Note 5 — Borrowings

Line of Credit

The Company has a line of credit with Regions Bank that allows for advances up to $150,000 with interest at the Prime Rate plus 4.75% with a floor of 4.75% and no maturity date. On  March 31, 2026, the outstanding balance on the line of credit was $0 at a prime rate of 6.75% plus 4.75%, or 11.50%. On  December 31, 2025, the outstanding balance on the line of credit was $0 at a prime rate of 7.00% plus 4.75%, or 11.75%. The line of credit is collateralized by Company assets. The interest expense incurred for the line of credit was $0 and $4,494 for the three months ended March 31, 2026 and 2025, respectively.

Convertible Note 2026

On January 8, 2026, the Company consummated the Initial Closing under the SPA 2, pursuant to which it issued to the Investors a Convertible Note 2026 in the principal amount of $11,000,000 (the “Initial Note”), together with a previously issued Token Right (as defined in the Initial 8-K), for an aggregate purchase price of $9,900,000.

On July 31, 2026, the Company and the accredited investor entered into a certain waiver (the “Waiver”), waiving certain Events of Default (as defined in the Convertible Note 2026) with regard to the Company's failure to timely pay interest under the Convertible Note 2026, through July 31, 2026, and the Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Pursuant to the terms of the Waiver, the holder of the Convertible Note 2026 waived its rights and remedies arising solely from the specified Events of Default, including, but not limited to, the right to impose default penalties, charge default interest, and accelerate amounts due under the Convertible Note 2026. All other terms of the Convertible Note 2026 remained in full force and effect.

The Initial Note is convertible into shares of the Company’s common stock, par value $0.0001 per share (the Common Stock), at an initial conversion price equal to $0.8347, subject to adjustment as provided in the Initial Note, provided that in no event may the conversion price be less than the floor price of $0.778 (the “Floor Price”). The Initial Note bears interest at a rate of ten percent (10%) per annum that is payable monthly in arrears commencing on February 1, 2026, matures twenty-four (24) months from the date of issuance and contains customary covenants and events of default (upon which the interest rate will increase to a rate of nineteen percent (19%) per annum) as described in the Initial Note.

The Company has agreed that, no later than thirty calendar days after the date of the Initial Closing, it will seek approval of the Company’s stockholders, either at a special meeting or by written consent, to adjust the Floor Price of the Initial Note and all other Notes pursuant to the terms of the Initial Note.  On January 23, 2026 the noteholder requested that this initial approval be delayed. As of March 31, 2026 there was no change to this request. 

The Initial Note ranks pari passu with all other Notes and the February Note (as defined in the Purchase Agreement) and senior to all other existing and future indebtedness of the Company and its subsidiaries (other than Permitted Indebtedness secured by Permitted Liens (both as defined in the Purchase Agreement and/or Notes)) and is secured by (i) a first-priority security interest in substantially all of the Company’s and its subsidiaries’ assets purchased or acquired with the proceeds of the Initial Closing pursuant to a Security and Pledge Agreement, Guaranty and an Account Control Agreement (each, as defined below) and (ii) second priority security interest in the remaining assets of the Company and its subsidiaries (subject to the first lien of the holder(s) of the February Note).

In connection with the Initial Closing on January 8, 2026, as contemplated under the Purchase Agreement: (i) the Company and each of its subsidiaries (each, a “Grantor”), and a collateral agent (the “Collateral Agent”) for the benefit of the holders of Obligations (as defined in the Security Agreement), entered into a Security and Pledge Agreement (the “Security Agreement”) with respect to the Notes, pursuant to which each Grantor granted the Collateral Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), a security interest in such Grantor’s right, title and interest in and to all or substantially all of its properties and assets, or in which or to which such Grantor has any rights, whether then owned or thereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “Collateral”); (ii) each subsidiary of the Company also entered into a guarantee agreement (the “Subsidiary Guaranty”) whereby each Subsidiary of the Company guaranteed to the Investors the prompt and full payment and performance of the obligations of the Company and each Subsidiary under the Purchase Agreement and other Transaction Documents; and (iii) the Company and the Collateral Agent entered into an Intellectual Property Security Agreement (“Intellectual Property Security Agreement”), pursuant to which the Company granted to the Collateral Agent a lien and security interest in certain intellectual property of the Company.

Amendment to Purchase Agreement 

On March 24, 2026, the Company and Investors entered into an Amendment (the “SPA Amendment”) to amend the SPA 2 and provide that the net proceeds to the Company from any further equity line of credit, equity purchase facility, or at-the-market offering shall be allocated as follows: (i) until such time as the Company has paid to its placement agent and financial advisor (together, the “Advisors”) an aggregate of $751,221 in deferred fees (1) 20% to pay any outstanding deferred fees due to the Advisors, (2) 40% to acquire Note Purchased Crypto (or digital assets) (as defined in the SPA 2) as a treasury asset for the Company’s consolidated balance sheet, and (3) the remaining 40% for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), and (ii) thereafter (1) 50% of the net proceeds shall be used to acquire Note Purchased Crypto as a treasury asset for the Company’s consolidated balance sheet and (2) the remaining 50% of the net proceeds shall be used for general corporate purposes, working capital, acquisitions and other strategic transactions (including, but not limited to, developing next-generation data center infrastructure for AI computing), including payment of an additional $77,000 in deferred fees to the Advisors due and payable not earlier than December 31, 2026.

In addition, the Company agreed to reimburse the Buyers and the Advisors for their costs and expenses, including legal fees, in an aggregate amount of up to $65,000, payable from the net proceeds from the sale of common stock of the Company pursuant to any equity line of credit, equity purchase facility or at-the-market offering.

Except as amended by the SPA Amendment, all other terms of the SPA 2 including the exhibits thereto, remain unchanged and are in full force and effect.

Token Rights

In connection with the SPA 2 entered into on November 12, 2025, the Company issued the TRA to the investors. Pursuant to the TRA, the holders are entitled, upon exercise and for no additional consideration, to receive certain digital assets acquired by the Company using specified financing proceeds. The holders are entitled to receive (i) 50% of the digital assets purchased by the Company using the net proceeds from each closing under the Securities Purchase Agreement and (ii) 25% of the digital assets purchased using the net proceeds from certain other financing transactions, each as defined in the agreement.

The TRA becomes exercisable beginning 60 days following issuance and remains exercisable through the tenth anniversary of the issuance date. The agreement provides for settlement through the delivery of specified quantities of digital assets rather than a fixed dollar amount.

Upon the initial closing of the Convertible Note 2026 on January 8, 2026, the Company recorded an initial TRA liability of approximately $3.75 million, representing the investor's contractual right to receive 50% of the digital assets acquired from the proceeds designated for the purchase of Note Purchased Crypto.

On March 24, 2026, the Company and Investors entered into Amendment No. 1 to the TRA (the “Token Right Amendment”), under which the Investor will be entitled to receive upon an aggregate number of Right Tokens equal to the sum of (i) fifty percent (50%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of each closing under the SPA and (ii) fifty six and one quarter percent (56.25%) of any and all Tokens purchased by the Company on and after the Issuance Date using the net proceeds of any Other Financing (as defined in the Token Right).

As of March 31, 2026, approximately 5.3 million in rights to digital assets were subject to the TRA, and the related derivative liability was approximately $5.3 million.

Except as amended by the Token Right Amendment, all other terms of the Token Right remain unchanged and are in full force and effect.

Convertible Note 2025

During the three months ended March 31, 2026, the holder converted the remaining aggregate principal balance of $5,818,000 of the Convertible Note 2025 into shares of the Company's common stock pursuant to the optional conversion provisions contained in the note agreement. The conversions occurred on January 29, 2026, January 30, 2026, and February 5, 2026. In connection with the conversions, the Company issued an aggregate of approximately 104,321 shares of common stock.

Prior to each conversion, the Company remeasured the Convertible Note 2025 to fair value in accordance with its fair value option election. As a result of the remeasurement, the Company recognized an increase in the fair value of the note liability of $664,902, which was recorded within the change in fair value of convertible note and warrants in the condensed consolidated statements of operations. Following remeasurement, the carrying amount of the Convertible Note 2025 was reclassified to stockholders' equity upon conversion, and no gain or loss was recognized upon settlement of the note through the issuance of common stock.

On February 4, 2025, the Company and an Investor entered into the SPA 1, pursuant to which the Company issued to the Investor on such date: (i) a Convertible Note 2025 in the original principal amount of $5,500,000 which matures on February 4, 2027 (the “Initial Note”); and (ii) sixteen (16) incremental warrants, each to purchase additional Notes in an original principal amount up to $2,500,000 at an exercise price of $2,256,250, in substantially the same form as the Initial Note (the “Incremental Notes” and together with the Initial Note, the “Notes”). The purchase price paid by the Investor under the SPA 1 for the Initial Note and Incremental Warrants was $4,963,750.

The Initial Note accrues interest at a rate of 12% per annum, calculated on the basis of a 360-day year. Interest is payable quarterly in arrears, meaning that payments are due at the end of each calendar quarter for interest accrued during that quarter. The interest expense incurred for the Initial Note was $405,041 and $102,667 included as a component of the change in fair market value for the three months ended March 31, 2026 and 2025, respectively.

In connection with the closing of the Convertible Note 2025, the Company entered into a Registration Rights Agreement dated February 4, 2025, obligating the Company to file and maintain the effectiveness of one or more registration statements with the SEC covering the resale of the shares of common stock issuable upon conversion of the Notes and related instruments.

The Notes may be prepaid by the Company, in whole or in part, at its option with at least 30 calendar days’ notice to the holder, provided no Event of Default has occurred and is continuing. Voluntary prepayments are subject to a redemption premium equal to 120% of the outstanding principal, accrued interest, and any applicable charges being redeemed. The Company may not issue more than one redemption notice within any 20-trading-day period, and such notices are irrevocable once issued.

Certain mandatory redemptions, including those triggered by Events of Default, Bankruptcy Events, or Change of Control transactions, are contractually deemed voluntary prepayments and are also subject to the 120% redemption premium. The redemption price in such scenarios is the greater of (i) 120% of the outstanding amount or (ii) a formula based on the conversion rate and the highest closing price of the Company’s common stock during a specified period.

Other redemptions, such as those triggered by subsequent placements or asset sales, are payable at 100% of the applicable amount and are not subject to a premium.

Cash Advance Agreements

On February 5, 2025, the Company paid off their Standard Merchant Cash Advance Agreement (the “Cash Advance”) with Cedar Advance, LLC. (“Cedar”) in the amount of $354,450, resulting in a loss on extinguishment of debt of $83,310. The Company also paid off their other Standard Merchant Cash Advance Agreement (the “Arin Cash Advance Agreement”) with Arin Funding LLC (“Arin”) in the amount of $340,421, resulting in a loss on extinguishment of debt of $68,615. The amortization of financing fees incurred for MCA loans were $63,160 for the three months ended March 31, 2025.

Notes Payable-Senior Secured Promissory Notes

During the three months ended March 31, 2025, the Company repaid in full all outstanding senior secured promissory notes issued in 2024 to an accredited investor. On February 5, 2025, in connection with the execution of the SPA, the Company paid the remaining principal and accrued interest on the third and final outstanding note, thereby fully extinguishing the Company’s debt obligations to the investor under the 2024 note issuances.

In addition, the accredited investor elected to convert an aggregate principal and interest amount of $483,751 of the notes into 173 shares of the Company’s common stock in accordance with the terms of the applicable note agreements. The Company also settled all vested and outstanding warrants previously held by the investor. Two of the three warrants were exercised for a total of 110 shares of common stock. The remaining warrant was repurchased by the Company for $379,083 in cash on January 24, 2025, resulting in the elimination of all vested warrants held by the investor as of March 31, 2025.

On January 8, 2025, the Company and the accredited investor entered into that certain Waiver, waiving the Event of Default (as defined) under these senior secured promissory notes. The waiver included, among other provisions, waiving the rights to all default penalties, default interest, the acceleration of any amounts and waiving the restriction for the Company to enter into a variable rate transaction, of which the consummation could be considered an event of default, provided the proceeds from such financing are used to repay, in full, the notes described above.

On January 22, 2025, the Company and the Holder signed an amendment No. 1 to the Waiver. Pursuant to the Amendment, the Company shall pay 100% of any cash proceeds raised by the Company from the sale of securities pursuant to its Registration Statement on Form S-3 filed on or around November 22, 2024 to the Holder first towards the repayment of the Redemption Price until it is paid in full, and after that towards the repayment of the Notes. The Amendment also provides that, if the Redemption Agreement becomes null and void pursuant to the terms of the Redemption Agreement, then all Proceeds previously paid by the Company to the Holder pursuant to the Redemption Agreement shall instead be applied towards the repayment of the Notes.

The interest expense incurred for the senior secured promissory note was $23,798 for the three months ended March 31, 2025.

Notes Payable-Promissory Note

On September 27, 2024, the Company entered into a promissory note payable whereby the Company borrowed $200,000 bearing interest at 12.5% per annum. The note was payable in three monthly installments of $75,000. The proceeds of the note were used to pay down the senior secured promissory note entered into in February 2024. The Company paid off the note of $148,725 in February 2025. This note was fully repaid in February 2025. The interest expense incurred for the promissory note was $1,276 for the three months ended March 31, 2025.

Acquisition Settlement Agreement

In October 2024, the Company entered into an acquisition settlement agreement with the former owner of an acquired business. Under the terms of the agreement, the Company agreed to pay $1.0 million in equal installments of $11,905 per month over seven years, beginning November 1, 2024.

Acquisition Agreement

On February 11, 2026, the Company acquired a 49% membership interest in La Rosa Realty Lakeland LLC for aggregate cash consideration of $350,000, consisting of (i) an initial payment of $150,000 payable within ten (10) days following the closing, and (ii) installment payments totaling $200,000, payable in twelve (12) equal monthly installments of $16,667 commencing on March 1, 2026. 

The note is secured pursuant to a Pledge Agreement under which the Company pledged a 28% membership interest in La Rosa Realty Lakeland LLC as collateral. In the event of default, including the failure to make required installment payments, the noteholder may exercise rights against the pledged membership interest following a 15-day cure period.

Economic Injury Disaster Loans

During 2024, the Company acquired franchises that had outstanding Economic Injury Disaster Loans (the “EIDL Loans”) in the aggregate of $147,100. The Company acquired the EIDL Loans which have terms similar to the Company’s existing EIDL loans. The EIDL Loans mature in 2050 and bear interest at a rate of 3.75% per annum. The interest expense incurred for the EIDL loans were $4,716 and $1,412 for the three months ended March 31, 2026 and 2025, respectively.

Future maturities of EIDL term debt as of  March 31, 2026, were as follows:

Total Notes Payable as of  March 31, 2026 and  December 31, 2025 were as follows: