v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt

Note 5 – Debt

 

Notes Payable - Related Parties

 

The Company has entered into several notes payable with related parties, each of whom is a member of the Board of Directors. A summary of notes payable - related parties as of June 30, 2026 and December 31, 2025 is as follows:

 

Terms   Note Payable #1
Related Party		   Note Payable #2
Related Party		   Note Payable #3
Related Party		   Note Payable #4
Related Party
                 
Issuance dates of notes   August 2022   April 2023   August 2024   February 2025
Maturity date   December 2026   March 2025   December 2024   March 2025
Interest rate   10%   8%   0%   0%
Imputed interest rate   N/A   N/A   8%   8%
Default interest rate   20%   20%   20%   None
Collateral   PET-CT Imaging Device   PET-CT Imaging Device   PET-CT Imaging Device   Unsecured

  

                   Total 
December 31, 2024  $1,200,000   $150,000   $100,000   $-   $1,450,000 
Proceeds from issuance of note   -    -    -    100,000    100,000 
Repayments   -    (150,000)   (100,000)   (100,000)   (350,000)
December 31, 2025   1,200,000    -    -    -    1,200,000 
Repayments   (325,000)   -    -    -    (325,000)
June 30, 2026  $875,000   $-   $-   $-   $875,000 

 

Note #1

 

In March 2025, Note #1 was extended to December 31, 2025.

 

On February 16, 2026, Note #1 was further extended to June 30, 2026.

 

On June 30, 2026, Note #1 was further extended to December 31, 2026.

 

The Company evaluated each extension under FASB ASC 470-50-40 and concluded that the extensions did not constitute a substantive modification. Accordingly, no debt extinguishment occurred and no gain or loss was recognized.

 

Note #1 is collateralized by the Company’s sole imaging device, which is carried in inventory.

 

The lender has authorized the sale of the collateral, and the loan agreement requires sale proceeds to be applied toward the outstanding loan balance.

 

During the six months ended June 30, 2026, the Company repaid $325,000.

 

Note #2

 

In April 2023, the Company executed a one-year note with a shareholder and director in the principal amount of $500,000. The note bears interest at 8.0% per annum, with a default rate of 20.0%, and is secured by the net proceeds from the Company’s PET imaging devices and service contracts. Original principal was payable 50% on December 31, 2023 and 50% plus accrued interest on March 31, 2024.

 

The note was extended and repaid in full as follows:

 

●In March 2024, the remaining balance of $250,000 was extended to September 2024. During 2024, $100,000 of principal was repaid.

●In September 2024, the remaining balance of $150,000 was extended to March 2025.

●During 2025, the remaining $150,000 of principal was repaid in full, and $41,414 of accrued interest was forgiven by the lender.

 

Because the lender is a significant stockholder and director, the Company accounted for the interest forgiveness as a capital contribution, recording $41,414 as an increase to additional paid-in capital rather than as a gain on extinguishment. This treatment is consistent with FASB ASC 470-50-40-2, which addresses extinguishment transactions between related parties, and with FASB ASC 850-10-50-5, which requires related-party transactions to be presented in accordance with their substance rather than as arm’s length transactions.

 

The Company evaluated the 2024 and 2025 extensions under FASB ASC 470-50-40 and concluded that the extensions did not add or eliminate a substantive conversion feature, did not result in cash flows that differed by 10% or more from those under the original instrument, and did not result in significant changes to interest rate, collateral, or repayment terms beyond the extension of maturity. Accordingly, no debt extinguishment occurred and no gain or loss was recognized.

 

In connection with the original issuance of the note in 2023, the Company issued 100,000 warrants to the lender with an exercise price of $0.10 per share. The warrants vested immediately and had an original expiration date of December 31, 2025. The fair value of the warrants of $126,699 was recorded as a debt discount and amortized over the original term of the note. On December 31, 2025, the expiration date of the warrants was extended to December 31, 2026, with no financial statement impact (see Note 9).

 

Note #3

 

In August 2024, the Company executed a four-month, non-interest-bearing note with a shareholder and director in the principal amount of $100,000, with a default interest rate of 20%. The note was secured by the net proceeds from the Company’s PET imaging devices and service contracts. Because the note was issued by a related party at a below-market interest rate, the Company recorded imputed interest at 8%, resulting in interest expense of $1,600 for the year ended December 31, 2024, with a corresponding credit to additional paid-in capital. The note was repaid in full in March 2025. 

 

Note #4

 

In February 2025, the Company executed a one-month, non-interest-bearing, unsecured note with a shareholder and director in the principal amount of $100,000. The Company recorded imputed interest at 8%, resulting in interest expense of $1,336 for the year ended December 31, 2025, with a corresponding credit to additional paid-in capital. The note was repaid in full during 2025.