v3.26.1
DEBTS
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBTS

NOTE 5 DEBTS

 

The following table presents the details of the principal’s outstanding:

  

   March 31, 2026   December 31, 2025  

APR on

March 31, 2026

   Maturity  Collateral
Convertible Notes
(a,b,c)		  $18,069,600   $18,834,348    0.00 – 10.00%   September 2023- October 2030  Substantially all Company assets
Notes payable to financial institutions and others   366,634    501,495    3.75-8.5%   August 2025- November 2052  Substantially all Company assets
                      
Total  $18,436,234   $19,335,843            
Unamortized debt discount   (2,084,732)   (2,363,231)           
Debt, net of Unamortized debt Discount  $16,351,502   $16,972,612            

 

SCHEDULE OF INTEREST EXPENSE DEBT 

   For the three months ended March 31, 
    2026    2025 
           
Interest expense  $1,113,417   $1,339,103 

 

 

As of March 31, 2026, the expected future principal payments for the Company’s debt are due as follows:

 

      
Twelve months ended March 31, 2027  $1,691,212 
Twelve months ended March 31, 2028   1,707,553 
Twelve months ended March 31, 2029   3,994 
Twelve months ended March 31, 2030   4,146 
Twelve months ended March 31, 2031 and thereafter   15,029,329 
Total  $18,436,234 

 

  (a)

Included in Convertible Notes are loans provided to the Company from two directors and an officer. The notes each have the following terms: three-year subordinated convertible promissory note of principal face amounts. Subject to other customary terms, a convertible promissory note with a principal amount of $600,000 payable to a director, together with accrued interest of $235,900, was converted into 379,955 shares of the Company’s common stock. The other remaining convertible promissory notes matured in May 2025, bear interest at an annual rate of 10% thereafter, which is payable annually in cash or common stock, at the holder’s discretion. At any time after issuance and prior to or on the maturity date, the notes are convertible at the option of the holder into shares of common stock at a conversion price of $3 per share.

 

During 2023, the Company issued convertible promissory notes. As an inducement to enter the financing transactions, the Company issued 1,391,667 warrants to the noteholders at an adjusted exercise price of $2.7 per warrant. The Company recorded a debt discount aggregating $5.6 million which was recognized as debt discount and additional paid-in capital in the accompanying balance sheet. The Company recognized $278,499 as amortized debt discount during the three months ended March 31, 2026, and 2025, respectively, and it is reflected as interest expense in the accompanying unaudited consolidated statement of operations.

     
  (b)

In March 2024, and as amended in June 2025, the Company and the Belami sellers entered into a letter agreement modifying certain obligations under the Belami stock purchase agreement. In connection with the letter agreement, the Company issued convertible promissory notes to each of the sellers (the “Seller Note(s)”) in substitution of an aggregate of $3,117,909 in cash due to the sellers in monthly principal and interest payments of $300,000 beginning in July 2025 until fully paid in June 2026. Additionally pursuant to the January 2026 letter agreement, the Company agreed to issue monthly restricted stock awards to the sellers as payment to partially satisfy interest and principal obligations under the notes for the period from February 2026 through June 2026. The number of shares issued each month is determined by dividing $83,333 by the lesser of the Company’s share price on the applicable grant date or $2.25 per share. The notes are convertible at $3 per share of common stock.

 

Additionally, the convertible promissory notes include a $1 million note payable to GE issued in April 2024. The convertible note is due in April 2027, does not bear interest and is convertible at a price of $1.07 per share.