RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 9 — RELATED PARTY TRANSACTIONS
As part of the employment agreement with its CEO, the Company provided a $1,000,000 signing bonus in 2012, which has not been paid and is recorded in accrued compensation on the condensed consolidated balance sheets, along with unpaid base salary of $1,625,000 in aggregate attributable for the period from 2012 through 2018. Any unpaid and accrued compensation due to the CEO under his employment agreement will accrue interest on the principal amount at a rate of 10% per annum from the date of his employment agreement until it is paid. Even though the employment agreement expired and has not been renewed, the Company has an obligation under the agreement to continue to accrue interest on the unpaid balance.
As of June 30, 2026 and December 31, 2025, the Company had accrued $2,625,000 of compensation as accrued compensation and has balances of $1,496,476 and $1,366,305, respectively, in accrued interest – related party in current liabilities on its condensed consolidated balance sheets, related to the CEO’s employment agreement. Amounts owed under this arrangement are payable on demand.
The Company recorded interest expense related to the accrued compensation in the condensed consolidated statements of operations amounting to $65,445 for the three months ended June 30, 2026 and 2025, and $130,171 for the six months ended June 30, 2026 and 2025. During the six months ended June 30, 2026 and 2025, the Company did not make cash compensation or interest payments in connection with the accrued compensation to the CEO.
On May 13, 2025, the Company entered into a one-year consulting agreement with Hilarie Bass, a director, with an effective date of January 1, 2025, pursuant to which Ms. Bass will provide commercial litigation advice and litigation consulting services to the Company. As compensation for these services the Company will pay Ms. Bass $100,000 payable in four quarterly installments of $25,000 each. On April 29, 2026, the Company and Ms. Bass agreed to extend this agreement pursuant to its terms for a one-year period and it will renew automatically annually, unless one of the parties provides written notice of non-renewal prior to the end of the then-current period. The Company made payments in the amount of $25,000 during the three months ended June 30, 2026 and 2025, and $25,000 and $50,000 during the six months ended June 30, 2026 and 2025, respectively, related to this consulting agreement with Ms. Bass.
The Company entered into several DE LLC Notes with an entity wholly owned by its CEO and into three Mock Notes with its CEO’s brother. See Note 6 for further discussion.
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