Note 6 – Convertible Debt

On July 16 and July 18, 2025, the Company entered into a series of convertible promissory notes with a group of investors for the aggregate purchase price of $4,000,000 (the “Notes”). The Notes are payable three months from the date of issuance, with an aggregate face value of $5,000,000, reflecting a 20% original issue discount (“OID”). The Company has the option to extend the maturity date for up to three additional one-month periods. In the event of any such extension, the OID shall increase to 25%, 30%, and 35% for the first, second, and third extension periods, respectively. Further, upon the occurrence of an Event of Default, as that term is defined in the Notes, the Notes shall be convertible at the option of the holders into shares of the Common stock of the Company at a price equal to 80% of the lowest closing sale price of the Company’s common stock as reported on the Nasdaq Global Market on any trading day during the five (5) trading days prior to the respective conversion date. The Company also recorded debt issuance cost of $320,000 to be amortized as interest expense over the term of the loan.

In accordance with ASU 2020-06, the Company accounts for the convertible notes as a single liability instrument. The notes are recorded at amortized cost, and interest expense is recognized using the effective interest method.

During the year ended December 31, 2025, the Company exercised the first three available extensions, thereby increasing the OID to 35%. On January 21, 2026, the Company and the holders entered into a Convertible Promissory Note Extension agreement (the “Extension”), which further extended the maturity date of the Notes to January 28, 2026 in exchange for an additional 5% OID, thereby increasing the OID to 40% and the aggregate face value of the Notes to $6,666,667. In January 2026, the Company repaid the full outstanding balance of $6,666,667 upon maturity, and the Notes were terminated.

The following table summarizes the activity related to the Notes during the six months ended June 30, 2026:

For the three and six months ended June 30, 2026, the Company incurred total interest expense of $0 and $725,601, respectively, related to the Notes, which consists of $714,601 from the accretion of OID and $11,000 from the amortization of debt issuance costs.