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| Debt | Note 15 – Debt The debt balances presented on the condensed consolidated balance sheets as of March 31, 2026 consist of deferred consideration of $6,250,000 and notes payable of $2,355,416. Deferred Consideration In connection with the acquisition of Grid AI Corp., the Company recognized deferred consideration payable of $7,000,000 as part of the purchase consideration. During the year ended December 31, 2025, the Company made cash payments of $750,000 toward this obligation. As of March 31, 2026, the outstanding balance was $6,250,000. The deferred consideration is non-interest bearing and is expected to be settled through future cash payments or other negotiated arrangements in accordance with the terms of the acquisition agreement. Notes Payable Notes payable activity during the period ended March 31, 2026:
All outstanding debt was classified as current as of March 31, 2026. Revolving Line of Credit Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025, pursuant to which the lender agreed to make available borrowings up to $2,000,000. As of March 31, 2026, the Company had drawn $700,000 under the facility. Borrowings under the Revolving Loan Agreement bear interest at a rate of 18% per annum. The proceeds from the facility are being used for general corporate purposes. The Revolving Loan Agreement has a contractual maturity date of January 29, 2026 and contains customary affirmative and negative covenants, including restrictions on the incurrence of additional indebtedness, affiliate transactions and certain corporate actions without lender consent. On April 1, 2026, the Company received a notice of default from the lender under the Revolving Loan Agreement due to the failure to repay the outstanding balance by the maturity date. The lender demanded repayment of the outstanding principal balance together with accrued interest and other amounts due under the agreement. On May 14, 2026, GridAI Technologies Corp. entered into a Debt Settlement and Subscription Agreement with 1396974 BC Ltd. to settle the outstanding indebtedness, consisting of principal and accrued interest related to a revolving loan agreement dated January 27, 2025. Pursuant to the agreement, the Company paid $800,000 in cash and issued 71,482 shares of common stock at a deemed price of $3.25 per share in full satisfaction of the outstanding balance. As a result, the indebtedness has been fully satisfied and extinguished, and the Company no longer has access to borrowings under the revolving loan agreement. Promissory Note with Warrants During the period from October 17, 2025 through December 26, 2025, the Company entered into financing arrangements that included promissory notes issued together with warrants to purchase shares of the Company’s common stock. The aggregate principal amount of the notes issued was $2,300,000. The warrants issued in connection with these arrangements were determined to have an aggregate fair value of approximately $1,040,851 at issuance, which was recorded as a debt discount. The notes do not bear stated interest and are accreted to their face value over the term of the instruments using the effective interest method. During the three months ended March 31, 2026, the Company recognized additional amortization of debt discount of approximately $17,841. The debt discount primarily related to the fair value of warrants issued in connection with such promissory notes, totaling approximately $336,270. After repayments and amortization of the debt discount, the aggregate carrying value of the Company’s 2025 and 2026 promissory notes, was $1,606,564 as of March 31, 2026. The promissory notes are unsecured and mature one year and one day from their respective issuance dates. |
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