NOTE 9 – PIPE CONVERTIBLE NOTES

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, the Company entered into a securities purchase agreement with accredited investors for the issuance of PIPE Convertible Notes and Warrants.

During the three months ended June 30, 2025, the Company converted an aggregate principal amount of $1,558,000 and $1,082,194 in accrued and make-whole interest related to the PIPE Convertible Notes into 142,308 shares of the Company’s Class A common stock.

PIPE Convertible Notes payable consisted of the following:

 SCHEDULE OF PIPE CONVERTIBLE NOTES PAYABLE

During the three and six months ended June 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes was $127,097 and $20,872 and $359,037 and $24,197, respectively. The principal balance of the PIPE Convertible Notes, net of Debt Discounts, and accrued interest related to the PIPE Convertible Notes at June 30, 2025, was $3,734,990 and $40,957, respectively. The principal balance net of Debt Discounts and accrued interest related to the PIPE Convertible Notes at December 31, 2024, was $4,068,953 and $154,500, respectively.

PIPE Exchange Agreements

On April 22, 2025, the Company entered into Exchange Agreements, (the “Exchange Agreements” and each, an “Exchange Agreement”), by and among the Company and each of the PIPE Convertible Note holders (the “Holders”)., pursuant to which each such Holder would exchange (i) the amounts remaining outstanding under the PIPE Convertible Notes and certain other amounts outstanding with respect thereto in the aggregate amount (the “Note Exchange”), and (ii) the PIPE Warrants. Pursuant to the Exchange Agreements, on the effective date of the Exchange Agreements, which was April 22, 2025, the PIPE Warrants were exchanged, in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), into an aggregate of 1,885 shares of the Company’s newly created Series A preferred stock (the “Series A Preferred Stock”, and (ii) warrants to purchase up to 37,033 shares of Series A Preferred Stock (the “Series A Preferred Warrants”).

Pursuant to the Exchange Agreements, on the closing of the Note Exchange the amounts owing under the PIPE Convertible Notes were to be exchanged into share of the Company’s Series A Preferred Stock. From the date of the Exchange Agreements until the date of the Note Exchange, the conversion price of the PIPE Convertible Notes was reduced to $1.00 per share, which was then adjusted to $50.00 per share as a result of the Reverse Stock Split.

Due to the bundled nature of the Exchange Agreements transaction and that the PIPE Convertible Notes had not been exchanged as of June 30, 2025, the PIPE Convertible Notes remain outstanding and are classified as liabilities on the Company’s unaudited condensed consolidated balance sheet as of that date. The exchange of the PIPE Convertible Notes did not occur until July 21, 2025, and the associated issued Series A Preferred Stock and Series A Preferred Warrants are presented within equity as non-cash issuances, pending full settlement. See Note 13 – Stockholders’ Equity for the impact on the Company’s equity instruments.