NOTE E – DEBT

The Company’s debt consists of the following:

In February 2020, we issued a note in the amount of $625,000 bearing simple interest at a rate of 7% per annum to Mr. Christopher Stuart, a director of the Company, initially due in August 2021 (the “$625,000 Note”). The note, as amended, contains a feature that allows the Company to extend the maturity date up to six months, nine times, in the Company’s sole discretion. This note was issued along with 62,500 common stock purchase warrants that were determined to have a fair market value of $80,053 on the issuance date, which was recorded as a debt discount and amortized over the term of the notes, being fully amortized by year end December 31, 2021. The Company has exercised all nine extensions extending the maturity date of the note to February 13, 2026.

In October 2021, the president of the Company loaned the Company $10,000 pursuant to an unsecured promissory note bearing simple interest at a rate of 5% per annum initially due on October 21, 2022. The note was amended in October 2022 to extend the maturity date to October 21, 2023 and in November 2023 to extend the maturity date to October 21, 2024. The maturity date of the note, as amended, may be extended by an additional six months in the sole discretion of the Company up to two times. The Company exercised one extension extending the maturity date of the note to April 21, 2025 and repaid the $10,000 note plus accrued but unpaid interest in the amount $1,778 in April 2025.

In January 2023, the president of the Company loaned the Company $25,000 pursuant to an unsecured promissory note initially due on March 31, 2024 and initially bearing simple interest at a rate of 7% per annum. The note was amended in March 2025 to allow the Company to extend the maturity date up to six months, six times instead of two times, in the Company’s sole discretion, in consideration for increasing the interest rate of the note to 7.5%, effective April 1, 2025. The Company has exercised three extensions extending the maturity date of the note to September 30, 2025.

In February 2023, we commenced an offering of up to $25,000,000 of 9.5% secured convertible promissory notes (“2023 Notes”) pursuant to a private placement in accordance with Rule 506(c) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The 2023 Notes together with all accrued and unpaid interest will be payable on or before December 31, 2024 and will be secured by a perfected recorded first priority security interest in the Company’s LPN-16 patent. If the Company’s common stock is listed on the NASDAQ Capital Markets on or before the maturity date, the outstanding 2023 Notes will automatically be converted into shares of the Company’s common stock at a rate equal to the price per share in the public offering. If the 2023 Notes have not otherwise been automatically converted into shares of the Company’s common stock, these noteholders will have the option, on or before the maturity date, to convert all or a portion of their outstanding 2023 Notes into shares of the Company’s common stock at a rate equal to $5.00 per share and, immediately upon the conversion, the converting noteholders will be issued a number of new warrants from the Company equal to the dollar amount of the conversion divided by $5.00 (the “2023 Warrants”). The 2023 Warrants will be exercisable until December 31, 2024 at an exercise price equal to the greater of (i) five dollars ($5.00) or (ii) eighty-five percent (85%) of the 10-day moving average of the Company’s public trading price if the Company’s securities are trading on a public securities trading market. As of June 30, 2025, the Company had issued a total of $2,289,515 of 2023 Notes pursuant to this offering which ended in October 2023, including $1,925,000 of which was converted into common stock and 2023 Warrants during the year ended December 31, 2023 and $309,515 of which was converted into common stock and 2023 Warrants during the year ended December 31, 2024. In December 2024, the maturity date of the remaining $55,000 of 2023 Notes held by two investors was extended to December 31, 2025 in consideration for extending the expiration date of the 2023 Warrants, if issued, to December 31, 2025.

In July 2024, we commenced an offering of up to $10,000,000 of 9.5% secured convertible promissory notes (“2024 Notes”) pursuant to a private placement in accordance with Rule 506(c) of Regulation D of the Securities Act. The 2024 Notes together with all accrued and unpaid interest will be payable on or before December 31, 2025 and will be secured by a perfected recorded subordinate security interest in the Company’s LP-16 patent. If the Company’s common stock is listed on the NASDAQ Capital Markets on or before the maturity date, the outstanding 2024 Notes will automatically be converted into shares of the Company’s common stock at a rate equal to the price per share in a public offering or, in the event of a direct listing of the Company’s common stock, the reference price on the closing date of the listing. If the 2024 Notes have not otherwise been automatically converted into shares of the Company’s common stock, these noteholders will have the option, on or before the maturity date, to convert all or a portion of their outstanding 2024 Notes into shares of the Company’s common stock at a rate equal to $5.00 per share and, immediately upon the conversion, the converting noteholders will be issued a number of new warrants from the Company equal to the dollar amount of the conversion divided by $5.00 (“2024 Warrants”). The 2024 Warrants will be exercisable until December 31, 2025 at an exercise price equal to the greater of (i) five dollars ($5.00) or (ii) eighty-five percent (85%) of the 10-day moving average of the Company’s public trading price if the Company’s securities are trading on the NASDAQ Capital Markets. As of June 30, 2025, the Company has issued a total of $585,000 of 2024 Notes pursuant to this offering, including $50,000 of which was purchased by Mr. Stuart and $50,000 of which was converted into common stock and 2024 Warrants.

In October 2024, the president of the Company loaned the Company $10,000 pursuant to an unsecured promissory note due on October 28, 2025. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to four times.

In December 2024, we amended an unsecured promissory note issued to one investor in the amount of $50,000 bearing simple interest at a rate of 9.5%, due on December 31, 2024, in order to extend the maturity date of the note by allowing the Company to extend the maturity date of the note by five additional six month periods instead of two additional six month periods in consideration for permitting the optional conversion of the note into shares of the Company’s common stock and the possible issuance of warrants to purchase shares of the Company’s common stock if the note is converted on or before December 31, 2025. The Company has exercised four extensions extending the maturity date of the note to December 31, 2025.

In December 2024, the president of the Company loaned the Company $10,000 pursuant to an unsecured promissory note due on December 9, 2025. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to four times.

In January 2025, the president of the Company loaned the Company $15,000 and $20,000 pursuant to two unsecured promissory notes initially due on January 3, 2026 and January 23, 2026, respectively. The notes bear simple interest at a rate of 7% per annum. The maturity dates of the notes may be extended by an additional six months in the sole discretion of the Company up to four times.

In February 2025, we commenced an offering of up to $1,000,000 of convertible promissory notes (“2025 Notes”) pursuant to a private placement in accordance with Rule 506(b) of Regulation D of the Securities Act (the “2025 Note Offering”). The 2025 Notes were initially due and payable on or before May 31, 2025, unless extended by the Company for six months up to two times. The Company has exercised one extension extending the maturity date of the 2025 Notes to November 30, 2025. The 2025 Notes will automatically be converted into shares of the Company’s common stock at a price per share of $1.00 if on any trading day following the issuance of the 2025 Notes the Company’s common stock (i) trades an average daily trading volume of 50,000 or greater and (ii) achieves an intraday or closing price of $5.00 (together, the “Trading Thresholds”). Upon the automatic conversion of the 2025 Notes, the Company will, no later than 30 days from the date of such conversion following satisfaction of the Trading Thresholds, file with the Securities and Exchange Commission a registration on Form S-1 (or such other form as may be available) to register the shares underlying all outstanding 2025 Notes; provided, however, that if such registration statement is due at a time in which the Company cannot file such registration statement because the Company has stale financial statements, then the Company shall file such registration statement by not later than ten days following the date on which the filing of such financial statements are due. If the 2025 Notes have not otherwise been automatically converted into shares of the Company’s common stock, these noteholders will have the option, on or before the maturity date, to convert all or a portion of their outstanding 2025 Notes into shares of the Company’s common stock at a rate equal to $1.00 per share and, immediately upon the conversion, the converting noteholders will be issued a number of new warrants from the Company equal to the dollar amount of the conversion divided by $1.00 (the “2025 Warrants”). The 2025 Warrants will be exercisable until December 31, 2025 at an exercise price equal to the greater of (i) one dollar ($1.00) or (ii) eighty-five percent (85%) of the 10-day moving average of the Company’s public trading price as quoted on the OTC Markets or equivalent or higher public securities trading market on which the Company’s common stock is then traded with the highest volume. As of June 30, 2025, the Company has issued a total of $666,000 of 2025 Notes pursuant to this offering, including $40,000 of which was purchased by Mr. Stuart, $40,000 of which was purchased by an affiliate of Mr. Stuart, and $10,000 of which was purchased by the president of the Company. In assessing whether the automatic conversion feature of our convertible debt instruments meets the definition of a derivative under ASC 815, we evaluated the net settlement criterion, including whether the underlying shares are readily convertible to cash. Any shares directly received from the automatic conversion are restricted from resale under Rule 144 of the Securities Act, which governs the public resale of restricted securities. As a result, while the shares are restricted from resale under Rule 144 of the Securities Act, they are not considered readily convertible to cash, and the net settlement criterion is not satisfied. Consequently, the automatic conversion feature does not qualify for derivative accounting treatment under ASC 815 during this period. We will continue to reassess the classification on an ongoing basis, and if the restriction lapses and the shares become freely tradable in an active market, the conversion feature and associated warrants may subsequently meet the net settlement criterion and be re-evaluated for derivative classification. The issuance of shares and related warrants upon exercise of the optional conversion feature will be accounted for upon exercise of the conversion option. As of June 30, 2025, $85,000 of 2025 Notes was converted into common stock and 2025 warrants, including a total of $40,000 of which was converted by Mr. Stuart and his affiliate. These shares and the shares underlying the warrants are subject to the resale restrictions under Rule 144 of the Securities Act and, therefore, the related warrants do not meet the definition of a derivative under ASC 815.

In April 2025, the president of the Company loaned the Company $30,900 pursuant to an unsecured promissory note due on April 11, 2026. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to four times.

In June 2025, the president of the Company loaned the Company $50,750 pursuant to an unsecured promissory note due on June 16, 2026. The note bears simple interest at a rate of 7% per annum. The maturity date of the note may be extended by an additional six months in the sole discretion of the Company up to four times.