Note 5 – Debt

The following represents a summary of the Company’s debt (notes payable – related parties and third party debt for notes payable) including those owed on vehicles, including key terms, and outstanding balances at June 30, 2026 and December 31, 2025, respectively.

Notes Payable – Related Parties

The following is a summary of the Company’s notes payable – related parties at June 30, 2026 and December 31, 2025:

Summary of Notes Payable

The following is a detail of the Company’s advances payable – related parties terms and history of each advance at June 30, 2026 and December 31, 2025:

Schedule of Advances Payable Related Parties

During the six months ended June 30, 2026, the Company extinguished its obligations under a promissory note dated March 7, 2024 issued in favor of Michael D. Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and a significant stockholder (the “2024 Note”). Pursuant to a Stock Purchase Agreement dated June 16, 2026, the Company agreed to issue 260,000 shares of common stock at $0.386 per share, for an aggregate value of $100,360, and, in lieu of cash payment for the shares, Mr. Farkas cancelled the $100,360 outstanding under the 2024 Note. The $100,360 obligation was reclassified from notes payable – related parties to stock payable – related parties as of June 30, 2026 pending issuance of the shares, and the 2024 Note was terminated.

Notes Payable

The following represents the terms and balances of the Company’s notes payable June 30, 2026 and December 31, 2025, respectively:

Schedule of Terms of Notes Payable 

Loans #16, #20, #30-31 and #41-47 represent merchant cash advance (“MCA”) agreements entered into by the Company. Under these arrangements, the Company receives a specified gross advance amount, net of origination fees, discounts, and other transaction costs, in exchange for a fixed repayment obligation that typically exceeds the net funds received.

Repayment terms generally range from 21 to 78 weeks and are structured as daily or weekly fixed remittances. The Company accounts for these arrangements as debt in accordance with ASC 470, recognizing the full repayment obligation as a liability, with related issuance costs amortized over the term of the loan.

To manage liquidity and meet near-term obligations, the Company has, in several instances, refinanced existing MCA loans by entering into new MCA agreements with the same or alternative lenders. These refinancing arrangements often involve:

While refinancing may provide short-term liquidity relief, it often results in higher cumulative borrowing costs due to upfront fees and the compounding effect of new obligations. These refinancings are typically executed close to the maturity of the original MCA or earlier if cash flow pressures arise.

The Company utilizes MCA financing primarily to support working capital and general operations. Given the short-term nature, fee structure, and recurring refinancing activity, these MCA obligations are classified as short-term debt. The Company continuously evaluates its funding options to manage cash flow and covenant compliance under these agreements.

Loan 16, an outstanding merchant cash advance obligation with a balance of $1,600,858 as of December 31, 2025, was repaid in full during the six months ended June 30, 2026, for a total payoff amount of $1,600,858. As a result, the Company’s obligations under this facility have been satisfied and any related security interest has been released.

During the six months ended June 30, 2026, we received confirmation from the lender that amounts previously recorded as interest and fees on Loans #30 and 31 had instead been applied to reduce the outstanding principal balance. As a result, we adjusted the carrying balance of these loans to $0 on the balance sheet.

Loan #28

In December 2024, the Company executed a loan for $5,000,100 with Cohen Global Energy, LLC. Cohen Global Energy is an unrelated third party that holds 50% of Next/Ingle Holdings, LLC. The Company owns the other 50% of Next/Ingle Holdings, LLC. Notwithstanding the split of ownership, the Company retains unilateral governing control over the entity, as outlined in the executed operating agreement. Next/Ingle Holdings LLC is a controlled holding company which has been consolidated into the Company, and shows a non-controlling interest for the 50% not owned. The loan was due March 31, 2025. On June 26, 2025, the note was extended until September 1, 2025. On September 1, 2025 the note was extended until October 1, 2025. On October 1, 2025, the note was extended to November 1, 2025. In consideration of the aforementioned extensions, the Company paid Cohen Global Energy, LLC $60,000 a month, for a total of $420,000, in the year ended December 31, 2025. The Company is currently negotiating an additional extension of the due date, and as of the date of this filing the note is in default.

This note held no issuance discount or interest rate.

Loan #32

In July 2025, the Company entered into an unsecured note bearing interest at a rate of 18% per annum with a principal amount of $2,000,000 and a contractual term of 12 months. The note was issued with an OID of $100,000, resulting in net cash proceeds of $1,900,000 at inception. The Company also issued 126,373 shares of common stock with the note, and the Company accounted for the issuance of the shares and the note using the relative fair value method. The total relative fair value was allocated as follows: $1,892,705 to the debt instrument (90%) and $207,295 to the shares of stock (10%), resulting in the recording of an additional $207,295 in debt discount.

The Company is required to make monthly payments in the amount of $100,000. During the six months ended June 30, 2026, the Company converted the remaining balance of $1,375,000 into shares of common stock, extinguishing the note in full, and amortized $140,289 in debt discount through the conversion date. As of June 30, 2026, no balance remained outstanding under this note.

Loan #37

In November 2025, the Company entered into a secured convertible note pursuant to a Securities Purchase Agreement in the principal amount of $2,950,000. The note was issued at an 18% original issue discount, resulting in gross proceeds of $2,500,000.

The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.69 per share. The noteholder was also issued a warrant to purchase 750,000 shares of common stock at an exercise price of $5.00 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as of December 31, 2025 as follows: $2,135,583 to the debt instrument (72%) and $814,417 to the warrants (28%), resulting in the recording of an additional $814,417 in debt discount.

As of June 30, 2026, there was a $200,200 remaining balance on this note.

Loan #40

In conjunction with Loan #37, the Company issued a note in the principal amount of $295,000 and warrants to purchase 75,000 shares of common stock at an exercise price of $5.00 as a due diligence fee. The note bears no stated interest and matures 12 months from issuance. It is convertible into shares of the Company’s common stock at a fixed conversion price of $1.69 per share. The Company accounted for the issuance of the warrants and the note using the relative fair value method. The total relative fair value was allocated as of December 31, 2025 as follows: $213,558 to the debt instrument (72%) and $81,442 to the warrants (28%), resulting in the recording of $81,442 in debt discount.

As of June 30, 2026, there was a $91,000 remaining balance on this note.

Loan #41

On March 9, 2026, the Company entered into a Future Receivables Sale and Purchase Agreement (the “Receivables Agreement”), dated as of March 5, 2026, with a third-party funder (the “Purchaser”), pursuant to which the Company agreed to sell 6.87% of its future receipts until a purchased amount of $2,772,000 has been remitted to the Purchaser. The Company received $2,100,000, less fees of $105,035, and agreed to deliver $231,000 on a biweekly basis. The Company’s obligations are secured by a first-priority lien on substantially all of the Company’s accounts, accounts receivable and inventory. Consistent with the Company’s other merchant cash advance arrangements, the Company accounts for the Receivables Agreement as debt in accordance with ASC 470, recording the $2,772,000 repayment obligation net of a $777,035 debt discount that is amortized to interest expense over the term. Upon the occurrence of an event of default, the entire unpaid portion of the purchased amount becomes immediately due and bears simple interest at 9% per annum until paid in full. Michael D. Farkas, the Company’s Chief Executive Officer, Chairman of the Board of Directors and a significant stockholder, personally guaranteed the Company’s obligations under the Receivables Agreement. As of June 30, 2026, the outstanding balance was $664,988.

Notes Payable – Vehicles (Loan # 29)

The following is a summary of the Company’s notes payable for its vehicles at June 30, 2026 and December 31, 2025, respectively:

Summary of Notes Payable - Vehicles

The following is a detail of the Company’s notes payable for its vehicles at June 30, 2026 and December 31, 2025, respectively:

Schedule of Detailed Company’s Notes Payable

Debt Maturities

The following represents future maturities of the Company’s various debt arrangements as follows:

Schedule of Maturities of Long Term Debt