Notes Payable and Convertible Notes Payable |
3 Months Ended | ||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||
| Notes Payable and Convertible Notes Payable [Abstract] | |||||||||||||||||||||||||||||||
| Notes Payable and Convertible Notes Payable | Note 3 – Notes Payable and Convertible Notes Payable
Notes Payable - Net
Between June 2012 and October 2023, the Company issued promissory notes to 13 individuals in the aggregate of $1,370,009 with various interest rates ranging from 0% to 12% and maturity dates of March 31, 2026. On April 5, 2026, the Company agreed to extend the maturity dates of some notes to September 30, 2026 without any penalties or consideration. The promissory notes are unsecured. On May 1, 2025, the Company redeemed a Promissory Note with a principal balance of $100,000 and accrued interest of $12,603. As of March 31, 2026 and December 31, 2025, the Company had outstanding Notes Payable of $1,270,009 and $1,270,009, respectively.
Convertible Notes Payable - Net
The Company had the following activity related to its convertible notes payable:
Note issued in 2026
On February 5, 2026, the Company entered into a Securities Purchase Agreement with Alumni Capital LP (“Alumni”) (“Alumni SPA Agreement”), pursuant to which the Company issued a convertible promissory note in the original principal amount of $250,000 (the “Alumni Note”) together with the Alumni Warrant. The aggregate cash purchase price received for both instruments was $200,000 (after OID of $50,000), and the Alumni Note originally matured on May 4, 2026, and on May 4, 2026 the maturity was extended to June 15, 2026. The proceeds are allocated first to the warrant liability based on their fair value and the residual is allocated to the remaining debt.
The Alumni Note bears no stated interest. Upon an event of default as defined by the Alumni SPA Agreement, default interest accrues at 15% per annum, and the holder may convert the outstanding balance into common shares, require redemption upon an Event of Default. The Alumni Note is convertible on maturity or after the event of default. The conversion price is the lowest traded price during the twenty (20) business days immediately prior to delivery of a conversion notice multiplied by seventy percent (70%). The conversion feature becomes exercisable only upon an event of default. Accordingly, management concluded no bifurcated derivative existed as of March 31, 2026.
The Alumni Note is also subject to mandatory redemption upon the consummation of any subsequent financing of $2,000,000 or more.
Note issued in 2025
In January 2025, the Company entered into securities purchase agreements (the “SPAs”) with 2 individuals, pursuant to which the Company agreed to issue to the Investors Promissory Notes (the “Notes”), in the aggregate principal amount of $100,000 with an interest rate of 8% per annum. The Notes mature twelve (12) months from the dates of issue. The principal amounts of the notes together with any accrued interest are convertible into common shares at any time prior or at maturity at a price of $0.10 per common share. The Notes, together with any accrued interest, shall automatically convert into common shares at a price of $0.10 per share upon the successful uplisting of the Company’s common stock onto the NASDAQ, CBOE or NYSE American stock exchanges.
In April and May 2025, the Company entered into securities purchase agreements (the “SPAs”) with 7 individuals, pursuant to which the Company agreed to issue to the Investors Promissory Notes (the “Notes”), in the aggregate principal amount of $650,000 with an interest rate of 8% per annum. The Notes mature twelve (12) months from the dates of issue. If, prior to the Maturity Date, the Company’s securities are accepted for listing on a national securities exchange (an “Uplist”), then the outstanding principal and interest of the Notes shall automatically convert into Common Stock, at a conversion price equal to: (a) if in connection with the Uplist the Company issues and sells shares of its Common Stock, or securities convertible into or exchangeable for shares of Common Stock, whether in a public offering or a private placement, eighty-five percent (85%) of the per share price paid by the investors in such offering, or (b) otherwise eighty-five percent (85%) of the VWAP of the Common Stock on the day on which the Company’s Common Stock first opens for trading on such exchange, or (b) if the Notes have not previously been converted then upon the Maturity Date, the Conversion Amount shall be convertible, at the election of the Holder, into Common Stock at a conversion rate equal to a eighty-five percent (85%) of the average VWAP for the five Trading Days immediately preceding the Maturity Date.
Notes issued in 2024
Between March 2024 and November 2024, the Company entered into securities purchase agreements (the “SPAs”) with 16 individuals in the aggregate of $578,708 with an interest rate of 8%. The Notes mature twelve (12) months from the dates of issue. The principal amounts of the notes together with any accrued interest are convertible into common shares at any time prior or at maturity at a price of $0.10 per common share. The Notes, together with any accrued interest, shall automatically convert into common shares at a price of $0.10 per share upon the successful uplisting of the Company’s common stock onto the NASDAQ, CBOE OR NYSE American stock exchanges. On April 3, 2025, the Company entered into Note Extension and Modification Agreements with 11 of our Noteholders, extending the maturity dates on their Notes to December 31, 2025. The conversion features of the notes were modified such that if, prior to the Maturity Date, the Company’s securities are accepted for listing on a national securities exchange (an “Uplist”), then the outstanding principal and interest of the Notes shall automatically convert into Common Stock, at a conversion price equal to: (a) if in connection with the Uplist the Company issues and sells shares of its Common Stock, or securities convertible into or exchangeable for shares of Common Stock, whether in a public offering or a private placement, eighty-five percent (85%) of the per share price paid by the investors in such offering, or (b) otherwise eighty-five percent (85%) of the VWAP of the Common Stock on the day on which the Company’s Common Stock first opens for trading on such exchange, or (b) if the Notes have not previously been converted then upon the Maturity Date, the Conversion Amount shall be convertible, at the election of the Holder, into Common Stock at a conversion rate equal to a eighty-five percent (85%) of the average VWAP for the five Trading Days immediately preceding the Maturity Date. In March, 2026, the Company agreed to extend the maturity dates of their Notes to September 30, 2026. Modification and Extinguishment of Convertible Notes Payable
In March 2026, the Company extended the maturity dates of some notes listed above to September 30, 2026. The Company evaluated the modification of terms and concluded that the extension of the maturity dates did not result in significant and consequential changes to the economic substance of the debt, and thus resulted in a modification of the debt and not an extinguishment of the debt. Specifically, on the date of modification, the Company determined that the present value of the cash flows of the modified debt instruments were less than 10% different from the present value of the remaining cash flows under the original debt instruments. Accordingly, no gain or loss on debt extinguishment was recorded.
Interest expense and amortization of debt discount
During the three months ended March 31, 2026 and 2025, the Company recorded interest expense for notes payable and convertible notes of $91,552 and $20,355, respectively.
During the three months ended March 31, 2026 and 2025, the Company recorded amortization of debt discount of $146,207 and , respectively. |