NOTE 5 - RELATED PARTY TRANSACTIONS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| NOTE 5 - RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS
Notes Payable – Related Parties
On January 30, 2024, the Company signed an agreement with a major shareholder for a $165,000 note payable. The note accrues interest at a rate of 1.75% compounded annually (Note 6 – Promissory and Convertible Notes). The note had interest expense of $712 and $712 for the three months ended March 31, 2026 and March 31, 2025, respectively. As of March 31, 2026, the Company had recorded accrued interest of $6,258 related to the note within accrued interest on the Condensed Consolidated Balance Sheet.
AIBiotics Consulting Agreement with the CEO
On November 17, 2021, AIBiotics entered into an Executive Consulting Agreement (the “AIBiotics Consulting Agreement”), with Benjamin Kaplan (“BK”) to serve as the Company’s CEO for an initial term of 36 months. As of March 31, 2026 and December 31, 2025, the Company had cash compensation outstanding as accrued expense - related party due to the AIBiotics Consulting Agreement of $248,281 and $216,734, respectively. During the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation of $0 and $0, respectively, from Warrants issued in connection with the AIBiotics Consulting Agreement. The Company records stock-based compensation on the consolidated income statement as general and administrative expense.
Significant terms of the AIBiotics Consulting Agreement are as follows:
Annual Base Consulting Fee
Every calendar month the Company pays the CEO a consulting fee of $24,000, with an annual total fee of $288,000.
Bonus Compensation Milestones
The Company will pay the CEO a bonus in AIBiotics restricted stock or restricted stock units based on the following EBITDA milestones. As of March 31, 2026, no EBITDA milestones were met, and no amounts have been recorded for the bonus milestones.
The Company will pay the CEO a bonus in restricted stock or restricted stock units based on the following AIBiotics market capitalization by maintaining the below market cap for AIBiotics for a period of 22 consecutive trading days:
Stock Grants – Significant Transactions
Upon the Company closing a Significant Transaction, the CEO shall be granted shares of AIBiotics common stock or a new series of AIBiotics preferred shares that is convertible into AIBiotics common stock equal to 5% of the value of all the consideration, including any stock, cash or debt of such completed transaction. A “Significant Transaction” shall mean a financing of at least $500,000 or the closing of an acquisition with a valuation of at least $1,000,000 for AIBiotics. As of March 31, 2026 and December 31, 2025, the Company had not granted any shares in relation to a Significant Transaction.
As of March 31, 2026 and December 31, 2025, there are no amounts accrued related to the bonuses.
Board Compensation
As of March 31, 2026 and December 31, 2025, the Company had accrued expenses from board compensation of $310,000 and $270,000, respectively. Accrued board compensation is included as part of Accounts payable and accrued expenses on the consolidated balance sheets. |
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