v3.26.1
Convertible Notes
9 Months Ended
Sep. 30, 2025
Convertible Notes [Abstract]  
Convertible notes

Note 12 — Convertible notes

 

The Company entered into a series of convertible note agreements with investors as described below. The Company also determined that the embedded conversions in the notes meets the scope exception to be considered indexed to a reporting’s own stock based on the two-step approach in accordance with ASC 815-40-15 and does not require to be separately accounted for as a derivative. As a result, the Company classified all the convertible notes as a debt instrument in its entirely.

 

On July 3, 2024, the Company entered into four convertible note agreements total of $410,000 from four investors. Each note bears 12% interest per annum and matures in 6 months. The Company shall repay the principal and accumulated interest after six months. If the investors choose to convert, the number of shares will be calculated by dividing the principal plus accumulated interest by $13.26. On November 19, 2024, the Company entered into four debt-to-equity conversion agreements, under which four investors agreed to convert a total of $410,000 into 155,303 shares of the Company’s common stock at a conversion price of $2.64 per share. However, the Company failed to complete the registration of the converted shares within 45 calendar days as required by the conversion agreements, the investors has elected to decline the conversion and has elected to reinstate the original debt liability in accordance with the original agreement and extended the maturity date to June and September 2025, with $230,000 maturing in June 2025 and $180,000 maturing in September 2025. The maturity due in June 2025 has been extended to November 30, 2025, based on loan extension agreements executed between the Company and two investors on August 12, 2025. The balance of these Notes were $410,000 and $410,000 as of September 30, 2025 and December 31, 2024.

 

On July 17, 2024, the Company entered into a securities purchase agreement with a certain investor pursuant to which the Company sold, in a private placement, a $180,000 convertible note with an original issue discount of $27,500, and a warrant to purchase up to 7,250 shares of common stock at an exercise price of $26.10 per share. The interest on the note was 12% per annum and the maturity date of the note was 12 months from July 17, 2024. The note can be converted into a fixed price of $12.00 per share. As consideration for entering into the securities purchase agreement, the Company issued a total of 6,000 shares to the investor on July 19, 2024. The warrant was exercisable on July 17, 2024 until five years from July 17, 2024. Approximately $58,090 from the convertible note proceeds was allocated to issuance of ordinary shares and warrants based on relative fair value. On July 30, 2024, the note was terminated as a result of the Company’s full payment of the note’s principal and accrued interest in the total amount of $212,400. As a result, all obligations under the note have been satisfied, and the note is no longer outstanding.

 

On August 13, 2024, the Company entered a securities purchase agreement with 1800 Diagonal Lending LLC (“Diagonal”), in connection with the issuance of a promissory note in the aggregate principal amount of $181,700, including an original issue discount of $23,700, closing expenses of $8,000 deducted from funding amount. The maturity date was June 15, 2025 and the interest rate of the note was 12% per annum. The initial funding was scheduled to be paid in 10 equal monthly installments of $20,350. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 25% of the market price. On April 16 and April 21, 2025, an aggregate of $20,000 and $23,701 of convertible note principal and accrued interest were converted into 222,222 and 263,342 shares of common stock, respectively. As of September 30, 2025 and December 31, 2024, the balance of this note was $0 and $92,045, respectively.

On September 18, 2024, the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount of $107,880 with an original issue discount of $14,880. The note bears a one-time interest charge of 13% and maturity date was July 15, 2025. Accrued, unpaid interest and outstanding principal, subject to adjustment, is required to be paid in five payments, with the first payment of $60,952 due on March 15, 2025, and the remaining four payments of $15,238 due on the fifteenth day of each month thereafter. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 25% of the market price. On May 5, May 9, and June 4, 2025, an aggregate of $22,160, $22,160 and $5,894 of convertible note principal and accrued interest were converted into 295,466, 295,466 and 148,090 shares of common stock, respectively. As of September 30, 2025 and December 31, 2024, the balance of this note were $0 and $85,000, respectively.

 

On October 14, 2024, the Company issued and sold to Diagonal a promissory note in the principal amount of $101,200 (reflecting a purchase price of $88,000 and an original issue discount of $13,200). The note bears a one-time interest charge of 14% of the principal amount. Accrued, unpaid interest and outstanding principal will be due in ten payments, each in the amount of $11,537. The first payment will be due November 15, 2024 with nine subsequent payments due on the 15th of each month thereafter. Only upon occurrence of an event of default under the note, the note will be convertible into common stock at a conversion price equal to 75% multiplied by the lowest trading price for the common stock during the ten trading days prior to the conversion date. On June 5, June 10, and June 12, 2025, an aggregate of $13,890, $13,590 and $11,630 of convertible note principal and accrued interest were converted into 324,912, 348,461 and 298,215 shares of common stock, respectively. As of September 30, 2025 and December 31, 2024, the balance of this note was $0 and $65,182, respectively.

  

On November 18, 2024, the Company signed one convertible note agreement of $90,000 from one investor. The note bears 12% interest per annum and matures in 6 months. The Company shall repay the principal and accumulated interest after six months. If the investors choose to convert, the number of shares will be calculated by dividing the principal plus accumulated interest by $29.31. On November 19, 2024, the Company entered into a debt-to-equity conversion agreement, under which the investor agreed to convert the $90,000 into 34,091 shares of the Company’s common stock at a conversion price of $2.64 per share. However, the Company failed to complete the registration of the converted shares within 45 calendar days as required by the conversion agreements, the investors has elected to decline the conversion and has elected to reinstate the original debt liability in accordance with the original agreement and extended the maturity date to September 2025. As of September 30, 2025 and December 31, 2024, the balance of this note was $90,000 and $90,000.

 

On December 17, 2024, the Company entered into a securities purchase agreement with a certain investor pursuant for a $180,000 convertible note with an original issue discount of $20,000. The note bears an annual rate of 12% and the maturity date of this note shall be December 17, 2025. The note can be converted into a fixed price of $2.50 per share. Net proceeds to the Company amounted to $150,000 (after deducting the fee paid to escrow agent of $10,000). The Company has also agreed to issue 118,000 shares of common stock for commitment fee, and a warrant to purchase up to 138,462 shares of common stock. As of December 31, 2024, the balance of this note was $164,483 and the shares and warrants were not issued. On January 21, 2025, the Company and investor mutually rescinded the above note and released the Company from all of its obligations. The Company returned the $160,000 to the investor on January 15, 2025. The Company recognized the difference between the debt’s reacquisition price of $160,000 and net carrying amount of $180,000 and recognized $0 and $20,000 as a gain for the three and nine months ended September 30, 2025.

 

On December 12, 2024, the Company entered into a convertible promissory note with Diagonal in the principal amount of $101,200 (reflecting a purchase price of $88,000 and an original issue discount of $13,200). The note bears 14% interest per annum and maturity date is December 15, 2025. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 25% of the market price. On June 20, 2025, an aggregate of $14,850 of convertible note principal and accrued interest were converted into 380,769 shares of common stock. In July 2025, an aggregate of $109,587 of convertible note principal and accrued interest were converted into 3,867,938 shares of common stock. As of September 30, 2025 and December 31, 2024, the balance of this note was $0 and $80,929, respectively.

 

On March 26, 2025, the Company signed a convertible note with Black Ice Advisors, LLC, face value of the note is $111,111, interest at 10%. The maturity date of this note was on March 26, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 35% discount to lowest trading price with a 20 day look back. The note can be prepaid within 6 months at 120% of principal and accrued interest. The net funds provided was $95,000 after deducting legal fees. As of September 30, 2025, the principal and accrued interest of the note were paid off.

 

On May 7, 2025, the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount of $140,250 with an original issue discount of $12,750 and closing expenses of $7,500 deducted from funding amount. The note bears an annual interest charge of 14% and maturity date was February 28, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. As of September 30, 2025, the balance of this note was $129,955.

On June 10, 2025, the Company entered into another securities purchase agreement with Diagonal pursuant to which the Company sold to the Diagonal a convertible promissory note in the aggregate principal amount of $126,260 with an original issue discount of $19,260 and closing expenses of $7,000 deducted from funding amount. The note bears an annual interest charge of 12% and maturity date was August 15, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. As of September 30, 2025, the principal and accrued interest of the note were paid off.

 

During the third quarter of 2025, the Company entered into another three securities purchase agreements with Diagonal pursuant to which the Company issued the following convertible promissory notes to the Diagonal: i) principal amount of $97,350 issued on July 23, 2025 with an original issue discount of $14,850 and closing expenses of $7,500 deducted from funding amount, which bears an annual interest charge of 12% and matures on April 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. As of September 30, 2025, the principal and accrued interest of the note were paid off; ii) principal amount of $90,200 issued on July 30, 2025 with an original issue discount of $8,200 and closing expenses of $7,000 deducted from funding amount, which bears an annual interest charge of 14% and matures on May 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. As of September 30, 2025, the balance of this note was $78,100; iii) principal amount of $155,610 issued on September 19, 2025 with an original issue discount of $22,610 and closing expenses of $8,000 deducted from funding amount, which bears an annual interest charge of 13% and matures on July 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 35% of the market price. As of September 30, 2025, the balance of this note was $126,072.

 

During the third quarter of 2025, the Company entered into the following two convertible promissory notes with CFI Capital LLC: i) principal amount of $120,000 issued on July 10, 2025 with an original issue discount of $12,000 and closing expenses of $4,000 deducted from funding amount. The note bears 6% interest per annum and matures on July 10, 2026, and ii) principal amount of $130,000 issued on September 18, 2025 with an original issue discount of $13,000 and closing expenses of $4,000 deducted from funding amount. The note bears 6% interest per annum and matures on September 18, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of these two convertible notes. The notes can be prepaid within 6 months at 105% of principal and accrued interest. As of September 30, 2025, the aggregate balance of the two convertible promissory notes was $221,153.

 

On July 30, 2025, the Company entered into a securities purchase agreement with Labrys Fund II, L.P., pursuant to which the Company sold to Labrys Fund II, L.P. a convertible promissory note in the aggregate principal amount of $230,000 with an original issue discount of $30,000 and closing expenses of $4,250 deducted from funding amount. The note bears an annual interest charge of 14% and matures on July 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 25% of the market price. As of September 30, 2025, the balance of this note was $201,568.

 

On August 5, 2025, the Company entered into a securities purchase agreement with FirstFire Global Opportunities Fund LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $172,500 with an original issue discount of $22,500 and closing expenses of $6,000 deducted from funding amount. The note bears an annual interest charge of 10% and matures on August 5, 2026. As consideration for entering into the securities purchase agreement, the Company issued a total of 200,000 shares to the investor on August 5, 2025. Principal and accrued interest can be converted into shares of common stock of the Company at a 25% discount to lowest trading price with a 10 day look back at any time on or following the issue date of the convertible note. As of September 30, 2025, the balance of this note was $122,834.

 

On August 4, 2025, the Company entered into a securities purchase agreement with AES Capital Management LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $37,500 with an original issue discount of $3,750 and closing expenses of $3,000 deducted from funding amount. The note bears an annual interest charge of 8% and matures on August 4, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of the convertible note. As of September 30, 2025, the balance of this note was $31,804.

 

On August 4, 2025, the Company entered into a securities purchase agreement with Lambda Venture Partners LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $82,500 with an original issue discount of $7,250 and closing expenses of $3,000 deducted from funding amount. The note bears an annual interest charge of 8% and matures on August 4, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 35% discount to the average of the three lowest trading prices with a 10 day look back at any time on or following the issue date of the convertible note. As of September 30, 2025, the balance of this note was $73,640.

On August 15, 2025, the Company entered into a securities purchase agreement with Actus Fund LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $100,000 with closing expenses of $9,000 deducted from funding amount and a warrant to purchase up to 500,000 shares of common stock at an exercise price of $0.20 per share. The note bears an annual interest charge of 12% and matures on August 15, 2026. The warrant was exercisable from August 15, 2025 through August 15, 2030. Approximately $46,664 from the convertible note proceeds was allocated to the issuance of warrants based on relative fair value. Principal and accrued interest can be converted into shares of common stock of the Company at a 30% discount to the volume-weighted average price of a 5 day look back at any time on or following the issue date of the convertible note. As of September 30, 2025, the balance of this note was $51,351.

 

Interest expenses in connection with the convertible notes for the three and nine months ended September 30, 2025 amounted to $343,294 and $545,955, respectively.