Note 3– Convertible Notes Payable

On December 5, 2025, January 15, 2026 and January 30, 2026, Xyra Corp., the Company’s wholly owned subsidiary issued three one-year convertible notes, amounting to $60,000, with maturity dates from December 5, 2026 to January 30, 2027, with a coupon of 8% to accredited investors. The Company, prior to the maturity date, has the option to extend the maturity date of the note by an additional six months. The note may be prepaid at any time without penalty.

The holder has an option to convert the principal of the convertible note into Xyra common stock for a period of six months once notified by the Company, in writing, of a public listing on any recognized U.S. national or regional stock exchange or on any of the markets operated by the OTC Markets Group. The conversion price will be 50% of the 5-day average closing price immediately prior to conversion. Xrya, at its sole discretion may allow the conversion of unpaid interest into Xyra common stock for the same period allowed for the conversion of the principal.

Should Xyra not achieve a public offering by December 5, 2026, the holder has the option to convert the principal outstanding into common shares of the Company for a period of six months from December 5, 2026. The conversion price will be the greater of 80% of $0.06 or the current CTI market price. The market price will be determined as the weighted average of the high and low trading prices of the Company stock over a 5-day period. The Company at its sole discretion may allow the conversion of interest at any time after the maturity date and during any extended period exercised by Xyra.

The Company analyzed the conversion options for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the conversion options should be accounted as a derivative liability since it does not have an explicit limit to the number of shares to be delivered upon settlement of the conversion option (see Note 5). The cumulative fair value of the derivative liability upon issuance of the convertible notes payable at issuance date amounted to $38,000, and accounted as a debt discount, which is being amortized to interest expense over the term of the corresponding notes payable.