NOTE 7 – NOTES RECEIVABLE

Convertible Notes Receivable

On April 8, 2025, the Company entered into a Securities Purchase Agreement (the “Evofem April Purchase Agreement”) with Evofem, pursuant to which the Company purchased (i) a senior subordinated convertible note (the “Evofem April Note”) of Evofem in the principal amount of $2,307,692, and (ii) a warrant (the “Evofem April Warrant”) to purchase 149,850,150 shares of Evofem common stock for a purchase price of $1,500,000. The Evofem April Warrant is exercisable into shares of common stock of Evofem at an exercise price of $0.0154, subject to adjustment and may be exercised on a cashless basis. The Evofem April Warrant may not be exercised by the Company if, after giving effect to such an exercise, the Company would beneficially own in excess of 9.99% of Evofem stock. The fair value of the Evofem April Warrant was $235,389. The Evofem April Warrant is exercisable for a term of five years. The Company had fully funded the $1,500,000 on April 22, 2025.

The Evofem April Note is a senior subordinate obligation of Evofem and will accrue interest at a rate of 8% per annum, which will adjust to 12% upon an Event of Default (as defined in the Evofem April Note). The Evofem April Note is initially convertible into shares of common stock of Evofem at a conversion price of $0.0154 per share, subject to adjustment as described therein. The Evofem April Note may not be converted by the Company if, after giving effect to such conversion, the Company would beneficially own in excess of 9.99% of Evofem common stock. Unless earlier converted, or redeemed, the Evofem April Notes will mature on April 8, 2028. This note is accounted for as available for sale under ASC 320 – Investment in Debt Securities.

The Company recorded the notes at fair value of $4,367,212 which was comprised of $1,938,905 from the warrants issued with the note and $2,428,307 from the principal and interest on the note, which included $2,307,692 from principal and $136,923 from accrued interest. During the year ended December 31, 2025, the Company recognized a day one gain of $204,278.

As of March 31, 2026, the Evofem April Note has an outstanding principal balance of $2,307,692, a fair value of $2,495,633, and accrued interest of $0. During the three months ended March 31, 2026, the Company recognized $0 in interest income and a change in fair value on the notes of $67,326.

On June 26, 2025, the Company entered into a Securities Purchase Agreement (the “Evofem June Purchase Agreement”) with Evofem, pursuant to which the Company purchased (i) a senior subordinated convertible note (the “Evofem June Note”) (collectively with the Evofem April Note, the “Evofem Notes”) of Evofem in the principal amount of $1,423,077, and (ii) a warrant (the “Evofem June Warrant”) to purchase 92,407,592 shares of Evofem common stock for a purchase price of $925,000. The Evofem June Warrant is exercisable into shares of common stock of Evofem at an exercise price of $0.0154, subject to adjustment and may be exercised on a cashless basis. The Evofem June Warrant may not be exercised by the Company if, after giving effect to such an exercise, the Company would beneficially own in excess of 9.99% of Evofem stock. The fair value of the Evofem June Warrant was $92,682. The Evofem June Warrant is exercisable for a term of five years. The Company had fully funded the $925,000 on June 26, 2025.

The Evofem June Note is a senior subordinate obligation of Evofem and will accrue interest at a rate of 8% per annum, which will adjust to 12% upon an Event of Default (as defined in the Evofem June Note). The Evofem June Note is initially convertible into shares of common stock of Evofem at a conversion price of $0.0154 per share, subject to adjustment as described therein. The Evofem June Note may not be converted by the Company if, after giving effect to such conversion, the Company would beneficially own in excess of 9.99% of Evofem common stock. Unless earlier converted, or redeemed, the Evofem June Notes will mature on June 26, 2028. This note is accounted for as available for sale under ASC 320 – Investment in Debt Securities.

The Company recorded the notes at fair value of $2,667,701 which was comprised of $1,196,149 from the warrants issued with the note and $1,471,552 from the principal and interest on the note, which included $1,423,077 from principal and $59,453 from accrued interest. During the year ended December 31, 2025, the Company recognized a day one gain of $123,793.

As of March 31, 2026, the Evofem June Note has an outstanding principal balance of $1,423,077, a fair value of $1,512,031, and accrued interest of $0. During the three months ended March 31, 2026, the Company recognized $0 in interest income and a change in fair value on the notes of $18,110.

During the three months ended March 31, 2026, the Company has adjusted the fair value of the Evofem Notes by $107,805 bringing the total fair value of the Evofem Notes to $4,007,664 as of March 31, 2026. The fair value of the convertible notes receivable was estimated using a Monte Carlo Model with the following assumptions:

The following table sets forth a summary of the changes in the Evofem Notes:

For the three months ended March 31, 2026, the fair value of each warrant granted with the convertible notes receivable was estimated using the assumption and/or factors in the Monte-Carlo Model as follows:

The risk-free interest rate assumption for warrants granted is based upon observed interest rates on the United States Government Bond Equivalent Yield appropriate for the expected term of warrants.

The Company determined the expected volatility assumption for warrants granted using the historical volatility of Evofem’s common stock.

The dividend yield assumption for warrants granted is based on Evofem’s history and expectation of dividend payouts. Evofem has never declared nor paid any cash dividends on its common stock.