v3.26.1
Related Party Transactions
 6 Months Ended
Jun. 30, 2026
Related Party Transactions [Abstract]  
Related Party Transactions

Note 10 – Related Party Transactions

 

The related parties that had material transactions for the six months ended June 30, 2026 and 2025, consist of the following: 

Related Party   Nature of Relationship to the Company
A   An Ohio Corporation - a significant shareholder
B   Owner of A and our Chairman of the Board
C   A California Corporation owned by a related party D
D   Significant shareholder and our Chief Technology Officer through March 31, 2026
E   Former Director and Chief Executive Officer of GEVI Insurance Holdings Inc.
F   A Delaware limited liability company controlled by a Director and significant shareholder
G   A company controlled by our Chief Financial Officer

 

As of June 30, 2026 and December 31, 2025, amounts owing to related parties consists as follows:

             
   June 30,   December 31,    
Related Party  2026   2025   Nature of transaction
A  $300   $300   Operating expenses paid on behalf of the Company
F   –    167,671   Accrued interest related to convertible note related party
G   4,900    –   Consulting fees
   $5,200   $167,971    

 

For the three and six months ended June 30, 2026 and 2025, expenses to related parties and their nature consists of:

   Three Months Ended       
   June 30       
Related Party  2026   2025   Nature of transaction  Financial Statement Line Item
A  $–   $25,300   Payment of operating expenses on behalf of the Company  Due to related party
A  $–   $25,000   Repayment of loan  Due to related party
C  $–   $5,600   Cash paid for consulting fees  Professional fees - related party
D  $–   $35,000   Cash paid for royalty and sales commissions  Cost of revenue - related party
D  $30,000   $–   Cash paid for consulting fees  Professional fees - related party
F  $–   $2,511,855   69,007 Series C preferred stock for services  Financing expense
G  $13,150   $–   Professional service - accounting  Professional fees - related party

 

   Six Months Ended       
   June 30       
Related Party  2026   2025   Nature of transaction  Financial Statement Line Item
A  $–   $2,103,600   150,000 Series C preferred stock for consulting fee  Professional fees - related party
A  $–   $25,300   Payment of operating expenses on behalf of the Company  Operating expenses
A  $–   $25,000   Repayment of loan  Due to related party
C  $–   $21,600   Cash paid for consulting fees  Professional fees - related party
C  $–   $4,000   Cash paid for consulting and advisory fees  Cost of revenue - related party
D  $–   $91,290   Cash paid for royalty and sales commissions  Cost of revenue - related party
D  $30,000   $–   Cash paid for consulting fees  Professional fees - related party
E  $–   $420,720   30,000 Series C preferred stock for management compensation  Management compensation
E  $–   $–   20,000 shares of Series C preferred stock for advisory fee  Professional fees - related party
F  $–   $2,511,855   69,007 Series C preferred stock for services  Financing expense
G  $5,505   $–   Edgar filing expense  General and administrative
G  $37,660   $–   Professional service - accounting  Professional fees - related party

 

Contributed Capital

 

In February 2026, the Company received payments from related party B, totaling $96,258 related to disgorgement of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company recognized these proceeds as a capital contribution and the amounts were recorded as an increase to additional paid-in capital on the unaudited interim consolidated balance sheets.

 

Convertible note – related party

 

The components of convertible notes as of June 30, 2026 and December 31, 2025, were as follows:

                          
          Effective   Stated         
   Principal      Interest   Interest   June 30,   December 31, 
Payment date  Amount   Maturity date  Rate   Rate   2026   2025 
February 2025  $2,222,000   April 28, 2026  16.25%   10%   $–   $2,000,000 
Total Convertible notes                  $–   $2,000,000 
Less: Unamortized debt discount                   –    (714,600)
                    –    1,285,400 
Less: Current portion                   –    (1,285,400)
Long-term portion                  $–   $– 

 

In February 2025, the Company entered into one (1) subscription agreement for convertible note ($2,000,000) and warrants (416,667 shares of common stock) with related party F. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, related party F could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio. On February 27, 2026, related party F extended their convertible promissory note until April 28, 2026. Pursuant to the extension, they charged a 1% amendment fee and agreed to release their security pledge against certain intangible assets of the Company. As a result, the principal amount became $2,222,000, including accrued interest of $200,000 and 1% fee of $22,000.

 

The Company evaluated the modification of terms under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension of the maturity dates did not result in a substantial change and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. Accordingly, no gain or loss on debt extinguishment was recorded.

 

During the three and six months ended June 30, 2026 and 2025, the Company recognized interest expense and amortization of debt discount as follows:

                    
   Three Months Ended   Six months ended 
   June 30,   June 30, 
   2026   2025   2026   2025 
Interest expense - related party  $17,046   $64,241   $68,246   $95,447 
Amortization of debt discount - related party  $10,516   $148,546   $736,600   $179,396 

 

Conversion

 

In April 2026, related party F converted a convertible note with accrued interest of $35,917 into 940,799 shares of common stock with a conversion price of $2.40.

 

As of June 30, 2026 and December 31, 2025, the Company recorded accrued interest of $0 and $167,671, respectively.