NOTE 10 – CONVERTIBLE NOTE PAYABLE

On June 1, 2026, the Company issued a convertible promissory note (the “Note”) in the original principal amount of $275,000 to an unrelated third party. The Note bore interest at 1.0% per annum, calculated on the basis of a 365-day year and the actual number of days elapsed, and was scheduled to mature on July 1, 2026. The Company was permitted to prepay the Note in whole or in part at any time without premium or penalty.

At any time prior to payment in full, the holder could elect to convert all or any portion of the outstanding principal balance, together with all accrued and unpaid interest (the “Conversion Amount”), into shares of the Company’s common stock, and the Company could elect to convert the entire outstanding balance into shares of common stock upon written notice to the holder. The conversion price was equal to the lowest Nasdaq Official Closing Price of the Company’s common stock on any of the three trading days immediately preceding the conversion date. The number of shares issuable upon conversion equaled the Conversion Amount divided by the conversion price, with no fractional shares issued and the value of any fractional share paid in cash. Shares issuable upon conversion were not registered under the Securities Act and were issued as restricted securities.

The Company evaluated the conversion feature under ASC 815, Derivatives and Hedging. Because the Note required physical settlement of the conversion feature through the issuance of unregistered, restricted shares of the Company's common stock and did not provide for cash or net settlement, the Company concluded that the conversion feature did not meet the definition of a derivative and was not required to be bifurcated from the Note.

On June 30, 2026, the holder converted the entire outstanding balance of the Note. The Conversion Amount consisted of $275,000 of principal and $226 of accrued and unpaid interest, totaling $275,226, which converted at a conversion price of $11.67 per share into 23,584 shares of the Company’s common stock. Upon conversion, the Note was deemed satisfied and discharged in full, and no amounts remained outstanding under the Note as of June 30, 2026.

For the three and six months ended June 30, 2026, the Company recognized interest expense of $226 with respect to the Note. The conversion of the Note into common stock was a non-cash financing activity and is presented as a supplemental non-cash disclosure in the condensed consolidated statements of cash flows.