NOTES PAYABLE |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | NOTE 7 – NOTES PAYABLE
On December 13, 2024, Cohen Enterprises, Inc., which is owned and controlled by Jacob Cohen, our Chief Executive Officer, entered into a Note Purchase Agreement with Mill End Capital Ltd. (“Mill End”), and sold a Promissory Note totaling $150,000 (the “Promissory Note”) to Mill End. The Promissory Note bears interest of 12% (default rate) and is due on January 2, 2025.
On January 15, 2025, the Company entered into a Debt Conversion Agreement (the “Debt Conversion Agreement”) with Mill End, pursuant to which acquired by Mill End from Cohen Enterprises on December 13, 2024, for $150,000.
Pursuant to the Debt Conversion Agreement, the Company and Mill End agreed to convert the entire $150,000 owed by the Company to Mill End under the Promissory Note, into an aggregate of shares of restricted common stock of the Company, based on an agreed conversion price of $1.50 per share.
Pursuant to the Debt Conversion Agreement, which included customary representations and warranties of the parties, Mill End agreed that the shares of common stock issuable in connection therewith were in full and complete satisfaction of amounts owed under the Converted Note.
On April 15, 2025, the Company borrowed $500,000 from Indigo Capital LP (the “Holder”), which loan was evidenced by a Promissory Note dated April 15, 2025 (the “Promissory Note”). The Promissory Note is unsecured and bears interest at 18% per annum, compounded monthly, with accrued interest payable in full on the maturity date, subject to acceleration and prepayment terms as described below. The Promissory Note matures on the earlier of (i) April 15, 2026 (the “Stated Maturity Date”), (ii) the date on which the Holder provides written notice of acceleration following an event of default or other specified triggering event, and (iii) five (5) business days following the closing of a Qualified Funding (a “Mandatory Prepayment”). “Qualified Financing” means a fundraising by the Company, other than in connection with the sale of notes on substantially similar terms as this Promissory Note, after the date of the Promissory Note, for the principal purpose of raising capital.
On, and effective on May 27, 2025, the Company entered into an Agreement to Amend Promissory Note (the “Agreement to Amend”), with the Holder, pursuant to which (a) the Holder and the Company agreed to amend and restate the Promissory Note into an Amended and Restated Convertible Promissory Note (the “A&R Note”); and (b) the Company granted the Holder warrants to purchase 275,482 shares of common stock (the “Holder Warrants”). The Agreement to Amend included certain representations and warranties to the Holder.
The A&R Note amended and restated the Promissory Note to (a) provide the Holder the option to convert the principal and accrued interest under the note into shares of common stock of the Company at a conversion price of $1.50 per share, subject to a 4.999% beneficial ownership limitation; and (b) remove the Mandatory Prepayment requirement. The Holder Warrants have an exercise price of $1.815 per share, a term through May 27, 2028 and cash only exercise rights. The Holder Warrants include a 4.999% beneficial ownership limitation. If the Holder Warrants are exercised in full, a maximum of shares of common stock of the Company would be issuable upon exercise thereof.
On July 16, 2025, Indigo Capital LP converted the full $500,000 principal amount of their note, and accrued interest due through maturity of $90,000, into an aggregate of shares of common stock of the Company at a conversion price of $1.50 per share, as set forth in the convertible promissory note.
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