NOTE 3— NOTES PAYABLE

Non-Convertible Notes Payable

20% Cash Payment Notes

During the years ended December 31, 2022, and December 31, 2021, the Company issued eighteen non-convertible notes payable to individuals for a total face value of $2,076,158. The notes were due within 60 days from the dates of issuance, were interest free, with a 20% cash payment on the principal amount of the note and were unsecured. During the years ended December 31, 2024, and 2023, the Company repaid or refinanced cumulative principal of $1,283,521 and $156,000, respectively. The Company offered, and investors accepted a conversion of their note payable to the Series C Preferred Convertible stock. A total of $2,225,274 inclusive of a 1.35x conversion incentive was converted. The balance of the non-convertible notes payable as of June 30, 2026 and December 31, 2025, was $0 and $2,965,429, respectively.

PPP Loans

In 2020, the Company and its two subsidiaries received Paycheck Protection Plan (“PPP”) loans under the Cares Act totaling $1,386,580. The PPP loans were expected to be forgiven by the U.S. Small Business Association (“SBA”) and as such, were not made eligible for any distributions under the amended joint Plan of Reorganization which was approved on February 23, 2021(the “Plan”). The Plan further required the Company to file proper forgiveness applications with the SBA no later than February 19, 2021. The Company successfully filed for and received forgiveness confirmation for one of the PPP loans for $103,618 plus interest. The remaining two PPP loans forgiveness applications were not properly completed and filed. The Company reinitiated the two forgiveness applications with the SBA and during the year ended December 31, 2024, the Company received forgiveness for one PPP loan for $812,324. The Company received confirmation from the SBA of full forgiveness of the final PPP loan of $471,300 April 24, 2025. As of June 30, 2026, the Company does not have any open applications filed with the SBA.

Other Non-Convertible Notes

As of June 30, 2026, and December 31, 2025, there were $2,141,089 and $1,305,704, respectively, of Other Non-Convertible Notes. The Notes have fixed interest rates that range up to 18%. As of June 30, 2026, the Notes include $1,712,308 due to Ridgecrest Capital, $200,000 due to Beydogg LLC, and $151,858 due to the Company’s prior Chief Financial Officer. The Notes due to Note Payable holders and the prior Chief Financial Officer relate to deferred compensation, payments to third party service providers, and other normal course of business items. As of December 31, 2025, the Notes include $1,153,846 due to Thor Special Situations LLC (a related party to the Company’s Chief Executive Officer) and $151,858 due to the Company’s prior Chief Financial Officer. The Notes due to Thor Special Situations LLC and the prior Chief Financial Officer relate to deferred compensation, payments to third party service provides, and other normal course of business items.

Non-convertible notes payable as of June 30, 2026, and December 31, 2025, are comprised of the following:

 SCHEDULE OF NON CONVERTIBLE NOTES PAYABLE

Fees and discounts are deferred and amortized over the life of the non-convertible note payable. During the six months ended June 30, 2026, and 2025, the Company recognized a total of $0 and $0, respectively, from the amortization of original issuance debt discounts. The outstanding balance of debt discount as of June 30, 2026, and December 31, 2025, was $0 and $0, respectively.

Convertible Notes Payable

10% OID Senior Secured Convertible Notes

The Company entered into Security Purchase Agreements with lenders for the sale of 10% original issue discount senior secured promissory notes (“10% Notes”) and warrants to purchase shares of the Company’s common stock equal to 50% of the face value. The 10% Notes accrue interest at 10% per annum payable quarterly, are convertible into shares of the Company’s common stock at the option of the holder at any time. The conversion price in effect on the conversion date shall be equal to: the lesser of 75% of the price per share of Common Stock paid by other investors for a majority of the Common Stock issued in the qualified financing (as defined under the 10% Notes) or seventy five cents ($0.75), subject to adjustment therein.

The 10% Notes have full ratchet and anti-dilution provisions, a principal adjustment provision upon default, providing for a principal increase to 110% at maturity if unpaid, 120% at Nine months if unpaid and 130% at 12 months if unpaid. The 10% Notes were due March 31, 2022, and to date, all default provisions have been waived. The amounts due under the 10% Secured Convertible Notes are secured by assets of the Company pursuant to a security agreement.

Warrants to purchase shares of the Company’s common stock have a five-year term, are exercisable upon the completion of a “Qualified Financing” at a cash exercise price equal to the lower of 93.75% of the per share price of Company’s common stock sold to third-party investors in that Qualified Financing, or $0.75 per share, subject to adjustment. The value of the warrants was recorded as debt discounts that are being amortized to interest expense over the life of the notes.

At June 30, 2026, the balance of the 10% notes was converted into Series C and Series E preferred stock. Inclusive of a 1.35x conversion incentive, $6,921,595 was converted to Series C and $6,398,063 was converted to Series E. At December 31, 2025, the balance of 10% notes was $5,948,250 with accrued interest payable of $3,881,716.

35% OID Super Priority Senior Secured Convertible Notes

The Company entered into Security Purchase Agreements with lenders for the sale of 35% original issue discount senior secured promissory notes (“35% Notes”), warrants to purchase shares of the Company’s common and shares of the Company’s common stock as incentives. The 35% Notes have a 35% original issuance discount being amortized to interest expense through maturity, are non-interest bearing, are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event and are prepayable by the Company at any time at a premium of 120% of the outstanding balance. Upon the occurrence of default, the holder shall have the right, at the holder’s option, to convert the 35% Note in whole or in part, including any outstanding principal amount, interest and any fees and any and all other outstanding amounts owing thereon, in each case, at the lower of 1) 75% of average of the two lowest closing prices of the Company’s common stock during the fifteen (15) consecutive trading days ending on the trading day immediately prior to the applicable conversion; or 2) a 25% discount to lowest share price sold by the Company based on any subsequent financings with other investors.

Warrants to purchase shares of the Company’s common stock warrants have a five-year term, are exercisable upon the completion of a Qualified Financing at a cash exercise price equal to 93.75% of the per share price of the Company’s common stock sold to third-party investors in a Qualified Financing.

At June 30, 2026, the balance of the 35% notes was converted into Series C and Series E preferred stock. Inclusive of a 1.35x conversion incentive, $11,183,103 was converted to Series C and $8,296,890 was converted to Series E, At December 31, 2025, the balance of 35% notes was $10,447,244 with accrued interest payable of $3,451,312.

The original issuance discount, deferred financing costs and the relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the six months ended June 30, 2026, and 2025, the Company recognized $0 and $0 in interest expense from the amortization of original issuance discounts, $0 and $0 in interest expense from the amortization of debt discounts from warrants and $0 and $0 in amortization of incentive shares, respectively.

20% OID Senior Secured Convertible Notes Payable

The Company entered into Security Purchase Agreements with lenders for the sale of 20% original issue discount promissory notes (“20% Notes”), warrants to purchase shares of the Company’s common stock with a five-year term, exercisable at any time at the option of the holder at a cash exercise price equal to 85% of the per share price of Company’s common stock sold to third-party investors in a qualified financing and incentive shares of the Company’s common stock. The 20% Notes accrue interest at 10% per annum, principal and interest are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event.

The holder shall have the right to convert the principal amount of the 20% Note and any accrued interest into Common Stock (i) on a qualified financing at a price equal to 85% of the qualified offering price; or (i) otherwise at a conversion price equal to: a 10% discount to the VWAP for the five days preceding the date of conversion subject to a maximum price of $1.00, subject to adjustment therein. The 20% OID Notes are not convertible into shares of Series C Preferred Stock of the Company.

At June 30, 2026, and December 31, 2025, the balance of 20% Notes was $2,913,750 and $3,573,750 respectively, with accrued interest payable of $603,674 and $703,749, respectively. In addition, $622,500 of the 20% OID Senior Secured Convertible Note Payable along with $115,221 in accrued interest for a total of $737,721 converted to the Series E.

The original issuance discount, relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the six months ended June 30, 2026, the Company recognized $0 in interest expense from the amortization of original issuance discounts of the 20% Notes and $0 in amortization of incentive shares and $0 in accrued interest on the 20% Notes.

Convertible notes payable as of June 30, 2026, and December 31, 2025, were comprised of the following:

 SCHEDULE OF CONVERTIBLE NOTES PAYABLE