock, with a fair value of $31,671
which was recorded as a debt discount. On January 29, 2024, the holder converted $40,000
of this note into common shares. On January 22, 2024, the Company further amended the note to extend the maturity date to February
11, 2025 and reduced the conversion price to $0.01.
As a result of the modification of the conversion price, the Company recorded a loss on debt extinguishment of $474,539.
On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July
31, 2025 in exchange for a deferred payment of $7,000.
On August 18, 2025, the note holder agreed to extend the maturity date of the note to July
31, 2027 in exchange for a deferred payment of $10,664
allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | |
| 319,300 | | |
| 350,000 | |
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| 4) On October 1, 2022, the Company entered
into a senior secured convertible note that carries an 8%
interest rate, which matured on February
11, 2024. The Note documented the advances made during the year ended September 30, 2022 in the amount of $362,765.
The principal and interest on the Note are convertible into common shares at a conversion price of $0.01.
In connection with the note, the Company issued warrants to purchase 4,715,945
shares of common stock, with a fair value of $30,102,
which was recorded as a debt discount. On January 22, 2024, the note holder agreed to extend the maturity date of the Note to February
11, 2025. On February 10, 2025, the note holder agreed to further extend the maturity date of the note to July
31, 2025 in exchange for a deferred payment of $7,255.30.
On August 18, 2025, the note holder agreed to extend the maturity date of the note to July
31, 2027 in exchange for a deferred payment of $10,883
allocated to this note which was added to the principal balance and recorded as a loss on extinguishment of debt. | |
| 373,648 | | |
| 362,765 | |
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| | | |
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| (5) On June 5, 2025, the Company received
proceeds of $133,000 on a senior secured convertible note that carries an 8% interest rate, which matures on May 31, 2028. The principal
and interest are convertible into shares of common stock at the discretion of the note holder at a fixed conversion price of $0.03
per share. | |
| 133,000 | | |
| - | |
| | |
| | | |
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| (6) On July 31, 2025,
the Company received proceeds of $60,000 on a senior secured convertible note that carries an 8% interest rate and an original issue
discount of $3,000, which matures on March 31, 2028. The principal and interest are convertible into shares of common stock at the
discretion of the note holder at a fixed conversion price of $0.03 per share. | |
| 63,000 | | |
| - | |
| | |
| | | |
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| Total convertible notes payable | |
| 1,306,582 | | |
| 1,078,235 | |
| Less: unamortized debt
discounts | |
| (2,750 | ) | |
| - | |
| Total | |
| 1,303,832 | | |
| 1,078,235 | |
| Less: current maturities | |
| (1,303,832 | ) | |
| (1,078,235 | ) |
| Convertible notes
payable | |
$ | - | | |
$ | - | |
During
the year ended September 30, 2025, the Company recorded debt discounts in the aggregate of $3,000 related to the finance charges added
to principal balance on the creation of the new note. As a result of the extension of the prior notes which matured on July
31, 2025 the Company recorded a loss on debt extinguishment of $32,347. The Company recorded debt amortization
expense attributed to the debt discount in the amounts of $2,132 and $43,050, during the years ended September 30, 2025 and 2024, respectively.
Unamortized discount as of September 30, 2025 is $2,750.
All
of the convertible notes limit the maximum number of shares that can be owned by each note holder as a result of the conversions to common
stock to 4.99% of the Company’s issued and outstanding shares except the note to the related party.
The
Company recorded interest expense pursuant to the stated interest rates on the convertible notes in the amount of $93,030 and $89,603
for the years ended September 30, 2025 and 2024, respectively.
The
Company recognized interest expense for the years ended September 30, 2025 and 2024, respectively, as follows:
Schedule of Interest Expense
| | |
September
30,
2025 | | |
September
30,
2024 | |
| | |
| | |
| |
| Interest on notes payable | |
$ | 10,981 | | |
$ | 36,614 | |
| Amortization of debt discounts | |
| 2,132 | | |
| 43,050 | |
| Interest on convertible
notes | |
| 93,030 | | |
| 89,603 | |
| Total
interest expense | |
$ | 106,143 | | |
$ | 169,267 | |
|