Note 3 – Investment in Convertible Note

On March 23, 2026, the Company received a convertible promissory note from Autonomous Power Corporation with an original principal amount of $20,000,000. The investment in convertible note bears simple interest at 10% per annum and matures on March 23, 2027. Interest is payable at maturity or upon earlier conversion, prepayment, or acceleration. The issuer may prepay the note at any time prior to maturity in an amount equal to the outstanding principal plus accrued interest and any other amounts due.

The convertible note was issued in connection with the Company’s pending merger with Powerus pursuant to the Merger Agreement. The primary business purpose of this financing was to provide Powerus with interim working capital to sustain its operations, support business development, and maintain business continuity pending the closing of the merger. While the execution and timing of the convertible note are commercially linked to the merger process, the convertible note is a standalone, legally enforceable debt instrument governed by its own terms and conditions. The purchase of the convertible note does not modify or otherwise affect the exchange ratio, purchase price, or any other material terms of the Merger Agreement.

The repayment of the convertible note and the Company's right to convert it are not contingent upon the consummation or failure of the merger. If the merger is completed, the convertible note will become an intercompany receivable/payable within the consolidated group and will be eliminated in consolidation upon the closing of the merger. If the merger is not completed, Powerus remains legally obligated to repay the outstanding principal plus accrued interest at maturity or upon earlier prepayment, in accordance with the contractual terms of the convertible note.

The convertible note is not convertible at the Company’s option unless an event of default occurs. Upon an event of default, the Company may convert all or any portion of the payment amount into shares of the issuer’s common stock at a fixed conversion price of $1,979 per share. If no event of default occurs, the investment in convertible note is expected to be settled in cash at maturity.

The Company did not elect the fair value option under ASC 825. Accordingly, the investment in convertible note is measured at amortized cost, which includes outstanding principal plus accrued interest, less any allowance for expected credit losses under ASC 326. The Company evaluates the collectability of the investment in convertible note at each reporting period based on available information, including contractual terms, current conditions, and reasonable and supportable forecasts. As of June 30, 2026, no event of default had occurred and management determined that no allowance for expected credit losses was required.

The following table summarizes the movement of the investment in convertible note:

 Schedule of Investment in Convertible Note

Interest income from the convertible note was $547,945 and $nil for the six months ended June 30, 2026 and 2025, respectively. The carrying amount of the convertible note was $20,547,945 as of June 30, 2026 and $nil as of December 31, 2025. Please refer to Note 2, Fair Value of Financial Instruments, for the fair value disclosure related to the investment in convertible note.