Note 12 – Debt

Kaufman Convertible Notes Payable, Related Party

On July 15, 2024, the Company entered into a Securities Purchase Agreement (as amended, the “SPA”) with Daniel L. Kaufman, pursuant to which Mr. Kaufman agreed to purchase from the Company, in a private placement (i) a 12% Senior Secured Convertible Promissory Note in the principal amount of up to $3,400,000 (the “Convertible Note”), convertible into shares of the Company’s common stock at a fixed price of $0.7582 per share of common stock, a (ii) a warrant to purchase 1,000,000 shares of common stock at an exercise price of $1.00 per share (the “$1.00 Warrant”), and (iii) a warrant to purchase 500,000 shares of common stock at an exercise price of $1.50 per share (the “$1.50 Warrant” and, together with the $1.00 Warrant, the “Warrants” and together with the Convertible Note, the “Purchased Securities”), in consideration of an initial loan in the principal amount of $2,000,000 (the “Initial Loan”) made to the Company under the Convertible Note, subject to the terms and conditions thereof.

On July 19, 2024, the Company, Mr. Kaufman and Kaufman Kapital LLC (“Kaufman Kapital”) entered into an amendment to the SPA, which among other things, replaced Mr. Kaufman with Kaufman Kapital as the “Investor” under the SPA.

The Convertible Note matures on the earlier of (i) December 31, 2025, (ii) the sale by the Company of $5,000,000 of equity or debt securities in a single transaction or series of related transactions (excluding certain specified transactions), or (iii) the closing of a change of control transaction as provided in the Convertible Note. Loans outstanding under the Convertible Note bear interest at an initial rate of 12% per annum, and together with accrued principal are convertible into common stock.

On July 24, 2024 the, the Initial Loan payment of $2,000,000 was made to the Company under the Convertible Note, and on December 9, 2024, Kaufman Kapital made an additional loan to the Company under the Convertible Note in the amount of $1,400,000.

On June 1, 2025 the Company and Kaufman Kapital entered into a Warrant Exercise and Amendment to Notes and Warrant Agreement (the “Warrant Exercise Agreement”), pursuant to which Kaufman Kapital exercised in full the $1.00 Warrant on June 4, 2025 for a cash payment to the Company of $1,000,000. In addition, pursuant to the Warrant Exercise Agreement, Kaufman Kapital and the Company agreed (i) to extend the expiration date of the $1.50 Warrant to December 31, 2026, (ii) to extend the maturity date of the Convertible Note to December 31, 2026, (iii) to extend the maturity date of the Senior Secured Promissory Note of the Company in the original principal amount of $1,200,000, issued to Kaufman on August 29, 2024 (the “Secured Note”) to December 31, 2025, (iv) that the Company will not make any prepayment under the Convertible Note at any time amounts are outstanding under the Secured Note or any other non-convertible notes of the Company (excluding notes issued pursuant to equipment financing), and (v) that the Company will not prepay more than $2,400,000 of principal outstanding under the Convertible Note prior to September 30, 2026. The amendment to the $1.50 Warrant resulted in $32,099 of additional interest expense during 2025.

Subsequent to December 31, 2025, on January 28, 2026, Kaufman converted $500,000 of principal outstanding under the Company’s Convertible Note into 659,457 shares of the Company’s common stock. See Note 21 – Subsequent Events.

The Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s assets pursuant to a Security Agreement entered between the Company and Kaufman Kapital (the “Security Agreement”). In addition, the Convertible Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions of this nature.

In accordance with ASC 470, the Company recorded total discounts of $95,958, consisting of $75,000 of legal fees and $20,958 related to the relative fair value of the Warrants. The discounts are amortized to interest expense over the term of the loan using the effective interest method. As of December 31, 2025, a total of $39,309 of unamortized debt discounts are expected to be expensed over the remaining life of the loan.

Kaufman Senior Secured Promissory Note, Related Party

On August 29, 2024, the Company borrowed $1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note that, as amended, matures on December 31, 2025. The loan under the Secured Note bears interest at a rate of 15% per annum. The Company’s obligations under the Secured Note are secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement. In addition, the Secured Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions of this nature.

During the year ended December 31, 2025, the Company repaid $1,200,000 of principal on the Secured Note. The principal outstanding under the Secured Note is $0 as of December 31, 2025.

Subsequent to December 31, 2025, on January 28, 2026, the Company entered into a $1,500,000 Senior Secured Promissory Note with Kaufman Kapital. The note bears interest at 8% per annum and matures on January 28, 2027. See Note 21 – Subsequent Events.

Eagle Vision Senior Notes and Warrants, Related Party

On January 9, 2024 the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Eagle Vision Fund LP., for the sale of Senior Secured Notes bearing interest at a rate of 15% per annum (“Senior Secured Notes”) to Purchasers in the aggregate amount of up to $400,000 and detachable 10-year warrants (the “Warrants”) to purchase in the aggregate up to 100,000 shares of the Company’s common stock at an exercise price of $2.00 per share.

On April 16, 2024, the Company amended the Subscription Agreement (the “First Amendment”) to complete the sale of $225,000 of additional Senior Secured Notes and Warrants to purchase an aggregate of 56,250 shares of the Company’s common stock to Purchasers. On July 30, 2024, the Company repaid an aggregate total of $115,000 of principal to Purchasers in settlement of their Senior Secured Notes.

The First Amendment incorporates and amends certain provisions of the Subscription Agreement. The First Amendment also (i) increased the aggregate principal amount of the Senior Secured Notes available to be sold from time to time under the Subscription Agreement from $400,000 to $2,000,000, (ii) increased the number of shares of common stock of the Company available to be issued under Warrants sold from time to time under the Subscription Agreement from 100,000 to 600,000, (iii) provides for an aggregate one-time payment in the amount of $46,290 to the initial Investors in the Senior Secured Notes and the issuance to them of Warrants to purchase 100,000 shares of common stock, in consideration of their agreement to enter into the First Amendment, and (iv) provided for the payment of up to $80,000 to Eagle Vision Fund with the proceeds of notes to be issued by the Company at subsequent closings of sales of Senior Secured Notes and Warrants, in consideration of services rendered and to be rendered by Eagle Vision to holders of the Senior Secured Notes while such notes are outstanding, including acting as collateral agent and due diligence and collateral monitoring services.

During the period of May 14, 2024, through May 22, 2024, the Company completed the sale of an aggregate of $1,050,000 of Senior Secured Notes and Warrants to purchase an aggregate of 262,500 shares of the Company’s common stock, to a group of investors led by Eagle Vision, an affiliate of John Dalfonsi, a director of the Company and its Chief Financial Officer.

In the aggregate, through a series of closings pursuant to the Subscription Agreement, including the sales described above, the Company issued an aggregate $1,675,000 of principal pursuant to the Senior Secured Notes and Warrants to purchase an aggregate 518,750 shares of common stock.

The Senior Secured Notes mature on the earlier of December 31, 2025, or the occurrence of a Qualified Subsequent Financing or Change of Control (as such terms are defined in the Subscription Agreement). In addition, the Senior Secured Notes are subject to covenants, events of defaults and other terms and conditions set forth in the Subscription Agreement. The Company’s obligations under the Senior Secured Notes are secured by liens on substantially all of the Company’s assets pursuant to the terms of the Security Agreement entered into by the Company on January 10, 2024, in favor of holders of the Senior Secured Notes.

In connection with the sale of the Purchased Securities to Kaufman Kapital under the SPA, the Company entered into an Omnibus Amendment to Note Documents with substantially all of the Holders of the Company’s Senior Secured Notes and Warrants issued under that certain Subscription Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i) the exercise price of the Warrants issued to the Holders was reduced from $2.00 to $1.00, (ii) the outside maturity date of the Senior Secured Notes held by the Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension in the event the maturity date of the Convertible Note is extended), (iii) the Company’s obligation to make payments of principal under the Senior Secured Notes held by the Holders beginning July 1, 2024 has been eliminated, and instead all obligations of the Company under such Senior Secured Notes will be due in one lump sum on the maturity date of the Senior Secured Notes, and (iv) the Company’s obligations under the Convertible Note and liens granted to the holder thereof, will be pari passu with the Company’s obligations under the Senior Secured Notes held by the Holders and liens granted to the holders thereof. The amendment warrants resulted in $89,949 of additional interest expense during 2024.

In accordance with ASC 470, the Company recorded total discounts of $339,698, including $80,908 on the relative fair value of the Warrants during the year ended December 31, 2024. The discounts were amortized to interest expense during 2024 using the effective interest method.

Eagle Vision has been paid aggregate cash fees in the amount of $177,500 from the sales of the Senior Secured Notes in consideration of services rendered by Eagle Vision to the Company and the holders of the Senior Secured Notes, including for conducting due diligence with respect to the Company, monitoring the performance by the Company of its obligations under the Senior Secured Notes, servicing the interest and principal payments for holders of the Senior Secured Notes, engaging in ongoing discussions with the Company’s management regarding the Company’s operations and financial condition, acting as collateral agent, and evaluating financial and non-financial information related to the Company. The Company has also paid an aggregate of $35,000 of the investors’ legal fees from sales of the Senior Secured Notes.

During the year ended December 31, 2025, the Company repaid $1,560,000 of remaining principal outstanding under the Senior Secured Notes. The principal outstanding is $0 as of December 31, 2025.

During the year ended December 31, 2025, of the 518,750 warrants issued to purchasers of the Senior Secured Notes, warrants were exercised to purchase an aggregate of 362,500 shares of the Company’s common stock at an exercise price of $1.00 per share aggregate cash proceeds of $362,500.

Notes payable to related parties as of December 31, 2025 and December 31, 2024, consists of the following:

 Schedule of Notes Payable Related Parties 

The Company recognized $445,683 of interest expense on convertible notes payable, related parties for the year ended December 31, 2025, consisting of $418,406 of stated interest expense, $21,320 of amortized debt discounts and $5,957 of amortized debt discounts due to warrants.

The Company recognized $261,636 of interest expense on notes payable, related parties for the year ended December 31, 2025. The Company recognized $664,847 of interest expense on notes payable, related parties for the year ended December 31, 2024, consisting of $235,200 of stated interest expense, $258,790 of amortized debt discounts and $80,908 of amortized debt discounts due to warrants, along with $89,949 of additional interest expense related to the modification of warrants issued to Senior Secured Notes purchasers.

EnWave Equipment Promissory Note

On May 22, 2023, the Company entered into an equipment purchase agreement with EnWave for the purchase of a used 100kW REV vacuum microwave dehydration machine (the “Third EnWave Machine”). Cash payments of $500,000 were paid towards the $1,000,000 purchase price on the Third EnWave Machine, while the $500,000 balance due is to be paid in twelve (12) monthly installments of $44,424, bearing interest 12% per annum, commencing August 1, 2024.

The Company is also required to enter an Equipment Purchase Agreement for a 120kW, or greater, rated power EnWave Equipment (the “Fourth EnWave Machine”) on, or before, December 31, 2026, and to satisfy the payment obligations required with respect to the Fourth EnWave Machine by the License Agreement. The license is not discernible from the equipment; therefore, the license costs have been capitalized and depreciated over the useful life of the equipment.

On September 16, 2025, the Company and EnWave entered into (i) a Fifth Amendment to License Agreement (the “Amendment”), which amended certain terms of the License Agreement between the Company and EnWave originally dated May 7, 2021 (as amended, the “License Agreement”), and (ii) an Equipment Purchase Agreement (the “Purchase Agreement”).

Pursuant to the Purchase Agreement, the Company also purchased from EnWave a refurbished 120kW REV vacuum microwave dehydration machine for a purchase price of $1,500,000. The purchase price is payable in 24 equal monthly installments, commencing April 1, 2026, pursuant to a secured promissory note bearing interest at the rate of 8.00% per annum (see Note7).

See Note 19 – Commitments and Contingencies for additional information on the License Agreement.

SBA EIDL Loan Agreement

On May 17, 2020, the Company entered into a loan agreement with the United States Small Business Administration (the “SBA”), as lender, pursuant to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business (the “EIDL Loan Agreement”) encompassing a $34,500 Promissory Note issued to the SBA (the “EIDL Note”) (together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest at 3.75% per annum. In connection with entering into the EIDL Loan, the Company also executed a security agreement, dated May 17, 2020, between the SBA and the Company pursuant to which the EIDL Loan is secured by a security interest on all of the Company’s assets. Under the EIDL Note, the Company is required to pay interest payments of $169 every month beginning May 17, 2021; however, the SBA extended the repayment date to November 17, 2022. All remaining principal and accrued interest is due and payable on May 17, 2050. The EIDL Note may be repaid at any time without penalty.

The Company has notes payable (in addition to the Senior Secured Notes and the notes payable to Kaufman Kapital described above), consisting of the following as of December 31, 2025 and December 31, 2024:

 Schedule of Notes Payable 

The Company recognized $17,058 and $19,809 of interest expense on these notes payable for the years ended December 31, 2025, and 2024, respectively.

The schedule of principal maturities of debt as of December 31, 2025 are as follows:

Schedule of Maturities of Debt

The Company recognized aggregate interest expense during the years ended December 31, 2025 and December 31, 2024 as follows:

 Schedule of Recognized Interest Expense