NOTE 8 – DEBT

The components of notes payable are as follows:

For the six months ended June 30, 2026, and 2025, the Company recognized amortization of debt discount of $489,455 and $252,348, respectively. During the six months ended June 30, 2026  interests of $261,370 was recognized. The note including interest was repaid in June 2026.   

On May 22, 2026, the Company entered into a short-term financing arrangement pursuant to which it issued promissory notes in an aggregate principal amount of $1.1 million for cash proceeds of $1.0 million, reflecting an original issue discount of $0.1 million. The notes had an initial term of two months and the proceeds were used for working capital requirements.

In May 2026, the Company entered into a $88,428 (RMB 600,000) credit facility with Bank of Jiangsu, available through May 21, 2027. Borrowings under the facility are subject to the bank’s approval, with interest rates and other terms determined at the time of each individual borrowing.

On June 8, 2026, the Company fully settled its $6.0 million senior promissory notes. Of the outstanding principal, $3.0 million was settled through the issuance of 3.0 million shares of common stock at $1.00 per share, and the remaining $3.0 million was repaid in cash, together with accrued interest. Following the transaction, no amounts remained outstanding under the senior promissory notes.