NOTE 8 – NOTES PAYABLE AND PROMISSORY NOTES

As of June 30, 2026 and December 31, 2025, the Company had the following outstanding debt instruments, which are recorded at their carrying value on the balance sheet:

The Company’s convertible notes generally include conversion features that allow the holder to convert the outstanding principal into shares of the Company’s common stock or preferred stock. Certain of these instruments contain variable conversion terms based on a discount to market prices, which resulted in the recognition of embedded derivative liabilities accounted for at fair value.

Convertible Note Conversions

During January 2026, a promissory note with a third-party investor in the principal and interest amount of $58,000 was converted into 134,884 shares of Series D.1 Preferred Stock, upon the Company filing a Certificate of Designation to create such series of preferred stock at a price of $0.43 per share. The Certificate of Designation for Series D.1 Preferred Stock was filed on January 30, 2026.

During April 2026, the principal amount of $65,000 on a promissory note with a third-party investor with an original principal of $495,000 was partially converted into 406,150 shares of Common Stock.

New Promissory and Convertible Note Issuances

On February 12, 2026, the Company issued a Secured Convertible Promissory Note to a third-party investor in the principal amount of $66,000. The principal accrues interest at a rate of 10% per annum and matures on February 12, 2027. The note included an original issue discount of $6,000, resulting in net proceeds of $60,000 to the Company. The note is convertible any time after six months from the issuance date at the option of holder at a conversion price equal to the lower of $1.00 or 90% of the lowest volume weighted average price (“VWAP”) for the ten prior trading days. The note is secured by all of the Company’s assets. At inception, the Company recorded a discount against the note payable in the amount of $66,000 and a day one financing loss of $4,834, representing the fair value of the embedded conversion feature (“ECF”) of $64,834, and the original issue discount of $6,000. The ECF did not meet the requirements for equity classification since it is settleable in a variable number of shares and was recorded as a derivative financial instrument at inception. The day one financing loss was recognized on the inception date and represents the excess of the fair value of the allocated components of the transaction over the proceeds received. The net carrying value of the note was $24,953 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On February 26, 2026, the Company entered into a short-term loan agreement with a third-party investor for a principal amount of $50,000, a one-time interest charge of $2,500, and a maturity date of March 6, 2026. The loan was repaid on March 3, 2026. At inception, the Company recorded a discount against the loan of $2,500. The net carrying value of the loan was $-0- and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On March 30, 2026, the Company entered into a second short-term loan agreement with the same third-party investor for a principal amount of $50,000, a one-time interest charge of $52,500, and a maturity date of April 13, 2026. The loan was subsequently repaid on April 16, 2026. At inception, the Company recorded a discount against the loan of $2,500. The net carrying value of the loan was $-0- and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On April 6, 2026, the Company issued a Convertible Promissory Note to a third-party investor with a stated principal amount of $82,500 and a one-time interest charge of $6,600 for total repayments of $89,100. The Company received net proceeds of $71,750 after original issue discount of $7,500 and fees of $3,250. The note does not bear interest in excess of the original issue discount and prepaid interest and is scheduled to mature on April 6, 2027, at which time all principal and prepaid interest is due. The note is convertible any time at the option of holder at a conversion price equal to the lower of $0.50 or 80% of the lowest volume weighted average price (“VWAP”) for the 15 prior trading days. In connection with the note, the Company also issued to the holder a five-year warrant to purchase 126,923 shares of Company common stock at an exercise price of $0.65 per share. At inception, the Company recorded a discount against the note payable in the amount of $89,100 and a day one financing loss of $13,115, representing the fair value of the derivative embedded conversion feature (“ECF”) of $60,750, cash discounts of $17,350, and the fair value of the warrant of $24,115. The discount is being amortized over the life of the note. The ECF did not meet the requirements for equity classification because it is settleable in a variable number of shares, and thus was recorded as a derivative financial instrument at inception. The day one financing loss was recognized on the inception date and represents the excess of the fair value of the components of the transaction over the proceeds received. The net carrying value of the note was $20,749 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On April 9, 2026, the Company issued a second Convertible Promissory Note to a separate third-party investor with a stated principal amount of $82,500 and a one-time interest charge of $6,600 for total repayments of $89,100. The Company received net proceeds of $71,750 after original issue discount of $7,500 and fees of $3,250. The note does not bear interest in excess of the original issue discount and prepaid interest and is scheduled to mature on April 9, 2027, at which time all principal and prepaid interest is due. The note is convertible any time at the option of holder at a conversion price equal to the lower of $0.50 or 80% of the lowest VWAP for the 15 prior trading days. In connection with the note, the Company also issued to the holder a five-year warrant to purchase 126,923 shares of Company common stock at an exercise price of $0.65 per share. At inception, the Company recorded a discount against the note payable in the amount of $89,100 and a day one financing loss of $21,971, representing the fair value of the derivative ECF of $70,875, cash discounts of $17,350, and the fair value of the warrant of $22,846. The discount is being amortized over the life of the note. The ECF did not meet the requirements for equity classification because it is settleable in a variable number of shares, and thus was recorded as a derivative financial instrument at inception. The day one financing loss was recognized on the inception date and represents the excess of the fair value of the components of the transaction over the proceeds received. The net carrying value of the note was $20,016 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On April 27, 2026, the Company issued a second Convertible Promissory Note to a separate third-party investor with a stated principal amount of $275,000 and a one-time interest charge of $22,000 for total repayments of $297,000. The Company received net proceeds of $226,000 after original issue discount of $25,000 and fees of $24,000. The note does not bear interest in excess of the original issue discount and prepaid interest and is scheduled to mature on April 27, 2027, at which time all principal and prepaid interest is due. The note is convertible any time at the option of holder at a conversion price equal to the lower of $0.50 or 80% of the lowest VWAP for the 15 prior trading days. In connection with the note, the Company also issued to the holder a five-year warrant to purchase 199,275 shares of Company common stock at an exercise price of $0.65 per share and 20,000 shares of Company common stock. At inception, the Company recorded a discount against the note payable in the amount of $297,000 and a day one financing loss of $232,877, representing the fair value of the derivative ECF of $400,466, cash discounts of $71,000, the fair value of the warrant of $51,811, and the fair value of the shares of $6,600. The discount is being amortized over the life of the note. The ECF did not meet the requirements for equity classification because it is settleable in a variable number of shares, and thus was recorded as a derivative financial instrument at inception. The day one financing loss was recognized on the inception date and represents the excess of the fair value of the components of the transaction over the proceeds received. The net carrying value of the note was $52,077 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On June 23, 2026, the Company entered into a short-term loan agreement with a third-party investor for a principal amount of $50,000, a one-time interest charge of $5,000, and a maturity date of July 7, 2026. The loan was repaid in two installments on June 29 and July 1, 2026. At inception, the Company recorded a discount against the loan of $5,000. The net carrying value of the loan was $27,692 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

On June 29, 2026, the Company issued a second Convertible Promissory Note to a separate third-party investor with a stated principal amount of $89,650 and a one-time interest charge of $7,172 for total repayments of $96,822. The Company received net proceeds of $75,000 after original issue discount of $8,150 and fees of $6,500. The note does not bear interest in excess of the original issue discount and prepaid interest and is scheduled to mature on June 29, 2027, at which time all principal and prepaid interest is due. The note is convertible any time at the option of holder at a conversion price equal to the lower of $0.50 or 80% of the lowest VWAP for the 15 prior trading days. In connection with the note, the Company also issued to the holder 25,000 shares of Company common stock. At inception, the Company recorded a discount against the note payable in the amount of $96,822 and a day one financing loss of $29,638, representing the fair value of the derivative ECF of $98,263, cash discounts of $2,822, and the fair value of the shares of $6,375. The discount is being amortized over the life of the note. The ECF did not meet the requirements for equity classification because it is settleable in a variable number of shares, and thus was recorded as a derivative financial instrument at inception. The day one financing loss was recognized on the inception date and represents the excess of the fair value of the components of the transaction over the proceeds received. The net carrying value of the note was $265 and $-0- as of June 30, 2026 and December 31, 2025, respectively.

Amortization of debt discounts in the three and six months ended June 30, 2026 and 2025, was as follows:

Interest expense on debt instruments for the three months ended June 30, 2026 and 2025, was $23,453 and $-0-, respectively, and $44,674 and $1,756 for the six months ended June 30, 2026 and 2025, respectively.

For additional information regarding the Company’s convertible notes and promissory notes, including detailed terms, valuation of embedded features, and prior period activity, see Note 10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.