NOTE 8 – ADVANCES AND NON-CONVERTIBLE NOTES PAYABLE

Factoring Advances

On February 1, 2024, the Company entered into a revenue factoring advance in the principal amount of $1,340,000 for a purchase price of $970,000. There was an origination fee of $30,000. There were cash proceeds of $970,000 during the year ended December 31, 2024. The Company’s Chief Executive Officer was personally liable for this factoring advance. The Company was required to make weekly payments in the amount $25,800 through January 2025. The advance matured on January 23, 2025. There was amortization of debt discount of $370,000 during the year ended December 31, 2024. The Company made cash repayments of $606,400 during the year ended December 31, 2024. The Company realized a $733,600 gain on settlement during the year ended December 31, 2024. As of December 31, 2024, the revenue factoring advance had a balance of $0, net an unamortized debt discount of $0. The advance is retired.

On February 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $822,000 for a purchase price of $572,950. There was an origination fee of $27,050. There were cash proceeds of $572,950 during the year ended December 31, 2024. The Company’s Chief Executive Officer was personally liable for this factoring advance. The Company was required to make weekly payments in the amount $30,444 through August 2024. The advance matured on August 31, 2024. There was amortization of debt discount of $249,050 during the year ended December 31, 2024. The Company made cash repayments of $668,556 during the year ended December 31, 2024. There was a gain on settlement $153,444 during the year ended December 31, 2024. As of December 31, 2024, the revenue factoring advance had a balance of $0, net an unamortized debt discount of $0. The advance is retired.

On February 29, 2024, the Company entered into a revenue factoring advance in the principal amount of $559,600 for a purchase price of $376,000. There was an origination fee of $24,000. There were cash proceeds of $376,000 during the year ended December 31, 2024. The Company’s Chief Executive Officer was personally liable for this factoring advance. The Company was required to make weekly payments in the amount $25,436 through July 2024. The advance matured on July 15, 2024. There was amortization of debt discount of $183,600 during the year ended December 31, 2024. The Company made cash repayments of $544,745 during the year ended December 31, 2024. There was a gain on settlement $14,855 during the year ended December 31, 2024. As of December 31, 2024, the revenue factoring advance had a balance of $0, net an unamortized debt discount of $0. The advance is retired.

On March 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $1,499,000 for a purchase price of $700,000. There was an origination fee of $300,000. There were cash proceeds of $700,000 during the year ended December 31, 2024. The Company’s Chief Executive Officer was personally liable for this factoring advance. The Company was required to make weekly payments in the amount $125,000 through June 2024. The advance matured on June 6, 2024. There was amortization of debt discount of $799,000 during the year ended December 31, 2024. The Company made cash repayments of $1,375,000 during the year ended December 31, 2024. There was a gain on settlement $124,000 during the year ended December 31, 2024. As of December 31, 2024, the revenue factoring advance had a balance of $0, net an unamortized debt discount of $0. The advance is retired.

On March 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $374,750 for a purchase price of $225,000. There was an origination fee of $25,000. There were cash proceeds of $225,000 during the year ended December 31, 2024. The Company’s Chief Executive Officer was personally liable for this factoring advance. The Company was required to make weekly payments in the amount $23,422 through July 2024. The advance matured on July 7, 2024. There was amortization of debt discount of $149,750 during the year ended December 31, 2024. The Company made cash repayments of $343,688 during the year ended December 31, 2024. There was a gain on settlement $31,062 during the year ended December 31, 2024. As of December 31, 2024, the revenue factoring advance had a balance of $0, net an unamortized debt discount of $0. The advance is retired.

The remaining advances were for Simple Agreements for Future Tokens, entered into with accredited investors issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof and/or Regulation D thereunder in 2018. As of March 31, 2025 and December 31, 2024, the Company owed $85,000 and $85,000 for Simple Agreements for Future Tokens, respectively.

Non-Convertible Notes Payable

On April 11, 2022, the Company entered into a vehicle financing agreement with GM Financial for the purchase of a vehicle for use by the Company’s Chief Executive Officer in the principal amount of $74,186. GM Financial financed $65,000 of the purchase price of the vehicle and the Company was required to make a $10,000 down payment. There was a $2,400 rebate applied to the purchase price. The Company is required to make 60 monthly payments of $1,236. During the six months ended June 30, 2025 and 2024, the Company made $9,280 and $14,197 in payments towards the financing agreement, respectively. There was amortization of debt discount of $4,215 and $894 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the financing agreement had a balance of $0 and $4,975, net an unamortized debt discount of $0 and $4,306, respectively.

On April 21, 2022, the Company entered into a secured promissory note in the principal amount of $964,470 for the financing and installation of a piece of equipment in the amount $750,000. The Company is required to make monthly payments in the amount $6,665 through October 2022 and monthly payments of $19,260 until October 2026. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on October 21, 2026. During the six months ended June 30, 2025 and 2024, the Company made $115,481 and $124,767 in payments towards the note, respectively. There was amortization of debt discount of $667 and $19,016 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $231,658 and $310,476 net an unamortized debt discount of $13,145 and $49,802, respectively.

On September 1, 2022, the Company entered into a Deed of Trust note for the purchase of land and buildings. The note has a principal amount of $600,000, bears an interest rate of 6.5%, and matures on September 1, 2032. The Company is required to make monthly payments of $4,476 until September 1, 2032, when the remaining principal and accrued interest becomes due. The Company made principal payments of $8,668 and $8,906 during the six months ended June 30, 2025 and 2024, respectively. The Company made interest payments of $18,186 and $8,865 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a principal balance of $552,658 and $561,324, respectively.

On September 1, 2022, the Company entered into a Deed of Trust note for the purchase of land and buildings. The note has a principal amount of $600,000, bears an interest rate of 6.5%, and matures on September 1, 2032. The Company is required to make monthly payments of $4,476 until September 1, 2032, when the remaining principal and accrued interest becomes due. The Company made principal payments of $8,668 and $8,906 during the six months ended June 30, 2025 and 2024, respectively. The Company made interest payments of $18,186 and $8,865 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a principal balance of $552,658 and $561,324, respectively.

On September 14, 2022, the Company entered into a secured promissory note in the principal amount of $2,980,692 for a purchase price of $2,505,000. The note is secured by certain assets of the Company. The Company is required to make monthly payments in the amount $82,797 through September 2025. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on September 14, 2025. There was amortization of debt discount of $(23,289) and $50,097 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $469,688 and $536,788 towards the note during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $197,435 and $575,616 net an unamortized debt discount of $(23,289) and $59,478, respectively.

On November 28, 2022, the Company entered into a secured promissory note in the principal amount of $1,539,630 for a purchase price of $1,078,502. The note is secured by certain assets of the Company. A non-cash adjustment of $439,500 was recorded on disposal of assets. The Company is required to make monthly payments in the amount of $10,410 through March 2023 and then monthly payments in the amount of $20,950 through March 2029. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on March 5, 2029. There was amortization of debt discount of $210,695 and $52,790 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $87,047 and $135,914 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024 the note had a balance of $0 and $680,674 net an unamortized debt discount of $0 and $247,897, respectively. During the six months ended June 30, 2025, an additional non-cash adjustment for $209,443 was recorded on disposal of assets and $192,583 gain on settlement was recorded for early payoff of this note.

On November 28, 2022, the Company entered into a secured promissory note in the principal amount of $1,560,090 for a purchase price of $1,092,910. $586,000 of this balance was settled against the disposal of property and equipment. The note is secured by certain assets of the Company. The Company is required to make monthly payments in the amount of $10,630 through March 2023 and then monthly payments in the amount of $21,225 through March 2029. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on March 5, 2029. There was amortization of debt discount of $254,642 and $78,857 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $79,696 and $137,698 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024 the note had a balance of $0 and $689,613 net an unamortized debt discount of $0 and $249,740, respectively. During the six months ended June 30, 2025, an additional non-cash adjustment for $78,313 was recorded on disposal of assets and a $195,347 gain on settlement was recorded for early payoff on this note.

On November 28, 2022, the Company entered into a secured promissory note in the principal amount of $1,597,860 for a purchase price of $1,119,334. The note is secured by certain assets of the Company. A non-cash adjustment of $439,500 was recorded on disposal of assets. The Company is required to make monthly payments in the amount of $10,860 through March 2023 and then monthly payments in the amount of $21,740 through March 2029. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on March 5, 2029. There was amortization of debt discount of $216,411 and $35,040 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $82,870 and $141,239 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $0 and $706,341 net an unamortized debt discount of $0 and $255,835, respectively. During the six months ended June 30, 2025, an additional non-cash adjustment for $233,107 was recorded on disposal of assets and a $206,700 gain on settlement was recorded for early payoff on this note.

On December 15, 2022, the Company entered into a secured promissory note in the principal amount of $1,557,435 for a purchase price of $1,093,380. The note is secured by certain assets of the Company. A non-cash adjustment of $439,000 was recorded on disposal of assets. The Company is required to make monthly payments in the amount of $10,585 through March 2023 and then monthly payments in the amount of $21,190 through March 2029. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on March 15, 2029. There was amortization of debt discount of $250,139 and $(36,604) during the six months ended June 30, 2025 and 2024, respectively. There were payments of $51,787 and $137,365 during the six months ended June 30, 2025, and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $0 and $687,948 net an unamortized debt discount of $0 and $250,101, respectively. During the six months ended June 30, 2025, an additional non-cash adjustment for $218,535 was recorded on disposal of assets and a $228,728 gain on settlement was recorded for early payoff on this note.

On January 10, 2023, the Company entered into a secured promissory note in the principal amount of $1,245,018 for a purchase price of $1,021,500. The note is secured by certain assets of the Company. There were cash proceeds of $1,000,000. The Company is required to make monthly payments in the amount of $10,365 through March 2023 and then monthly payments in the amount of $34,008 through March 2026. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on March 10, 2026. There was amortization of debt discount of $32,186 and $32,522 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $165,863 and $220,583 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $235,992 and $381,903 net an unamortized debt discount of $58,468 and $78,419, respectively.

On January 12, 2023, the Company entered into a secured promissory note in the principal amount of $1,185,810 for a purchase price of $832,605. The note is secured by certain assets of the Company. There were non-cash proceeds of $832,605 used to purchase equipment, as well as a non-cash adjustment of $289,033 on disposal of assets. The Company is required to make monthly payments in the amount of $8,030 through April 2023 and then monthly payments in the amount of $16,135 through April 2028. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on April 12, 2028. There was amortization of debt discount of $216,437 and $52,821 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $43,355 and $91,544 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $0 and $531,871 net an unamortized debt discount of $0 and $185,515, respectively. During the six months ended June 30, 2025, an additional non-cash adjustment for $219,069 was recorded on disposal of assets and a $190,438 gain on settlement was recorded for early payoff on this note.

On February 23, 2023, the Company entered into a secured promissory note in the principal amount of $822,040 for a purchase price of $628,353. The note is secured by certain assets of the Company. There were non-cash proceeds of $628,253 used to purchase equipment. The Company is required to make monthly payments in the amount of $6,370 through June 2023 and then monthly payments in the amount of $16,595 through June 2027. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on June 23, 2027. There was amortization of debt discount of $(20,624) and $1,545 during six months ended June 30, 2025 and 2024, respectively. There were payments of $106,023 and $155,218 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $285,052 and $346,227 net an unamortized debt discount of $(98,911) and $54,034, respectively.

On February 24, 2023, the Company entered into a secured promissory note in the principal amount of $1,186,580 for a purchase price of $832,605. The note is secured by certain assets of the Company. There were non-cash proceeds of $832,605 used to purchase equipment. The Company is required to make monthly payments in the amount of $9,185 through June 2023 and then monthly payments in the amount of $23,955 through June 2027. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on June 24, 2027. There were additional fees incurred of $8,733 and $21,380 during the years ended December 31, 2024 and 2023, respectively. There was amortization of debt discount of $35,958 and $71,713 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $138,199 and $107,536 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $411,447 and $494,748 net an unamortized debt discount of $237,380 and $292,226, respectively.

On April 12, 2023, the Company entered into a secured promissory note in the principal amount of $317,415 for a purchase price of $219,676. The note is secured by certain assets of the Company. There were non-cash proceeds of $219,676 used to purchase equipment. The Company is required to make monthly payments in the amount of $2,245 through August 2023 and then monthly payments in the amount of $4,315 through July 2027. The note bears an interest rate of 10.6%, is secured by certain assets of the Company, and matures on July 12, 2029. There were payments of $61,249 and $3,466 during the six months ended June 30, 2025 and 2024, respectively and $150,466 and $0 of this balance, respectively, was settled against the disposal of property and equipment. There was amortization of debt discount of $(58,547) and $3,137 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $0 and $145,554 net an unamortized debt discount of $0 and $66,158, respectively.

On July 31, 2023, the Company entered into a secured promissory note with an entity controlled by the Company’s Chief Executive Officer in the principal amount of $17,218,350. The note was for the purchase of certain equipment from an entity controlled by the Company’s Chief Executive Officer and is secured by such equipment. There were non-cash proceeds of $17,218,350 used to purchase equipment. The note is junior to the senior secured debt entered into by the Company on the same date. The note matures on July 31, 2043 and accrues interest at 7% per annum. The note requires interest-only payments until the senior secured debt is fully satisfied. The Company made payments of $0 and $498,625 towards the principal and interest, respectively, during the years ended December 31, 2024 and 2023, respectively. On March 29, 2024, the holder of the note exchanged $10,000,000 in principal for 1,000 shares of Series D Preferred Stock (see Note 14 – Stockholders’ Equity). On April 21, 2024, the holder of the note exchanged $7,218,350 in principal for 412,360 shares of common stock (see Note 14 – Stockholders’ Equity). As of December 31, 2024 and 2023, the note had a balance of $0 and $17,218,350, respectively.

On December 2, 2024, the Company entered into a secured promissory note with an entity controlled by the Company’s Chief Executive Officer in the principal amount of $11,699,916. The note was for the purchase of certain land and permits from an entity controlled by the Company’s Chief Executive Officer and is secured by such property. There were non-cash proceeds of $11,699,916 used to purchase the land and equipment. The note matures on March 31, 2025 and accrues interest at 10% per annum. The note requires monthly payments of $2,983,309, however in the event such payment would result in the Company having less than $3 million cash on hand, such payment is delayed without penalty until the following month and the maturity date of the note extended. There was amortization of debt discount of $0 during the six months ended June 30, 2025 and 2024. The Company made payments of $2,300,000 towards the principal of the note during the six months ended June 30, 2025. As of June 30, 2025 and December 31, 2024, the note had a principal balance and accrued interest of $5,391,859 and $7,691,859, respectively.

On February 3, 2025, the Company entered into a secured promissory note in the principal amount of $1,373,040 for a purchase price of $1,026,844. The note is secured by certain assets of the Company. The Company is required to make monthly payments in the amount of $19,070. The note matures on February 3, 2031. There was amortization of debt discount of $13,930 and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $77,250 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $965,973 and $0 net of an unamortized debt discount of $329,788 and $0, respectively.

On February 3, 2025, the Company entered into a secured promissory note in the principal amount of $1,000,107 for a purchase price of $769,383. The note is secured by certain assets of the Company. There were non-cash proceeds of $29,853 used to purchase equipment. The Company is required to make monthly payments in the amount of $14,305. The note matures on February 3, 2031. There was amortization of debt discount of $(19,322) and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $57,220 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $724,711 and $0 net of an unamortized debt discount of $218,176 and $0, respectively.

On February 3, 2025, the Company entered into a secured promissory note in the principal amount of $1,517,127 for a purchase price of $1,167,350. The note is secured by certain assets of the Company. There were non-cash proceeds of $45,273 used to purchase equipment. The Company is required to make monthly payments in the amount of $21,700. The note matures on February 3, 2031. There was amortization of debt discount of $(14,584) and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $87,800 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $1,099,094 and $0 net of an unamortized debt discount of $330,234 and $0, respectively.

On February 3, 2025, the Company entered into a secured promissory note in the principal amount of $1,213,693 for a purchase price of $898,653. The note is secured by certain assets of the Company. There were non-cash proceeds of $36,227 used to purchase equipment. The Company is required to make monthly payments in the amount of $17,360. The note matures on February 3, 2031. There was amortization of debt discount of $(13,164) and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $69,440 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $879,457 and $0 net of an unamortized debt discount of $264,796 and $0, respectively.

On May 28, 2025, the Company entered into a secured promissory note in the principal amount of $1,658,880 for a purchase price of $1,240,690. The note is secured by certain assets of the Company. The Company is required to make monthly payments in the amount of $23,040. The note matures on May 28, 2031. There was amortization of debt discount of $(22,840) and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $0 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $1,217,850 and $0 net of an unamortized debt discount of $441,030 and $0, respectively.

On May 28, 2025, the Company entered into a secured promissory note in the principal amount of $1,327,680 for a purchase price of $992,852. The note is secured by certain assets of the Company. The Company is required to make monthly payments in the amount of $7,383. The note matures on May 28, 2031. There was amortization of debt discount of $(19,028) and $0 during the six months ended June 30, 2025 and 2024, respectively. There were payments of $0 and $0 during the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the note had a balance of $973,824 and $0 net of an unamortized debt discount of $353,856 and $0, respectively.

The following table details the current and long-term principal due under non-convertible notes as of June 30, 2025.

SCHEDULE OF CURRENT AND LONG TERM PRINCIPAL DUE UNDER NONCONVERTIBLE NOTE

Total principal payments due on non-convertible notes for 2025 through 2028 and thereafter is as follows: 

SCHEDULE OF PRINCIPAL PAYMENTS DUE ON NON-CONVERTIBLE NOTES