NOTE 5 – CONVERTIBLE NOTES PAYABLE, NET

As of December 31, 2025 and 2024, the Company had outstanding convertible notes payable to unaffiliated individuals. The convertible notes bear interest at fixed rates, have stated maturities ranging from 2018 through 2028, and contain conversion features that permit or require conversion into shares of the Company’s common stock, as applicable, upon the occurrence of specified events or at the election of the holder. Certain notes were in default as of December 31, 2025.

Convertible notes outstanding as of December 31, 2025 were as follows:

As of December 31, 2025, $102,072 of the carrying amount was classified as current and $434,100 was classified as long-term. The five-year maturity for the convertible notes payable is as follows:

Convertible notes outstanding as of December 31, 2024 were as follows:

As of December 31, 2024, $45,000 was classified as current and $34,000 was classified as long-term.

Convertible Note Payable – In Default

In July 2018, the Company issued a convertible promissory note to an unrelated individual with a principal amount of $45,000. Principal and accrued interest were originally due in July 2018, and the note is currently in default. The note bears interest at a rate of 18% per annum, accrues monthly, and is unsecured.

The note, together with all unpaid accrued interest, is automatically convertible in full upon the closing of a qualified financing. A qualified financing is defined as an equity financing resulting in gross proceeds to the Company of at least $750,000, including the conversion of this note and other debt. Upon a qualified financing, the conversion price would be equal to 100% of the per-share price paid by investors in the financing, subject to valuation adjustments ranging from a minimum valuation of $15,000,000 to a maximum valuation of $30,000,000.

Interest expense related to this note was $8,100 and $8,123 for the years ended December 31, 2025 and 2024, respectively. Accrued interest totaled $68,617 and $60,517 as of December 31, 2025 and 2024, respectively.

November 2025 Convertible Promissory Note (Original Issue Discount and Derivative Liability)

On November 7, 2025, the Company issued an unsecured convertible promissory note to an unaffiliated accredited investor for cash proceeds of $50,000. The note has a stated principal balance of $55,555, reflecting an original issue discount (“OID”) of $5,555, bears interest at 15% per annum (simple interest), and matures on September 7, 2026.

Beginning 180 days after issuance, the note is convertible at the option of the holder into shares of the Company’s common stock at a conversion price equal to 75% of the lowest volume-weighted average price (“VWAP”) of the Company’s common stock during the twenty (20) consecutive trading days immediately preceding the conversion date, subject to a floor price of $0.15 per share. Accrued and unpaid interest is convertible on the same terms. The note includes a beneficial ownership limitation of 4.99%, which may be increased to 9.99% upon advance notice. The November 2025 Convertible Promissory Note includes an embedded conversion feature that is accounted for as a derivative liability under ASC 815. See Note 7.

The derivative liability was recognized at fair value on the issuance date, with the initial value of $29,647 recorded as a component of the debt discount which is being amortized over the term of

the note. The derivative liability is subsequently remeasured at fair value at each reporting period, with changes in fair value recognized in the consolidated statement of operations. As of December 31, 2025, the derivative liability associated with this note is included in Derivative liabilities – convertible instruments on the consolidated balance sheet.

In connection with the financing, the Company issued 100,000 shares of its common stock to the investor as additional consideration. Under ASC 470 shares issued with debt are required to be valued at relative fair value and recorded as a debt discount. The relative fair value of these shares on the date of issuance was $4,297 and was recorded as a component of the debt discount which is being amortized to interest expense over the term of the note.

The Company recorded a total debt discount at issuance consisting of (i) the original issue discount, (ii) the fair value of the embedded derivative liability, and (iii) the fair value of shares issued in connection with the financing for a total of $39,499. This total debt discount is amortized to interest expense over the term of the note using the effective interest method.

As of December 31, 2025, the convertible note is presented net of an unamortized debt discount of $32,483 on the consolidated balance sheet. The Company recognized $7,016 in amortization of the debt discount as interest expense during the year ended December 31, 2025.

Interest expense related to this note was $1,279 for the year ended December 31, 2025. Accrued interest totaled $1,279 as of December 31, 2025.

Series 2023 Mandatorily Convertible Notes

In May 2023, the Board of Directors authorized an offering of up to $1,000,000 of mandatorily convertible notes, designated as Series 2023 10% Mandatorily Convertible Notes (the “Series 2023 Notes”). During 2023 the Company raised $34,000 through issuance of Series 2023 Notes. The Series 2023 Notes mature 36 months from the issue date (which range between June 1, 2026 and October 2, 2026), and bear interest at 10% per annum. The Series 2023 Notes are mandatorily convertible 30 calendar days after the earliest to occur of: (i) the Company’s common stock achieving a closing price greater than $1.00 for ten consecutive trading days (a “Market Forced Conversion”), or (ii) the Company completing an offering of common stock resulting in gross proceeds of at least $1,000,000 (an “Offering Forced Conversion”). Upon conversion, the Series 2023 Notes will automatically convert into shares of common stock at a conversion price equal to 75.8% of: (i) the closing price of the Company’s common stock on the tenth trading day for a Market Forced Conversion, or (ii) the offering price of the Company’s common stock for an Offering Forced Conversion. These notes include an embedded conversion feature that is accounted for as a derivative under ASC 815. See note 7.

The number of shares issuable upon conversion is determined by adding the principal amount of the Series 2023 Notes, accrued and unpaid interest, and any applicable default interest, and dividing by the applicable conversion price. The conversion price is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company, combinations, recapitalizations, reclassifications, extraordinary distributions, and similar events.

As of December 31, 2025 and 2024 the outstanding balance of these notes is $34,000.

Interest expense was $3,408 and $3,426 for the years ended December 31, 2025 and 2024, respectively. Accrued interest totaled $8,549 and $5,141 as of December 31, 2025 and 2024, respectively.

Series 2025 Notes Mandatorily Convertible Notes

During the year ended December 31, 2025, the Company issued Series 2025 Notes. These notes are substantially similar to the Series 2023 Notes, except that they convert at 50% of the applicable offering price, or if the Company’s common stock trades at or above $1.00 ($0.50 for the March

18 Note) for 10 consecutive trading days, in which case they convert at 50% of the closing price on the tenth day. Of the total issuance, $130,000 was issued for cash and $304,100 was issued in exchange for outstanding liabilities for a total of $434,100 of Series 2025 notes issued during 2025.

On March 18, 2025, the Company issued a Series 2025 Note in the principal amount of $61,000 to an individual investor. The principal amount includes $26,000 of previously accrued liabilities for services rendered, which was exchanged in accordance with a liability conversion agreement executed on the same date. The remaining $35,000 represents new cash proceeds received by the Company. Upon execution of the Series 2025 Note, the previously recorded liability was extinguished and reclassified as part of the convertible debt obligation.

On April 25, 2025, the Board approved the exchange of certain outstanding liabilities into Series 2025 Notes, effective as of March 31, 2025. These include the following:

·A promissory note with a principal balance of $5,500 and an accrued interest balance of $705, was exchanged for a new Series 2025 Note in the face amount of $6,200. The Company recorded a gain on extinguishment of debt of $5 for the year ended December 31, 2025 upon the exchange. 

·Outstanding accrued legal fees and finance charges totaling $424,930 were exchanged for a new Series 2025 Note in the face amount of $250,000. The Company recorded a gain on extinguishment of debt of $174,930 for the year ended December 31, 2025 upon the exchange. 

·An outstanding and overdue accounts payable of $8,270 and accrued interest of $230 was exchanged for a new Series 2025 Note in the face amount of $8,500.  

·A promissory note with a principal balance of $11,667 and accrued interest balance of $1,733, was exchanged for a new Series 2025 Note in the face amount of $13,400.  

The following Series 2025 Notes were issued for cash during the year ended December 31, 2025 all of which mature 36 months after issuance:

·$10,000 issued to an unrelated individual on February 24, 2025.  

·$25,000 issued to an unrelated individual on April 16, 2025. 

·$12,500 issued to an unrelated individual on April 21, 2025. 

·$12,500 issued to an unrelated individual on April 28, 2025. 

·$10,000 issued to an unrelated individual on June 23, 2025. 

·$15,000 issued to an unrelated individual on August 15, 2025. 

·$10,000 issued to an unrelated individual on October 20, 2025. 

As of December 31, 2025 the outstanding balance of these notes was $434,100. The Company recognized a gain on extinguishment of $174,935 during the year ended December 31, 2025.

Interest expense totaled $31,897 for the year ended December 31, 2025. Accrued interest totaled $31,668 as of December 31, 2025.

Embedded Conversion Features

The Company evaluated the embedded conversion features associated with its convertible notes under ASC 470 and ASC 815. Based on this evaluation, the Company determined that certain embedded features are required to be bifurcated and accounted for as derivative liabilities.

These derivative liabilities are presented separately on the consolidated balance sheet as Derivative liabilities – convertible instruments, with changes in fair value recognized in earnings. See Note

7. The Company will reassess these conclusions in future periods for any modifications or changes in circumstances.