Note 5 – Debt

The following represents a summary of the Company’s debt (notes payable – related parties and third party debt for notes payable) including those owed on vehicles, including key terms, and outstanding balances at June 30, 2025 and December 31, 2024, respectively.

Notes Payable – Related Parties

The following is a summary of the Company’s notes payable – related parties at June 30, 2025 and December 31, 2024:

Summary of Notes Payable

The following is a detail of the Company’s advances payable – related parties terms and history of each advance at June 30, 2025 and December 31, 2024:

Schedule of Advances Payable Related Parties

Notes Payable

The following represents the terms of the Company’s notes payable as of June 30, 2025 and December 31, 2024, respectively:

Schedule of Terms of Notes Payable

 Schedule of Notes Payable

Loans #1, #2, #6-#18, #20, and #30-31 represent merchant cash advance (“MCA”) agreements entered into by the Company. Under these arrangements, the Company receives a specified gross advance amount, net of origination fees, discounts, and other transaction costs, in exchange for a fixed repayment obligation that typically exceeds the net funds received.

Repayment terms generally range from 21 to 78 weeks and are structured as daily or weekly fixed remittances. The Company accounts for these arrangements as debt in accordance with ASC 470, recognizing the full repayment obligation as a liability, with related issuance costs amortized over the term of the loan.

To manage liquidity and meet near-term obligations, the Company has, in several instances, refinanced existing MCA loans by entering into new MCA agreements with the same or alternative lenders. These refinancing arrangements often involve:

While refinancing may provide short-term liquidity relief, it often results in higher cumulative borrowing costs due to upfront fees and the compounding effect of new obligations. These refinancings are typically executed close to the maturity of the original MCA or earlier if cash flow pressures arise.

The Company utilizes MCA financing primarily to support working capital and general operations. Given the short-term nature, fee structure, and recurring refinancing activity, these MCA obligations are classified as short-term debt. The Company continuously evaluates its funding options to manage cash flow and covenant compliance under these agreements.

Loans #3 and #4

In November 2024, the Company executed an asset purchase agreement with Yoshi, Inc. In connection with this transaction, in February 2025, the Company acquired various vehicles as part of a growth and expansion plan. The Company has access to and utilizes these vehicles for mobile fueling as part of its ongoing operations. Since the transaction did not close until February 2025, the payments made/due as of December 31, 2024, have been classified as a component of deposit on future asset purchase totaling $2,035,283. In 2025, $1,229,000 of this amount was reclassified to vehicles, and the remaining value was expensed.

As part of the consideration due to the seller, the Company was required to pay $1,250,000, plus an additional $250,000, between six and nine months from the transaction date.

As of December 31, 2024, the Company had paid $650,000, however an additional $850,000 remained due and outstanding as a condition for closing the asset purchase.

In February 2025, an additional $650,000 was paid. At the date of these unaudited consolidated financial statements, and pursuant to the repayment terms, the balance of $200,000 remains and is due by August 2025.

Loan #5

In December 2024, the Company executed a two-month loan for $2,500,000. The Company was required to pay transaction fees of $440,000. The Company received the entire $2,500,000 as proceeds, rather than the transaction fees being netted from the closing. These fees totaling $440,000 were recorded both as an original discount and accrued expenses. In the event of default, the note would accrue interest at 21%. In February 2025, the Company obtained an additional 30-day extension, with a new maturity date occurring in March 2025, in exchange for $200,000. The loan was repaid in March 2025.

Loan #21

During the years ended December 31, 2023 and 2024, the Company entered into and amended three unsecured promissory notes totaling $2,420,000 (see below for Notes #1, #2 and #3) with a former related party at the time of the transaction. These notes were initially issued with original issue discounts and additional common stock issuances classified as debt discounts totaling $1,361,400. Of the total debt discounts recognized, $1,192,637 was amortized to interest expense in 2023, the remaining balance of $168,763 was amortized to interest expense in 2024.

Initial Issuance Terms

Global Amendment and Default Conversion Features

On January 17, 2024, the Company and the lender executed a global amendment to the terms of Notes #1, #2, and #3:

Extension-Related Stock Issuances

Conversion to Series A Convertible Preferred Stock

On August 16, 2024, the Company and the lender agreed to convert all remaining obligations under Notes #1, #2, and #3 into equity. The total principal converted was $2,420,000. The lender exercised a 150% penalty interest feature, increasing the total debt conversion amount to $3,630,000. As a result, the Company issued 363,000 shares of Series A convertible preferred stock with a stated value of $10 per share. The fair value of the preferred stock was determined based on its as-converted value into common stock as follows:

Schedule of Debt Extinguishment

The Company accounted for the conversion as an extinguishment of debt under ASC 470-50, and the difference between the fair value of the equity issued and the carrying amount of the debt was recorded as a loss on debt extinguishment.

Common Stock Issuable – 242,000 Shares

In connection with the initial debt issuances and amendments discussed above, the Company had previously classified 242,000 common shares as common stock issuable due to the 9.99% ownership blocker. Upon conversion of all outstanding debt on August 16, 2024, these shares were formally issued to the lender. Since the shares had already been reflected in equity, there was no incremental impact to stockholders’ deficit upon issuance.

Loans #22-#26

In October 2024, the Company entered into five unsecured, non-interest-bearing notes with an aggregate principal amount of $5,000,000 and a contractual term of 18 months. The notes were issued with an OID of $100,000, resulting in net cash proceeds of $4,900,000 at inception.

Although the notes had a stated maturity in 2026, the Company repaid the full $5,000,000 principal amount in February 2025, prior to maturity. The remaining unamortized debt discount of $83,547 was amortized on an accelerated basis as interest expense through the repayment date.

Loan #27

In January 2024, the Company acquired 100% of the equity interests in STAT in exchange for $5,500,000. STAT has patented technology that will be used in the Company’s expected future operations. Prior to the acquisition, the operations of STAT were insignificant.

In 2023, the Company paid a deposit of $250,000 towards this acquisition. In 2024, the Company paid an additional $1,550,000 for total cash consideration paid of $1,800,000 at closing. The balance of $3,700,000 was financed through a note payable. This note bears interest at 7%, is unsecured was due in May 2024 (“initial maturity date”). The Company also has the option to extend the due date to July 2024 for no additional consideration or change in terms (See Note 10). Subsequent to the initial maturity date, the lender has agreed to extend the due date of the note multiple times, for payments of $130,000, respectively. Each of these payments was recorded as interest expense.

In October 2024, without any additional extension payments required, the Company repaid the note plus accrued interest totaling $3,826,112. An additional $59,800 of accrued interest was forgiven by the lender and recorded as other income in the accompanying consolidated statements of operations during the year ended December 31, 2024.

Loan #28

In December 2024, the Company executed a loan for $5,000,100 with Cohen Global Energy, LLC. Cohen Global Energy is an unrelated third party that holds 50% of Next/Ingle Holdings, LLC. The Company owns the other 50% of Next/Ingle Holdings, LLC. Notwithstanding the split of ownership, the Company retains unilateral governing control over the entity, as outlined in the executed operating agreement. Next/Ingle Holdings LLC is a controlled holding company which has been consolidated into the Company, and shows a non-controlling interest for the 50% not owned. The loan was due March 31, 2025. The Company is currently negotiating an extension of the due date.

Notes Payable – Vehicles (Loan # 29)

The following is a summary of the Company’s notes payable for its vehicles at June 30, 2025 and December 31, 2024, respectively:

Summary of Notes Payable - Vehicles

The following is a detail of the Company’s notes payable for its vehicles at June 30, 2025 and December 31, 2024, respectively:

Schedule of Detailed Company’s Notes Payable

Debt Maturities

The following represents future maturities of the Company’s various debt arrangements as follows:

Schedule of Maturities of Long Term Debt