v3.26.1
DEBT
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
DEBT

NOTE 10 — DEBT

 

Total debt of the Company was as follows as of December 31, 2025 and 2024:

        
   December 31, 
Debt Type  2025   2024 
Convertible notes payable (see Note 11)  $7,710,000   $5,100,000 
Convertible notes payable - fair value option (see Note 12)   270,000    320,000 
Non-convertible promissory notes (see Note 13)   5,080,000    3,880,000 
Non-convertible promissory note – Socialyte (see Note 13)   3,000,000    3,000,000 
Convertible notes from related party (see Note 14)   2,242,873    — 
Loans from related party (see Note 14)   983,112    3,225,985 
Revolving line of credit (see Note 11)   400,000    400,000 
First BKU Term Loan, (see Note 11)   3,481,182    4,565,048 
Second BKU Term Loan, (see Note 11)   1,381,026    2,000,000 
Debt issuance costs   (71,518)   (96,759)
Total debt obligation   24,476,675    22,394,274 
Less current portion of debt   (6,963,761)   (5,836,018)
Noncurrent portion of debt  $17,512,914   $16,558,256 

 

 

 

The table below details the maturity dates of the principal amounts for the Company’s debt as of December 31, 2025:

                           
Debt Type  Maturity Date  2026   2027   2028   2029   2030   Thereafter 
Convertible notes payable  Between October 2026 and September 2030  $1,250,000   $2,950,000   $400,000   $785,000   $2,825,000   $— 
Nonconvertible promissory notes  Ranging between June 2025 and August 2030   500,000    750,000    2,665,000    715,000    450,000    — 
Nonconvertible unsecured promissory note – Socialyte  September 2023 (A)   3,000,000(A)   —    —    —    —    — 
Revolving line of credit  July 11,2026 (mandatory 30-day annual clearing of the line of credit balance)   400,000    —    —    —    —    — 
BKU First Term Loan  September 2028   1,176,307    1,276,631    1,028,244    —    —    — 
Second BKU Term Loan  December 2027   665,501    715,525    —    —    —    — 
Convertible notes form related party  December 2027 through December 2029   —    1,107,873         1,135,000    —    — 
Loans from related party  January 2029 through December 2029   —    —    —    983,112    —    — 
      $6,991,808   $6,800,029   $4,093,244   $3,618,112   $3,275,000   $— 

 

  (A) As discussed in Note 13, The Socialyte Purchase Agreement allows the Company to offset a working capital deficit against the Socialyte Promissory Note. As such, the Company deferred these installment payments until the final post-closing working capital adjustment is agreed upon with the Socialyte Seller. The Company has filed a lawsuit against the Socialyte Seller and certain of its principals related to the Socialyte Purchase Agreement (Note 25).

 

BankUnited Term Loans

 

On September 29, 2023, the Company entered into a loan agreement with BankUnited (“BankUnited Loan Agreement”) in which an existing term loan with BankProv was repaid (the “Refinancing Transaction”). The BankUnited Loan Agreement includes: (i) $5,800,000 secured term loan (“First BKU Term Loan”), (ii) and $750,000 of a secured revolving line of credit (“BKU Line of Credit”) and (iii) $400,000 Commercial Card (“BKU Commercial Card”) (collectively, the “BankUnited Credit Facility”). The First BKU Term Loan carries a 1.0% origination fee and matures in September 2028, the BKU Line of Credit carries an initial origination fee of 0.5% and an 0.25% fee on each annual anniversary and matures in September 2026; the BKU Commercial Card does not have any initial or annual fee and matures in September 2026. The First BKU Term Loan has a declining prepayment penalty equal to 5% in year one, 4% in year two, 3% in year three, 2% in year four and 1% in year five of the outstanding balance. The BKU Line of Credit and BKU Commercial Card can be repaid without any prepayment penalty.

 

On December 6, 2024, the Company entered into a second loan agreement with Bank United (“Second BKU Term Loan”) for $2.0 million to finance the acquisition of Elle. The Second BKU Term Loan carries a 1.0% origination fee and matures in December 2027. Similar to the First BKU Term Loan, the Second BKU Term Loan has a declining prepayment penalty equal to 3% in year one, 2% in year two and 1% in year three of the outstanding balance. (The First BKU Term Loan, Second BKU Term Loan, BKU Line of Credit and BKU Commercial Card are collectively referred to as the “Bank United Credit Facility”).

 

Interest accrues at 8.10% fixed rate per annum on the First BKU Term Loan and 7.10% fixed rate per annum on the Second BKU Term Loan. Principal and interest are payable on a monthly basis based on a 5-year amortization for the First BKU Term Loan and 3-year amortization for the Second BKU Term Loan. Interest on the BKU Line of credit is payable on a monthly basis, with all principal due at maturity. The BKU Commercial Card payment is due in full at the end of each bi-weekly billing cycle. During the years ended December 31, 2025 and 2024, the Company did not use the BKU Commercial Card. During both of the years ended December 31, 2025 and 2024, the Company made payments in the amount of $1,418,482, inclusive of $334,616 and $421,009 of interest related to the First BKU Term Loan, respectively. During the year ended December 31, 2025, the Company made payments in amount of $743,981, inclusive of $125,007, of interest related to the Second BKU Term Loan. During the year ended December 31, 2024, there were no payments made in connection with the Second BKU Term Loan.

 

 Interest on the BKU Line of Credit is variable based on the Lender’s Prime Rate. During the year ended December 31, 2025 and 2024, the Company recorded interest expense and made payments of $27,500 and $31,722, respectively, related to the BKU Line of Credit.

 

As of December 31, 2025, the Company had a balance of $1,813,760 classified as current liabilities and $2,976,930 classified as noncurrent liabilities, net of $71,518 of debt issuance costs, in its consolidated balance sheet related to the First BKU Term Loan and the Second BKU Term Loan. As of December 31, 2024, the Company had a balance of $1,686,018 classified as current liabilities and $4,782,271 classified as noncurrent liabilities, net of $96,759 of debt issuance costs, in its consolidated balance sheet related to the First BKU Term Loan. As of December 31, 2025 and 2024, the Company had a balance of $400,000 of principal outstanding under the BKU Line of Credit.

 

Amortization of debt origination costs under the Bank United Credit Facility is included as a component of interest expense in the consolidated statements of operations and amounted to approximately $25,241 and $16,823 for the year ended December 31, 2025 and 2024, respectively.

 

The BankUnited Credit Facility contains financial covenants tested semi-annually, starting on June 30, 2024, on a trailing twelve-month basis that require the Company to maintain a minimum debt service coverage ratio of 1.25:1.00 and a maximum funded debt/EBITDA ratio of 3.00:1.00. In addition, the BankUnited Credit Facility contains a liquidity covenant that requires the Company to hold a cash balance at BankUnited with a daily minimum deposit balance of $2,000,000. As of December 31, 2025, the Company believes that it is in compliance with all of the debt covenants.