v3.26.1
Loans Payable
 9 Months Ended
Sep. 30, 2025
Loans Payable [Abstract]  
Loans payable

Note 11 — Loans payable (restated)

 

Short-term loans:

 

   As of
September 30,
2025		   As of
December 31,
2024		 
Factor H (1)  $646,978   $685,172 
Factor I (2)   166,573    207,921 
Factor J (3)   38,255    28,838 
Factor K (4)   55,663    66,404 
Factor L(5)   149,170    
-
 
Jie Zhang (6)   100,000    100,000 
Peng Zhang (7)   560,000    560,000 
RedOne Investment Limited (“RedOne”) (8)    230,000    230,000 
Agile Capital Funding, LLC (9)   387,142    480,798 
ClassicPlan Premium Financing, Inc. (10)   
-
    9,471 
Maximcash Solutions LLC (11)   124,248    300,000 
J.J.Astor & Co.(12)   1,362,987    
-
 
Other loans   72,383    
-
 
Total short-term loans  $3,893,399   $2,668,604 

  

Short-term loans consist of account receivable factoring agreements, subordinated business loan and third parties loans as of September 30, 2025 and December 31, 2024.

 

(1)On October 23, 2023, the Merchants entered into a standard merchant cash advance agreement with Factor H. The Company sold $768,500 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $503,500 was remitted to the Company, after the deduction of the total fees of $26,500. The Company agreed to pay a weekly installment of $22,814.84 for 32 weeks with a final extra payment of $38,500. The effective interest rate of this agreement was 85.36%. For the three and nine months ended September 30, 2024, the Company paid $181,950 and $409,443 principal of the loan.

 

On May 2, 2024, the Merchants entered into another standard merchant cash advance agreement with Factor H. The Company sold $1,240,150 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $807,500 was remitted to the Company, after the deduction of the total fees of $42,500. The Company agreed to pay a weekly installment of $41,000 for 31 weeks. The effective interest rate of this agreement was 93.05%. The Company use this loan to pay off $175,314 previous loan with Factor H that dated on October 23, 2023. For the three and nine months ended September 30, 2024, the Company paid $240,656 and $310,781 principal of the loan.

 

On November 18, 2024, the Merchants entered into another standard merchant cash advance agreement with Factor H. The Company sold $1,167,200 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $752,000 was remitted to the Company, after the deduction of the total fees of $48,000. The Company agreed to pay a weekly installment of $32,000 for 37 weeks. The effective interest rate of this agreement was 94.98%. The Company use this loan to pay off $566,150 previous loan with Factor H that dated on May 2, 2024. For the three and nine months ended September 30, 2025, the Company paid $5,000 and $38,194 principal of the loan.

(2)On August 29, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor I. The Company sold $213,000 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $142,500 was remitted to the Company, after the deduction of the total fees of $7,500. The Company agreed to pay a weekly installment of $8,192 for 26 weeks. The effective interest rate of this agreement was 84.22%. For the three and nine months ended September 30, 2024, the Company paid $15,015 and $15,015 principal of the loan.

 

On December 12, 2024, the Merchants entered into another standard merchant cash advance agreement with Factor I. The Company sold $319,500 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $213,750 was remitted to the Company, after the deduction of the total fees of $11,250. The Company agreed to pay a weekly installment of $13,313 for 24 weeks. The effective interest rate of this agreement was 84.03%. The Company use this loan to pay off $90,116 previous loan with Factor I that dated on August 29, 2024. For the three and nine months ended September 30, 2025, the Company paid $0 and $79,287 principal of the loan.

 

On July 31, 2025, Factor I filed a settlement agreement for Stay of Prosecution in the Seventeenth Judicial Court in Broward County, Florida, pursuant to which both parties agreed to pay a weekly installment of $10,000 for 18 weeks commencing on August 5, 2025 to December 2, 2025, followed by a final installment of $6,572 on December 9, 2025. The Company used this settlement agreement to pay off a $163,063 previous loan with Factor I dated on December 12, 2024, resulting in a $23,509 loss on debt settlement. For the three and nine months ended September 30, 2025, the Company paid $20,000 and $20,000 principal of the loan. The loan was paid off in October 2025.

 

(3)On September 27, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor J. The Company sold $72,500 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $47,470 was remitted to the Company, after the deduction of the total fees of $2,530. The Company agreed to pay a weekly installment of $3,021 for 24 weeks. The effective interest rate of this agreement was 88.98%. For the three and nine months ended September 30, 2025, the Company paid $0 and $28,838 principal of the loan.

 

On February 11, 2025, the Merchants entered into another standard merchant cash advance agreement with Factor J. The Company sold $94,250 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price $61,070 was remitted to the company, after the deduction of the total fees $3,930. The Company agreed to pay a weekly installment of $6,732 for 14 weeks. The effective interest rate of this agreement was 89.54%. The Company use this loan to pay off $18,125 previous loan with Factor J that dated on February 10, 2025. For the three and nine months ended September 30, 2025, the Company paid $2,368 and $22,815 principal of the loan.

 

(4)On September 30, 2024, the Merchants entered into a standard merchant cash advance agreement with Factor K. The Company sold $181,250 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $115,955 was remitted to the Company, after the deduction of the total fees of $9,045. The Company agreed to pay a weekly installment of $7,552 for 24 weeks. The effective interest rate of this agreement was 94.36%. For the three and nine months ended September 30, 2025, the Company paid $0 and $66,404 principal of the loan.

 

On February 11, 2025, the Merchants entered into another standard merchant cash advance agreement with Factor K. The company sold $147,000 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price $92,605 was remitted to the company, after the deduction of the total fees $7,395. The Company agreed to pay a weekly installment of $10,500 for 14 weeks. The effective interest rate of this agreement was 96.04%. The Company use this loan to pay off $37,760 previous loan with Factor K that dated on September 30, 2024. For the three and nine months ended September 30, 2025, the Company paid $0 and $23,785 principal of the loan.

On July 16, 2025, Factor K filed a complaint in Court in Monroe County, New York referring to an outstanding balance of $100,588 after payments of $46,551 on its loan agreement with the Company, dated February 11, 2025. The total claimed amount is $129,463 plus interest from June 30, 2025 and attorney fees. On July 22, 2025, Factor K and the Company entered into a Stipulation of Settlement Agreement pursuant to which each party agreed to a settlement amount and remittance schedule that commencing on July 23, 2025 through November 11, 2025. The Company used this settlement agreement to pay off a $95,500 previous loan with Factor K dated on December 12, 2024, resulting in a $33,963 loss on debt settlement. For the three and nine months ended September 30, 2025, the Company paid $73,800 and $73,800 principal of the loan. The loan was paid off in October 2025.

 

(5)On February 7, 2025, the Merchants entered into a standard merchant cash advance agreement with Wave advance Inc (the “Factor L”). The Company sold $183,750 of its accounts receivable balances on a recourse basis for credit approved accounts. The net purchase price of $107,500 was remitted to the Company, after the deduction of the total fees of $8,750. The Company agreed to pay a weekly installment of $13,125 for 14 weeks. The effective interest rate of this agreement was 113.58%. For the three and nine months ended September 30, 2025, the Company paid $0 and $116,250 principal of the loan.

 

On February 25, 2025, the Merchant entered into another standard merchant cash advance agreement with Factor L. The Company sold $280,770 of its accounts receivable balance on a recourse basis for credit approved accounts. The net purchase price $177,630 was remitted to the company, after the deduction of the total fees of $13,370. The Company agreed to pay a weekly installment of $17,550 for 16 weeks. The effective interest rate of this agreement was 95.63%. The Company use this loan to pay off $157,500 previous loan with Factor L that dated on February 7, 2025 resulting in $20,000 of gain on debt settlement. For the three and nine months ended September 30, 2025, the Company paid $0 and $39,067 principal of the loan.

 

On August 1, 2025, the Company and Factor L signed a settlement agreement that required payments from August 5 to October 27, 2025, for an aggregate amount of $201,170. The Company agreed to pay a weekly installment of $18,000 for 11 weeks from August 5, 2025 to October 20, 2025, followed by a final installment of $3,170 on October 27, 2025. The Company use this settlement agreement to pay off a $198,670 previous loan with Factor I dated on February 25, 2025, resulting in a $2,500 loss on debt settlement. For the three and nine months ended September 30, 2025, the Company paid $52,000 and $52,000 principal of the loan.

 

These receivable purchase agreements were accounted for as secured borrowing under ASC 860 since there is no legal, actual, effective transfer of the receivables to the Factors. Rather, the Factors only have generally claim against the receivable pools not a particular receivable. As of September 30, 2025 and December 31, 2024, outstanding balance amounted to $1,056,639 and $988,336, respectively.

 

(6)On October 30, 2023, NMI entered into a loan agreement with an independent third party pursuant to which the Company borrowed a principal amount of $100,000 with an annual interest rate of 12% for a term of one year. The loan was originally extended to April 15, 2025, subsequently extended to July 16, 2025, then extended to November 16, 2025. The loan balance as of September 30, 2025 and December 31, 2024 was $100,000 and $100,000, respectively.

 

(7)On March 7, 2024, the Company’s subsidiary Nature’s Miracles entered into a loan agreement with Peng Zhang, a 2.5% shareholder of the Company. The amount of the loan is $1,405,000 with 10% interest and is due on March 7, 2025. For the year ended December 31, 2024, Nature’s Miracles made a payment of $500,000 toward the loan. On November 19, 2024, the Company entered into a debt-to-equity conversion agreement, under which Peng Zhang agreed to convert the $345,000 of loan balance into 130,682 shares of the Company’s common stock at a conversion price of $2.64 per share. The loan was originally extended to July 16, 2025, then extended to November 16, 2025. As of September 30, 2025 and December 31, 2024, the loan balance was $560,000 and $560,000.
(8)On February 10, March 28, June 5, June 27, September 22, December 22, 2023 and February 20, 2024, Lakeshore entered into seven promissory notes with RedOne to which Lakeshore borrowed an aggregate principal amount of $380,000 with zero interest rate. On July 11, 2023, Lakeshore entered into a loan agreement with Deyin Chen (Bill) to which Lakeshore borrowed a principal amount of $125,000 with an annual interest rate of 8%. This loan was extended to March 11, 2024 with interest waived pursuant to a Side Letter to the loan agreements dated December 8, 2023. A payment of $75,000 was made upon close of the Merger on March 11, 2024 and the loan balance of $50,000 owed to Deyin Chen (Bill) was assigned to RedOne and the Company assumed the outstanding balance. The loan bears interest of 8% per annum. $50,000 was paid on July 29, 2024 and $150,000 was paid on November 11, 2024.

 

The balance of $230,000, originally due by December 11, 2024, was revised to be paid in two equal installments: the first installment of $115,000 no later than March 31, 2025, and the second installment of $115,000 no later than June 30, 2025. Both installments were extended to July 15, 2025, subsequently extended to September 10, 2025.

 

(9)On June 6, 2024, the Merchants entered into a subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $288,750, including the administrative agent fee of $13,750. The Company agreed to pay a weekly installment of $15,056 for 28 weeks. The effective interest rate of this agreement was 90.22%. The collateral consists of the Company’s right, title and interest in and to including the Company’s financial assets, goods, accounts, equipment, inventory, contract rights or rights to payment of money. The Company received the net proceeds on June 7, 2024. For the three and nine months ended September 30, 2024, the Company paid $255,808 and $275,000 principal of the loan.

 

On September 25, 2024, the Merchants entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $315,000, including the administrative agent fee of $15,000. The Company agreed to pay a weekly installment of $16,425 for 28 weeks. The effective interest rate of this agreement was 90.22%. The Company use this loan to pay off $195,806 previous loan with Agile Capital Funding, LLC and Agile Lending, LLC that dated on June 6, 2024. For the three and nine months ended September 30, 2024, the Company paid $0 and $0 principal of the loan. 

 

On November 21, 2024, the Merchants entered into another subordinated business loan and security agreement with Agile Capital Funding, LLC and Agile Lending, LLC for the principal amount of $575,000, including the administrative agent fee of $28,750. The Company agreed to pay a weekly installment of $29,982 for 28 weeks. The effective interest rate of this agreement was 90.80%. The Company use this loan to pay off $331,388 previous loan with Agile Capital Funding, LLC and Agile Lending, LLC dated on September 25, 2024. For the three and nine months ended September 30, 2025, the Company paid $16,880 and $93,656 principal of the loan. 

 

(10)On December 1, 2024, Visiontech and ClassicPlan Premium Financing, Inc., entered into a premium financing agreement with a total gross policy premium and related fees of $15,465 and financed $10,559 of it. Visiontech needs to pay a monthly installment of $1,286 for nine months with the last installment due on August 1, 2025. The effective interest rate of this loan was 22.57%. During the three and nine months ended September 30, 2025, the Company paid $2,505 and $9,471 principal of the loan.

 

(11)On December 30, 2024, the Merchants entered into a business loan and security agreement (the “Agreement”) with Maximcash Solutions LLC (the “Maxim”). Under the Agreement, the Maxim loaned $311,000 to the Company, which includes an $11,000 origination fee deducted at the time of funding. This loan carries an interest rate of 51.64% and an annual percentage rate of 59.40%. The loan matures on January 14, 2026. The Company will repay the Loan in 26 biweekly payments of $15,430, with a total repayment amount of $401,190 over a 12-month term. The loan is secured by all present and after-acquired property of the Company. As security to the loan, the Company shall issue 311,000 shares of its common stock to Maximin in the event of a loan default. For the three and nine months ended September 30, 2025, the Company paid $47,617 and $175,752 principal of the loan.

  

On July 8, 2025, Maxim filed a complaint against the Company in the Third Judicial Court of Utah pertaining to the loan agreement dated December 30, 2024 as a result of a failure to make the required repayment pursuant to the loan agreement. The claimed amount was $230,738 plus daily interest and attorney fees resulting in a $30,089 loss on debt settlement. On August 6, 2025, the Company entered into a Standstill Agreement with Maxim, which expired on October 6, 2025 to further negotiate the term of the loan. On August 7, the Company wired an interest payment of $61,720 to Maxim as agreed in the Standstill Agreement.

 

(12)On April 11, 2025, Zak Properties entered into a loan agreement with J.J. Astor & Co. (“JJ Astor”). Under the agreement, JJ Astor loaned $1,650,000 to Zak Properties, which included a $66,000 origination fee, a $99,000 debt broker fee, a $15,000 legal fee, and additional closing, title, and recording charges. The loan has a contractual maturity date of September 26, 2025. At closing, $480,000 of interest was withheld as an interest holdback and applied to the weekly payment structure. The effective interest rate was 43.39%. In January 2026, Zak Properties paid off the outstanding loan balance along with an additional $236,000 of interest. For the three and nine months ended September 30, 2025, Zak Properties made no principal payments on the loan.

Interest expenses for short term loans amounted to $60,027 and $376,794 for the three months ended September 30, 2025 and 2024, respectively.

 

Interest expenses for short term loans amounted to $1,040,742 and $805,009 for the nine months ended September 30, 2025 and 2024, respectively.

 

Short-term loans — related parties: refer to Note 13 Related Party transactions.

 

Long-term debts:

 

Long-term debts consist of three auto loans, one building loan, and one secured business loan as of September 30, 2025 and December 31, 2024.

  

The outstanding amount of the auto loans were $48,295 and $80,238 as of September 30, 2025 and December 31, 2024, respectively. On February 27, 2021, the Company purchased a vehicle for $68,802 and financed $55,202 of the purchase price through an auto loan. The loan requires monthly installment payment of $1,014 with the last installment due on February 28, 2026. The Company subsequently sold the auto and paid off the loan on September 18, 2025. On June 8, 2021, the Company purchased the second vehicle for $86,114 and financed $73,814 of the purchase price through auto loan. The loan requires monthly installment payment of $1,172 with the last installment due on June 23, 2027. On September 28, 2022, the Company purchased the third vehicle for $62,230 and financed $56,440 of the purchase price through auto loan. The loan requires a monthly installment payment of $1,107 with the last installment due on September 28, 2027. During the three and nine months ended September 30, 2025, the Company made total payments of $8,090 and $25,928 towards the auto loans, respectively. During the three and nine months ended September 30, 2024, the Company made total payments of $7,743 and $24,723 towards the auto loans, respectively.

 

Minimum required principal payments towards the Company’s auto loans as of September 30, 2025 are as follows:

 

Twelve months ended September 30,  Repayment 
2026  $25,292 
2027   23,003 
Total  $48,295 

 

The outstanding amount of the building loan was $2,709,084 and $2,771,645 as of September 30, 2025 and December 31, 2024, respectively. On January 10, 2022, the Company purchased one building and land for $4,395,230 and financed $3,000,000 of the purchase price through Bank of the West. The loan requires monthly installment payment of $15,165 with the last installment due on January 10, 2032. During the three and nine months ended September 30, 2025, the Company made total payments of $20,863 and $62,561 towards the loan, respectively. During the three and nine months ended September 30, 2024, the Company made total payments of $20,113 and $60,070 towards the loan, respectively.

 

Minimum required principal payments towards the Company’s building loan as of September 30, 2025 are as follows:

 

Twelve months ended September 30,  Repayment 
2026  $86,155 
2027   89,298 
2028   92,307 
2029   95,925 
2030   99,425 
Thereafter   2,245,974 
Total  $2,709,084 

 

The outstanding amount of the secured business loan was $3,059,859 and $3,127,742 as of September 30,2025 and December 31, 2024, respectively. On June 14, 2023, the Company’s subsidiaries Visiontech and Hydroman entered into a secured business loan agreement with Newtek Business Services Holdco 6, Inc. for a principal sum of up to $3,700,000 with a maturity date of July 1, 2033. The loan is secured by the Company’s building and guaranteed by the Company’s major stockholders. During the three and nine months ended of September 30, 2025, the Company made total payments of $0 and $67,883 towards the loan, respectively. During the three and nine months ended September 30, 2024, the Company made total payments of $39,199 and $112,951 towards the loan, respectively.

Minimum required principal payments towards the Company’s secured business loan as of September 30, 2025 are as follows:

 

Twelve months ended September 30,  Repayment 
2026  $269,824 
2027   241,046 
2028   283,844 
2029   334,239 
2030   393,583 
Thereafter   1,537,323 
Total  $3,059,859 

 

Interest expenses for long term loans amounted to $149,363 and $157,506 for the three months ended September 30, 2025 and 2024, respectively.

 

Interest expenses for long term loans amounted to $453,696 and $477,809 for the nine months ended September 30, 2025 and 2024, respectively.