v3.26.1
NOTES PAYABLE
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 4 – NOTES PAYABLE

 

Notes payable consist of the following at March 31, 2026 and December 31, 2025:

 

   March 31, 2026   December 31, 2025 
   (Unaudited)   (Audited) 
District 2 Capital Fundor (past due at 12/31/25)  $-   $362,500 
Agile Capital Funding and Agile Lending   1,541,567    613,985 
NPA Note Holders (in default at 12/31/25)   -    2,850,000 
Debt discount   (69,335)   (21,875)
Total notes payable, net of debt discount  $1,472,232   $3,804,610 

 

District 2 Capital Fundor

 

On May 6, 2025, the Company issued a Promissory Note (the “District 2 Note”) in favor of District 2 Capital Fundor. The Company promises to pay to the order of District 2 Capital Fundor not later than six months from date of the Note, the principal amount of $362,500. This Note was issued in connection with extinguishment of Holder’s outstanding warrant dated August 19, 2024 (125,000 warrants). As of December 31, 2025, the Note had an outstanding principal balance of $362,500 and accrued interest of $19,618 and was past due. The District 2 Note and accrued interest were paid off during the three months ended March 31, 2026.

 

Agile Capital Funding and Agile Lending

 

During the year ended December 31, 2025, the Company entered into three separate business loan and security agreements (the “2025 Term Loans”) with a lender for short-term loans to be provided by the lender, or the lender’s assignees (collectively, the “Lenders”) and mature seven months from the date the amounts are borrowed. The loans are secured by a blanket lien on the Company’s assets. The loans may be prepaid, subject to payment of a prepayment fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the maturity date. The Company borrowed under three short-term borrowing arrangements during the year ended December 31, 2025, borrowing a gross amount of $4,650,000, net of fees of $225,000, which was recorded as a debt discount and is being amortized over the term of the agreements. During the year ended December 31, 2025, the Company made total repayments of $4,036,015. During the year ended December 31, 2025, the Company amortized $203,125 of the debt discount to interest expense, resulting in unamortized debt discount of $21,875 as of the year then ended. As of December 31, 2025, the Company had outstanding borrowings of $613,985, and unamortized debt discount of $21,875, resulting in net balance of $592,110. The 2025 Term Loans and accrued interest were paid off during the three months ended March 31, 2026.

 

On February 22, 2026, the Company entered into a separate business loan and security agreement (the “2026 Term Loan”) with the same lender as the 2025 Term Loans for an additional short-term borrowing. The 2026 Term Loan, together with any assignments thereof, is provided by the lender and its assignees (collectively, the “Lenders”) and matures thirty-two weeks from the date the amounts are borrowed. The loans are secured by a blanket lien on the Company’s assets. The loans may be prepaid, subject to a prepayment fee equal to the aggregate amount of interest that would otherwise be payable through the maturity date at the contractual interest rate. During the three-month period ended March 31, 2026, the Company borrowed an aggregate gross amount of $1,775,000 under three short-term borrowing arrangements and incurred an administrative agent fee of $88,750, which was paid at closing from the proceeds of the 2026 Term Loan and recorded as a debt discount. During the three-month period ended March 31, 2026, the Company made total repayments of $233,433. As of March 31, 2026, the Company had outstanding borrowings of $1,541,567, and unamortized debt discount of $69,335, resulting in a net balance of $1,472,232.

 

NPA Note Holders

 

On September 12, 2025, the Company entered into a Note Purchase Agreement (the “NPA”) with four holders pursuant to which it issued to such holders certain unsecured promissory notes (the “Notes”). The Notes are (i) in the total principal amount of $2,111,111 with an Original Issuance Discount (“OID”) equal to 10% that resulted in the Company receiving net proceeds of $1,129,400 following deductions for expenses, including an 8% placement agency fee and 1% non-accountable allowance paid to RBW Capital Partners LLC (“RBW”), a division of Dawson James Securities, Inc., under the terms of a Placement Agency Agreement dated September 5, 2025, between the Company and RBW, and repayment of principal and accrued and unpaid interest of $509,600 owed to Hudson Global Ventures, LLC (“Hudson Global”) under a convertible note in the principal amount of $455,000 issued under the term of a Securities Purchase Agreement dated August 27, 2025, (ii) due the earlier of three (3) months from the dates of the Notes which are all September 12, 2025, or in the event of a prior subsequent financing by the Company, the Notes at the option of the holder must be repaid in full or, if applicable, are exchangeable into the consideration in the subsequent offering, (iii) subject to a payment in the event of a default of 120% of the unpaid principal amount, accrued interest and all other amounts owing under the Notes, which amount increases by 5% every 30 days following the date of the event of default until the Notes are paid in full (the “Mandatory Default Amount”) and (iv) limited to prepayment only upon a change of control of the Company subject to payment of the Mandatory Default Amount. The Company was deemed to be in default and recorded an additional 120% of the unpaid principal amount, or $738,889. As of December 31, 2025, the loan reflects an outstanding principal balance of $2,850,000, and accrued interest of $158,175.

 

 

During the three months ended March 31, 2026, the Company satisfied and extinguished the NPA obligations in full. Settlement payments included repayment of outstanding principal of $2,850,000, accrued interest of $158,175, and other contractual amounts. The Company evaluated the extinguishment under ASC 470-50, Debt — Modifications and Extinguishments, and determined that the settlement amounts did not exceed the carrying value of the obligations as recorded at December 31, 2025. Accordingly, no gain or loss on extinguishment was recognized in the condensed consolidated statement of operations. During the three months ended March 31, 2026, the Company amortized $41,289 of deferred financing costs to interest expense related to the remaining debt obligations.

 

Notes payable – related party

 

On April 3, 2025, April 16, 2025, June 20, 2025, July 8, 2025, and July 12, 2025, the Company received from ICT Investments, the owner of the majority of outstanding shares of the Company’s common stock, unsecured loans in the principal amount of $200,000, $400,000, $20,000, $101,000, and $30,000 respectively (the “ICT Loans”). Laser Photonics issued promissory notes, with interest at $20,000, $40,000, $2,000, $10,000 and $3,000, respectively, and a maturity date of May 31, 2025, June 30, 2025, August 30, 2025, September 8, 2025, and September 12, 2025, respectively. On September 12, 2025, the Company amended the promissory notes to include a default provision that upon default, the loans bear an annual interest rate of 10% and are due on demand. The unpaid principal balance of the ICT loans as of December 31, 2025, was $751,000. The unpaid interest balance as of December 31, 2025, was $111,623, which included in the balance of accrued expenses in the accompanying consolidated balance sheets as of the year then ended. These promissory notes and accrued interest were paid off during the three months ended March 31, 2026.