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

NOTE 10 – CONVERTIBLE NOTES PAYABLE

 

Convertible notes payable consisted of the following:

 

   March 31,   December 31, 
   2026   2025 
         
November 2025 – Auctus Fund ($110,000)  $98,000   $110,000 
November 2025 – CFI Capital LLC ($150,000)   150,000    150,000 
November 2025 – GS Capital Partners LLC ($140,000)   140,000    140,000 
November 2025 – Labrys Fund II Note ($275,000)   252,725    275,000 
           
Total convertible notes payable   640,725    675,000 
           
Debt discount   (87,726)   (124,434)
           
Total notes payable to related parties (current)  $552,999   $550,566 

 

  ● November 11, 2025 – Auctus Fund, LLC - $110,000
     
    On November 11, 2025, the Company issued a convertible promissory note (the “Note”) to Auctus Fund, LLC in the principal amount of $110,000 pursuant to a Securities Purchase Agreement. The Note bears a one-time interest charge at 12%, equivalent to $13,200, which was earned in full on the issuance date. The Note matures twelve months from the issuance date, November 11, 2026. The Note may not be prepaid except as explicitly provided in the agreement. Any amounts not paid when due bear default interest at the lesser of 22% per annum or the maximum rate permitted by law.
     
    Conversion Features – Beginning six months after the issuance date, the holder may convert all or a portion of the outstanding principal and accrued interest into shares of the Company’s common stock. The conversion price is equal to 60% of the lowest trading price of the Company’s common stock during the fifteen (15) trading days prior to the conversion date, subject to certain adjustments.

 

 

In connection with the issuance of the Note, the Company issued two common stock purchase warrants to the lender:

 

  ○ Warrant A - Shares issuable: 78,571 shares with exercise price: $1.40 per share for five years from issuance date

 

  ○ Warrant B (Commitment Fee Warrant) - Shares issuable: 78,572 shares with exercise price: $1.40 per share with term for five years.

 

The warrants may be exercised for cash or on a cashless basis if the market price of the Company’s common stock exceeds the exercise price. The Company evaluated the warrant under ASC 470-20, Debt with Conversion and Other Options, and ASC 815-15, Derivatives and Hedging — Embedded Derivatives. The Company calculated the fair value of the warrant using a Black-Scholes based model and then determined the relative fair value of the warrants in relation to the net cash proceeds from the loan in the amount of $69,830, which was recorded as debt discount and additional paid-in capital. The debt discount is amortized over the life of the Note.

 

The Company evaluated the note terms under ASC 815-40-25 and determined that the Company has sufficient authorized shares to settle conversion, and the CEO has unilateral control to increase shares with no blocking contingencies.

 

  ● November 3, 2025 – CFI Capital LLC - $150,000

 

On November 3, 2025, the Company entered into a Securities Purchase Agreement with CFI Capital LLC pursuant to which the Company issued a 6% Convertible Redeemable Note with a principal amount of $150,000 (the “Note”). The Note bears interest at 6% per annum and matures on November 3, 2026. Interest may be paid in shares of the Company’s common stock at the holder’s election. The Note contains an original issue discount (“OID”) of $20,000, resulting in net proceeds of $130,000 received by the Company.

 

Conversion Features – Beginning six months after the issuance date, the holder may convert all or part of the outstanding principal and accrued interest into shares of the Company’s common stock. The conversion price is 65% of the lowest trading price of the Company’s common stock during the twenty trading days prior to the conversion date.

 

The Company evaluated the terms under ASC 815-40-25 and determined that the Company has sufficient authorized shares to settle conversion, and the CEO has unilateral control to increase shares with no blocking contingencies.

 

  ● November 10, 2025 – GS Capital Partners, LLC - $140,000

 

On November 10, 2025, the Company entered into a Securities Purchase Agreement with GS Capital Partners, LLC pursuant to which the Company issued a Convertible Promissory Note with a principal amount of $140,000. The note was issued with an original issue discount (“OID”) of $18,000, resulting in cash proceeds to the Company of $122,000. The note bears interest at a rate of 12% per annum. A full twelve-month interest amount is guaranteed and added to the principal balance on the issue date. The note matures on November 10, 2026, at which time all outstanding principal and interest become due and payable. Principal is scheduled to be repaid in six monthly installments of approximately $26,133 beginning on the 181st day after issuance unless earlier prepaid or converted in accordance with the terms of the note.

 

Conversion Feature – Upon the occurrence of an event of default, the holder has the right to convert all or a portion of the outstanding principal, accrued interest, and other amounts due under the note into shares of the Company’s common stock. The conversion price is equal to 65% of the lowest trading price of the Company’s common stock during the 15 trading days preceding the conversion notice.

 

The Company evaluated the terms under ASC 815-40-25 and determined that the Company has sufficient authorized shares to settle conversion, and the CEO has unilateral control to increase shares with no blocking contingencies.

 

 

  ● November 5, 2025 - Labrys Fund II Note - $275,000

 

On November 5, 2025, the Company entered into a Securities Purchase Agreement with Labrys Fund II, L.P. pursuant to which the Company issued a convertible promissory note with a principal amount of $275,000 (the “Note”). The Note was issued with an original issue discount (“OID”) of $30,000, resulting in gross proceeds of $245,000 received by the Company at issuance. The Note bears a one-time interest charge equal to 8% of the principal amount ($22,000) which is deemed earned upon issuance. The Note matures on November 5, 2026, at which time the outstanding principal amount, together with any accrued and unpaid interest and other applicable fees, becomes due and payable unless earlier converted in accordance with the terms of the Note.

 

The holder may convert all or any portion of the outstanding principal and accrued interest into shares of the Company’s common stock. The conversion price is equal to 85% of the lowest closing bid price of the Company’s common stock during the fifteen (15) trading days immediately preceding the applicable conversion date, subject to customary adjustments for stock splits, dividends, and similar transactions.

 

In connection with the issuance of the Note, the Company also issued 6,750 shares of common stock (“Commitment Shares”) to the investor as additional consideration under the Securities Purchase Agreement.

 

The Company evaluated the terms under ASC 815-40-25 and determined that the Company has sufficient authorized shares to settle conversion, and the CEO has unilateral control to increase shares with no blocking contingencies.