v3.26.1
Notes Payable and Convertible Debentures
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Notes Payable and Convertible Debentures

Note 6 – Notes Payable and Convertible Debentures

 

Schedule of notes payable as of:

        
   December 31,   December 31, 
   2025   2024 
Notes payable   $2,336,554   $2,046,001 
Total Notes payable   2,336,554    2,046,001 
Convertible notes payable, net of discount   1,825,645    1,769,583 
Total notes payable & Convertible debentures  $4,162,199   $3,815,584 

 

On May 1, 2023, the Company amended its convertible promissory note agreement with Sharing Services Global Corporation (“SHRG”), which was subsequently assigned to American Pacific Bank – DSS. Under the amended agreement, SHRG capitalized accrued interest of $222,556 and waived its conversion rights under the original agreement. As a result of the amendment, the promissory note was no longer considered convertible and has been classified as notes payable in the accompanying consolidated balance sheets. As of December 31, 2025 and 2024, the outstanding balance related to this note was $1,492,340 and $1,349,915, respectively.

 

On October 24, 2023, November 20, 2023 and January 4, 2024, the Company entered into three promissory notes with an investor for aggregate proceeds of $475,000. The notes accrue interest at 12% per annum and matured in March 2025. Accrued interest related to these notes totaled $45,792 as of December 31, 2025 and was included in accounts payable and accrued expenses in the accompanying consolidated balance sheet. As of December 31, 2025 and 2024, the outstanding principal balance on these notes was $475,000.

 

During 2021 and 2022, the Company issued various convertible promissory notes with maturity dates ranging from nine months to three years and interest rates ranging from 8% to 12% per annum. Certain financing arrangements included the issuance of common stock and warrants, which were recorded at fair value and recognized as debt discounts.

 

During 2022 and 2023, the Company entered into several debt modification, extension, settlement, and conversion agreements with certain noteholders, including MCUS LLC and Leonite Fund 1, LP. These transactions included amendments to conversion terms, extensions of maturity dates, issuances of common stock and warrants, settlements of outstanding obligations, and conversions of debt into equity. As a result of these transactions, the Company recognized gains and losses on extinguishment of debt and settlement of derivative liabilities, which are included in other income (expense) in the accompanying consolidated statements of operations.

 

On March 27, 2023, the Company entered into an investment agreement with an institutional investor for financing of up to $7,000,000 through a senior secured convertible promissory note (the “2023 Note”), together with related share purchase and warrant agreements. The note bears interest at 7% per annum and includes an original issue discount of 12%. Funding under the agreement is discretionary by the investor and subject to certain conditions. As of December 31, 2025, the Company had received aggregate funding of $1,561,660 under the agreement.

 

As of December 31, 2025, the aggregate outstanding balance of convertible notes payable, net of unamortized discount, was $1,825,645, compared to $1,769,583 as of December 31, 2024.

 

As of December 31, 2025, the Company had outstanding related-party convertible promissory notes with principal balances of $153,257 and $25,000 payable to the Company’s Chief Operating Officer and President, Mr. John W. Meyer, and director, Mr. Darryl V. Green, respectively.