Note 12 – Debt

Kaufman Convertible Note Payable, Related Party

On July 15, 2024, the Company entered into a Securities Purchase Agreement (as amended, the “SPA”) with Daniel L. Kaufman, pursuant to which Mr. Kaufman agreed to purchase from the Company, in a private placement (i) a 12% Senior Secured Convertible Promissory Note in the principal amount of up to $3,400,000 (the “Convertible Note”), convertible into shares of the Company’s common stock at a fixed price of $0.7582 per share of common stock, a (ii) a warrant to purchase 1,000,000 shares of common stock at an exercise price of $1.00 per share (the “$1.00 Warrant”), and (iii) a warrant to purchase 500,000 shares of common stock at an exercise price of $1.50 per share (the “$1.50 Warrant” and, together with the $1.00 Warrant, the “Warrants” and together with the Convertible Note, the “Purchased Securities”), in consideration of an initial loan in the principal amount of $2,000,000 (the “Initial Loan”) made to the Company under the Convertible Note, subject to the terms and conditions thereof.

On July 19, 2024, the Company, Mr. Kaufman and Kaufman Kapital LLC (“Kaufman Kapital”) entered into an amendment to the SPA, which among other things, replaced Mr. Kaufman with Kaufman Kapital as the “Investor” under the SPA.

The Convertible Note matures on the earlier of (i) December 31, 2025, (ii) the sale by the Company of $5,000,000 of equity or debt securities in a single transaction or series of related transactions (excluding certain specified transactions), or (iii) the closing of a change of control transaction as provided in the Convertible Note. Loans outstanding under the Convertible Note bear interest at an initial rate of 12% per annum, and together with accrued principal are convertible into common stock.

On July 24, 2024 the, the Initial Loan payment of $2,000,000 was made to the Company under the Convertible Note, and on December 9, 2024, Kaufman Kapital made an additional loan to the Company under the Convertible Note in the amount of $1,400,000.

On June 1, 2025 the Company and Kaufman Kapital entered into a Warrant Exercise and Amendment to Notes and Warrant Agreement (the “Warrant Exercise Agreement”), pursuant to which Kaufman Kapital exercised in full the $1.00 Warrant on June 4, 2025 for a cash payment to the Company of $1,000,000. In addition, pursuant to the Warrant Exercise Agreement, Kaufman Kapital and the Company agreed (i) to extend the expiration date of the $1.50 Warrant to December 31, 2026, (ii) to extend the maturity date of the Convertible Note to December 31, 2026, (iii) to extend the maturity date of the Senior Secured Promissory Note of the Company in the original principal amount of $1,200,000, issued to Kaufman on August 29, 2024 (the “Secured Note”) to December 31, 2025, (iv) that the Company will not make any prepayment under the Convertible Note at any time amounts are outstanding under the Secured Note or any other non-convertible notes of the Company (excluding notes issued pursuant to equipment financing), and (v) that the Company will not prepay more than $2,400,000 of principal outstanding under the Convertible Note prior to September 30, 2026.

On January 28, 2026, Kaufman Kapital converted $500,000 of outstanding principal under the Convertible Note into 659,457 shares of the Company’s common stock.

On May 7, 2026, Kaufman Kapital exercised in full the $1.50 Warrant to purchase 500,000 shares of the Company’s common stock at an exercise price of $1.50 per share, resulting in cash proceeds to the Company of $750,000. In connection with the warrant exercise, the Convertible Note was amended to extend the maturity date from December 31, 2026 to December 31, 2027 and reduce the interest rate from 12% to 8%.

The Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s assets pursuant to a Security Agreement entered between the Company and Kaufman Kapital (the “Security Agreement”). In addition, the Convertible Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions of this nature.

In accordance with ASC 470, the Company recorded total discounts of $95,958, consisting of $75,000 of legal fees and $20,958 related to the relative fair value of the Warrants. The discounts are amortized to interest expense over the term of the loan using the effective interest method. As of June 30, 2026, a total of $16,735 of unamortized debt discounts are expected to be expensed over the remaining life of the loan.

The Company recognized interest expense on the convertible note payable for the three and six months ended June 30, 2026 and 2025 as follows:

 Schedule of Interest Expense on Convertible Note payable

Kaufman Senior Secured Promissory Notes, Related Party

On August 29, 2024, the Company borrowed $1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note (the “2024 Secured Note”) that, as amended, matured on December 31, 2025. The loan under the 2024 Secured Note bore interest at a rate of 15% per annum. The Company’s obligations under the 2024 Secured Note were secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement. In addition, the 2024 Secured Note included affirmative and negative covenants, events of defaults and other terms and conditions, customary in transaction of this nature. The Company repaid the full $1,200,000 principal balance during the year ended December 31, 2025, and no amounts were outstanding as of December 31, 2025.

On January 28, 2026, the Company borrowed $1,500,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note (the “2026 Secured Note”) that matures on January 28, 2027 and bears interest at 8% per annum on the outstanding principal balance, with accrued interest payable at maturity or upon earlier repayment. The note may be prepaid at any time without penalty and is secured by substantially all of the Company’s assets pursuant to the existing Security Agreement dated July 23, 2024, as amended. The 2026 Secured Note agreement includes customary affirmative and negative covenants and events of default.

On April 17, 2026 and May 15, 2026, the Company borrowed an additional $750,000 on each date from Kaufman Kapital under the same terms as the 2026 Secured Note. In connection with these borrowings, the 2026 Secured Note was amended and restated to increase the aggregate principal balance to $3,000,000. On June 30, 2026, the Company again amended and restated the 2026 Secured Note increasing the principal amount available thereof to $4,000,000. The additional $1,000,000 was funded on July 1, 2026 and, accordingly, only $3,000,000 was outstanding under the 2026 Secured Note as of June 30, 2026.

The Company recognized $50,500 and $71,167 of interest expense on 2026 Secured Note payable, related parties for the three and six months ended June 30, 2026.

Eagle Vision Senior Notes and Warrants, Related Party

Eagle Vision Fund LP, an affiliate of the Company’s Chief Financial Officer and director, previously participated in senior secured note financings with detachable warrants. During the year ended December 31, 2025, the Company repaid the remaining $1,560,000 principal balance, and no amounts were outstanding as of December 31, 2025. For the three and six months ended June 30, 2025 the Company recognized $95,495 and $197,577 of interest expense on Eagle Vision Senior Notes. Certain warrants issued in connection with these financings remain outstanding as of June 30, 2026.

Notes payable to related parties, consists of the following as of June 30, 2026 and December 31, 2025:

 Schedule of Notes Payable Related Parties 

EnWave Equipment Promissory Note

On May 22, 2023, the Company entered into an equipment purchase agreement with EnWave for the purchase of a used 100kW Rev vacuum microwave dehydration machine (the “EnWave Machine”). Cash payments of $500,000 were paid towards the $1,000,000 purchase price on the EnWave Machine, while the $500,000 balance due is to be paid in twelve (12) monthly installments of $44,424, bearing interest 12% per annum, commencing August 1, 2024. The equipment loan was paid in full as of December 31, 2025.

On September 16, 2025, the Company and EnWave entered into (i) a Fifth Amendment to License Agreement (the “Amendment”), which amended certain terms of the License Agreement between the Company and EnWave originally dated May 7, 2021 (as amended, the “License Agreement”), and (ii) an Equipment Purchase Agreement (the “Purchase Agreement”). Pursuant to the Amendment, among other things, EnWave granted the Company a global exclusive license (but subject to existing licenses previously issued by EnWave to two other manufacturers) to manufacture Dragon Fruit products using EnWave’s technology under the License Agreement.

Pursuant to the September 16, 2025 Amendment, the Company purchased from EnWave a refurbished 120kW REV vacuum microwave for a purchase price of $1,500,000. The purchase price is payable in 24 equal monthly installments, commencing April 1, 2026, pursuant to a secured promissory note (the “Promissory Note”) bearing interest at the rate of 8.00% per annum.

SBA EIDL Loan Agreement

On May 17, 2020, the Company entered into a loan agreement with the United States Small Business Administration (the “SBA”), as lender, pursuant to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business (the “EIDL Loan Agreement”) encompassing a $34,500 Promissory Note issued to the SBA (the “EIDL Note”) (together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest at 3.75% per annum. In connection with entering into the EIDL Loan, the Company also executed a security agreement, dated May 17, 2020, between the SBA and the Company pursuant to which the EIDL Loan is secured by a security interest on all of the Company’s assets. Under the EIDL Note, the Company is required to pay interest payments of $169 every month beginning May 17, 2021; however, the SBA extended the repayment date to November 17, 2022. All remaining principal and accrued interest is due and payable on May 17, 2050. The EIDL Note may be repaid at any time without penalty.

The Company has notes payable (in addition to the Senior Secured Note and the Convertible Note payable to Kaufman Kapital described above), consisting of the following as of June 30, 2026, and December 31, 2025:

 Schedule of Notes Payable 

For the three and six months ended June 30, 2026, the Company recognized interest expense of $29,254 and $29,597, respectively, on these notes payable. For the corresponding periods in 2025, interest expense was $4,964 and $9,972, respectively.

The schedule of principal maturities of debt as of June 30, 2026 are as follows:

Schedule of Maturities of Debt

The Company recognized aggregate interest expense for the three and six months ended June 30, 2026, and 2025 respectively, as follows:

 Schedule of Recognized Interest Expense