10. Debt

Set forth below is a summary of the Company’s outstanding debt obligations as of June 30, 2025 and December 31, 2024:

2024 Convertible notes

In October 2024, the Company entered into securities purchase agreements with two accredited investors, pursuant to which the Company agreed to sell up to an aggregate principal amount of $600,000 of secured convertible promissory notes (the “2024 Convertible Notes”) and 5-year warrants to purchase up to 32,174 shares of common stock at an exercise price of $9.20 per share, reflecting the impact of the Company’s 1-for-23 reverse stock split effected on June 12, 2025.

The 2024 Convertible Notes were issued with a 20% original issuance discount, resulting in gross proceeds of $500,000 to the Company. The notes bear no interest unless an event of default occurs, and matured on April 8, 2025. They are secured by a first priority lien on all assets of the Company.

On April 8, 2025, the Company transferred 50,000 shares of Class D common stock of its equity investment in Venu Holdings Corporation to the investors. The fair market value of $425,000 was applied as a partial repayment against the outstanding principal balance of the notes.

As of June 30, 2025, the notes are in default and bear interest at a rate of 10% per annum, applied retroactively to the original issue date. Each 2024 Convertible Note is convertible at the option of the holder into shares of common stock at a conversion price of $9.20 per share, adjusted from the original $0.40 per share to reflect the reverse stock split. 

The Company reviewed the warrants in connection with the securities purchase agreements under ASC 815 and concluded that the warrants are not in scope of ASC 480 and are not subject to the derivative guidance under ASC 815. Accordingly, the warrants were equity classified. As such the principal value of the 2024 Convertible Notes was allocated using the relative fair value basis of all instruments. As the warrants were issued with another instrument the purchase price was allocated using the relative fair value method (i.e., warrants at its fair value and the 2024 Convertible Notes at its principal value allocated using the relative fair value of the proceeds received and applied proportionally to the equity classified warrants and 2024 Convertible Notes).

2025 Convertible notes

In May 2025, the Company entered into four convertible promissory notes (the “Bridge Notes”) with unaffiliated accredited investors, pursuant to which the Company received an aggregate of $200,000 in gross proceeds. Each note was issued with a 20% original issue discount, resulting in a face value of $60,000 per note and a purchase price of $50,000 per note. The notes mature three months from issuance, with maturity dates of August 2, 2025 and August 23, 2025, respectively.

In June 2025, the Company entered into a convertible promissory note (the “Bridge Notes”) with unaffiliated accredited investors, pursuant to which the Company received an aggregate of $25,000 in gross proceeds. The note was issued with a 20% original issue discount, resulting in a face value of $30,000 and a purchase price of $25,000. The notes mature three months from issuance, with a maturity of September 10, 2025.

The Bridge Notes are convertible at the option of the holders into shares of the Company’s common stock at a fixed conversion price of $11.50 per share, subject to adjustment for dilutive issuances and recapitalizations. Conversion is permitted following the later of (i) 90 days from issuance and (ii) the date on which the Company receives requisite shareholder and NYSE American approval for the issuance of conversion shares.

Each note includes a default interest of 12%, which is deferred and applied retroactively if the notes are not repaid by maturity.

In connection with each note, the Company also issued five-year warrants to purchase shares of common stock at an exercise price of $11.50 per share, exercisable for cash only and callable if the stock trades at $34.50 for 20 consecutive trading days.

2023 Bridge Notes

These notes were assumed in the Acquisition, see Note 2. As of June 30, 2025, the principal balance of this debt was approximately $853,000 which includes a 200% return on the principal sum. These 2023 Bridge Notes carry an interest rate of 10% and are due on demand after March 8, 2026. The 2023 Bridge Notes may be prepaid without penalty. The accrued interest balance as of June 30, 2025 is approximately $147,000.

Blue Hawk, LLC notes payable

These notes were assumed in the Acquisition, see Note 2. As of June 30, 2025, the principal balance of this debt is $950,000 and carries an interest rate of $8%. These notes are currently due on demand and a demand has been received by the Company on July 25, 2025.

2025 Notes Payable

In May and June 2025, the Company entered into multiple secured and subordinated promissory notes with unaffiliated accredited investors, resulting in aggregate gross proceeds of $1,250,000 and total principal obligations of $1,487,000, reflecting original issue discounts ranging from 13.04% to 20%.

Key terms of the notes are summarized as follows:

All notes are secured by the assets of the Company and are subordinated to existing senior secured indebtedness. The notes are non-convertible, carry no prepayment penalties, and include customary events of default provisions, including non-payment, bankruptcy, and breach of covenants. Upon default, interest rates may increase retroactively to 18% per annum.

2025 OID Notes

In February 2025, the Company entered into a securities purchase agreement with three accredited investors, pursuant to which the Company agreed to sell up to an aggregate principal amount of $3,300,000 of Secured Original Issue Discount Promissory Notes (the “2025 OID Notes”) with original issuance discount of 10%. At the initial closing, the Company sold $1,650,000 aggregate principal amount of 2025 OID Notes, resulting in gross proceeds of $1,500,000. In April 2025, the Company sold $1,100,000 aggregate principal amount of 2025 OID Notes, resulting in gross proceeds of $1,000,000. The 2025 OID Notes bear no interest unless an event of default occurs, and mature on November 6, 2025. In April 2025. The 2025 OID Notes are secured by certain accounts of the Company pursuant to a pledge agreement that was entered into in connection with the issuance of the 2025 OID.

As part of the Acquisition of Amaze Software, the Company assumed the following debt:

Amaze Holdings, Inc Forgiven Note Payable

The Company assumed a $4,400,000 note payable and accrued interest in the Acquisition. This note was payable to Amaze Holdings, Inc. Immediately following the consummation of the business combination between Amaze Holdings, Inc. and Amaze Software, Inc., the consolidated Company offset the note payable assumed from Amaze Software with the note receivable held by Amaze Holdings, Inc.

ACH Capital West, LLC financing arrangement

As of June 30, 2025, the principal balance of this debt was $517,021. The note is due September 2025. The loan has an interest rate of 77.64% and is paid in weekly installments ranging from $25,000 to $29,536 that began in March 2025.

Principal maturities of the Company’s debt obligations are as follows: