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

NOTE 6 – NOTES PAYABLE, CONVERTIBLE DEBT & DERIVATIVE LIABILITY

 

Summary of Outstanding Debt

 

Instrument  Description  12/31/2025   Conversions, Modificatons & Repayments   3/31/2026   Due Date  Default  Status
Notes Payable                           
AJB Capital  AJB Conversion   81,934         81,934   Dec-28  No   
CoinTracking Note      254,400         254,400   Past Due  Yes  Ongoing discussions
Three Mile Creek  Related Party   188,552         188,552   Jan-26  Yes  Secured; No Demand
Fast Capital      8,784         8,784   Jan-24  Yes  No Demand
EKSA Holdings  Converted and Modified        336,515    336,515   Aug-26  No   
Practivist  Converted and Modified        100,000    100,000   Aug-26  No   
Robert Nail  Converted and Modified        419,064    419,064   Aug-26  No   
Individual Shareholders           125,000    125,000   Demand  No  No Demand
Note Discount      -    (10,107)   (10,107)  N/A  No   
Total Notes Payable      533,670    970,472    1,504,142          
                            
Convertible Debt                           
EKSA Holdings  Converted and Modified   336,515    (336,515)   -         No longer convertible
Practivist  Converted and Modified   100,000    (100,000)   -         No longer convertible
Robert Nail  Converted and Modified   419,064    (419,064)   -         No longer convertible
Ryan Crownholm  Repaid   116,430    (116,430)   -         Paid
Averitt Note      38,771         38,771   Jan-26  Yes  Secured; no demand
Individual Shareholders      125,000    (125,000)   -         Not Convertible
Note Discount      (10,107)   10,107    -          
                 -          
Total Convertible Debt      1,125,673    (1,086,902)   38,771          
                            
Derivative Liability (BS)      563,417    (560,930)   2,487          
Change in Derivative Liability (IS)           560,930    560,930          

 

At December 31, 2025, derivative liabilities were measured using an option-pricing methodology based upon market inputs including stock price, historical volatility, expected term, dividend yield and risk-free interest rates.

 

During the three months ended March 31, 2026, management completed an instrument-by-instrument review of the Company’s outstanding debt agreements. Based on management’s evaluation of the outstanding debt instruments at March 31, 2026, only one instrument continued to require derivative accounting under ASC 815.

 

AJB NOTE

 

On December 19, 2025, AJB converted a total of fourteen (14) notes outstanding listed below, totaling $2,931,356 in principle and $737,879 in accrued interest owed to AJB for 446,477,338 shares of the Company’s Common Stock. As a result, 13 of the notes were paid down to zero at December 31, 2025. As of December 31, 2025 the remaining balance on the AJB Note amounted to $81,934 plus accrued interest of $13,637.

 

FAST CAPITAL

 

On February 2, 2023, the Company borrowed funds pursuant to a SPA entered into with Fast Capital, LLC (“Fast Capital”), and Fast Capital purchased a 10% convertible promissory note (the “Fast Capital Note”) from the Company in the aggregate principal amount of $115,000. The Fast Capital Note has an original issue discount of $10,000, resulting in gross proceeds to the Company of $105,000. Pursuant to the SPA, the Company agreed to reimburse Fast Capital for certain fees in connection with entry into the SPA and the issuance of the Fast Capital Note. The SPA contains certain covenants and customary representations and warranties by the Company and Fast Capital typically contained in such documents.

 

The maturity date of the Fast Capital Note was January 30, 2024. The Fast Capital Note bears interest at a rate of 10% per annum, and a default interest of 24% per annum. Interest is payable in shares of Company common stock.

 

As of March 31, 2026, the balancing remaining under the Fast Capital Note is $8,784, with accrued interest of $35,000.

 

 

THREE MILE CREEK

 

On July 10, 2025, the Company borrowed funds from Three Mile Creek Future LLC (“TMCF”) and issued a Promissory Note (the “TMCF Note”) in the principal amount of 1.7 Bitcoin and a Pre-Funded Common Stock Purchase Warrant (the “Warrant”), which entitles TMCF to subscribe for and purchase from the Company up to 77,704,407 shares of the Company’s common stock, each executed on July 16, 2025. These warrants were valued at $77,704.

 

The principal balance of the TMCF Note was due on January 10, 2026. The TMCF Note bears no interest and can be pre-paid by the Company any time without penalty. To secure the payment and performance of all obligations under the TMCF Note, the Company granted to TMCF a continuing security interest in all assets of the Company (the “Collateral”). Upon event of default, the unpaid principal balance of the TMCF Note will immediately become due and payable, and TMCF will have all rights and remedies available to it under the Nevada Uniform Commercial Code, including the right to take possession of the Collateral and to sell or otherwise dispose of it. AJB Capital Investments LLC, which holds a first priority security interest in the Collateral, has consented to the creation of the TMCF security interest in the Collateral and agreed to subordinate its lien to TMCF’s security interest.

 

The Warrant entitles TMCF to subscribe for and purchase from the Company up to 77,704,407 shares of the Company’s common stock any time prior to July 10, 2030. The aggregate exercise price of the TMCF Warrant was pre-funded to the Company. Consequently, TMCF need not pay any additional consideration to exercise the Warrant, other than a nominal exercise price of $0.03 per share.

 

As of March 31, 2026, the outstanding balance of the Three Mile Creek note is $188,552.

 

PROMISSORY NOTES

 

Beginning on August 13, 2025, the Company executed subscription agreements with accredited investors: Eksa Holdings LLC, Practivist Investors LLC, Richard G Averitt, Robert Nail, and Ryan Crownholm (each, an “Investor” and collectively, the “Investors”), in which the Company issued an aggregate of 65,043,533 shares of the Company’s common stock. These shares were valued at $221,441. In addition, the Investors purchased, and the Company issued Convertible Promissory Notes amounting to $1,010,780 (each, a “Note” and collectively, the “Notes”) with the aggregate principal amount of 3 Bitcoin (“BTC”), 47.07 Ethereum (“ETH”), 110,505 XRP (“XRP”), 733.83 Avalanche (“AVAX” and together with BTC, ETH and XRP, the “Tokens”), and $100,000 U.S. Dollars (“USD”).

 

The Notes bear no interest and mature six months from the date of issuance of each Note (the “Maturity Date”), unless earlier converted or repaid in accordance with its terms.

 

On the Maturity Date, at each Investor’s election, the Notes are either: (a) converted into a number of shares equal to 135% of the principal amount of each Note divided by the cash value of one share of Common Stock, as determined by the average close price for the prior 10 trading days calculated on the Maturity Date; or (b) (i) if Investor contributes USD, repaid in BTC, in an amount equal to the BTC market value of the principal amount of the Note on the date the Company purchases BTC, or (ii) if Investor contributes Tokens, repaid in the same Token, in the quantity contributed. In case an Investor fails to make a conversion election, the principal amount of each Note shall convert into shares of Common Stock.

 

An Investor may request full repayment of a Note at any time prior to the Maturity Date. If Investor contributes USD, the Note will be repaid in BTC, in an amount equal to 90% of the BTC market value of the principal amount of the Note on the date the Company purchases BTC. If Investor contributes Tokens, the Note will be repaid in the same Token, in an amount equal to 90% of the quantity of contributed Token.

 

The Notes contain customary representations, warranties, and covenants of the Company, as well as standard events of default.

 

Pursuant to the Subscription Agreements, the Company issued to each Investor a number of shares of Common Stock equal to 5% of the principal amount of the Note issued to such Investor, divided by a share price based on the volume-weighted average price over the 10 trading days preceding the date of the Note.

 

Subsequent to the initial subscription agreements, some convertible promissory notes were repaid or converted to standard promissory notes with the issuance of consideration listed in the original convertible promissory note.

 

As of March 31, 2026, only the Averitt note, in the amount of $38,772, is still a convertible promissory note. The other notes have either been repaid or reissued as standard promissory notes with the issuance of consideration listed in the original convertible promissory note.

 

Notes Payable -Other

 

SBA Loans

 

● On June 10, 2020, the Company received a loan from the Small Business Administration of $12,100 (the “2020 SBA Loan”). The 2020 SBA Loan bears interest at 3.75% per annum and is payable over 30 years with all payments of principal and interest deferred for the first 12 months.

 

● On February 2, 2021, the Company received a loan from the Small Business Administration of $18,265 (the “2021 SBA Loan”). The 2021 SBA Loan bears interest at 1% per annum and is payable over 5 years with all payments of principal and interest deferred for the first 10 months.

 

As of March 31, 2026 the total due on the SBA loans amounted to $11,799.