LOANS AND OTHER LIABILITIES

6 Months Ended

Jun. 30, 2026

Loans And Other Liabilities Abstract

Loans and Other Liabilities [Text Block]

NOTE 11 – LOANS AND OTHER LIABILITIES

Loan as of June 30, 2026, and December 31, 2025:

	(in thousands)						(in thousands)
	June 30, 2026 (Unaudited) ($)						December 31, 2025 (Audited) ($)
Description of Loans	Non-Current		Current		Total		Non-Current		Current		Total

*Related-Party Loan ⁽¹⁾*		-		-		-		-		176		176
Loan from Executive Officers		-		-		-		-		176		176
Non-Related Party Loan
FirstFire Global Opportunities Fund, LLC⁽²⁾				289		289
Vanquish Funding Group Inc. ⁽³⁾		-		492		492		-		-		-
SBA Economic Injury Disaster Loan⁽⁴⁾		129		4		133		131		4		135
ODK Capital, LLC ⁽⁵⁾		20		148		168		-		-		-
Total non-related party loan		149		933		1,082		131		4		135
Total Loans		149		933		1,082		131		180		311

On June 30, 2026, the Company entered into separate Stock Purchase Agreements with Mr. Ram Mukunda and Ms. Claudia Grimaldi relating to outstanding amounts aggregating $1,154,210. Pursuant to the agreements, the Company approved the future issuance of an aggregate of 4,274,853 shares of common stock at $0.27 per share. As of June 30, 2026, the shares had not been issued or reflected as outstanding in the Company’s stock ledger, and the related amount was classified within stockholders’ equity as common stock subscribed but not yet issued. For more information, please refer to Note 13, “Securities.” As of December 31, 2025, the Company had outstanding related-party working capital loans of approximately $176 thousand, all of which were payable to Ms. Grimaldi.

On April 10, 2026, the Company entered into a Securities Purchase Agreement (the “FirstFire Purchase Agreement”) with FirstFire Global Opportunities Fund, LLC (“FirstFire”), pursuant to which the Company issued a promissory note (the “FirstFire Note”) with a principal amount of approximately $346 thousand, maturing on April 16, 2027. The FirstFire Note was issued with an original issue discount of approximately $39 thousand and debt issuance costs of approximately $5 thousand, resulting in net proceeds of approximately $302 thousand. On June 18, 2026, the Company and FirstFire entered into Amendment #1 to the FirstFire Purchase Agreement and the FirstFire Note, which deemed the issue date of the FirstFire Note to be April 14, 2026 and extended the maturity date, the monthly payment dates and the prepayment periods by six calendar days, resulting in a maturity date of April 16, 2027. Amendment #1 is filed as Exhibit 10.7 to this Quarterly Report.

The Company determined that the conversion feature requires bifurcation as an embedded derivative under ASC 815-15. The total debt discount of approximately $80 thousand, comprising the original issue discount, derivative liability, and debt issuance costs, is being amortized to interest expense over the term of the FirstFire Note using the effective interest method. For the six months ended June 30, 2026, amortization of the debt discount was approximately $23 thousand. On the issuance date, the embedded derivative liability was initially measured at approximately $36 thousand. As of June 30, 2026, the carrying amount of the FirstFire Note was approximately $289 thousand, net of an unamortized debt discount of approximately $57 thousand, and the fair value of the related derivative liability was approximately $26 thousand. For more information, please refer to Note 15 “Fair Value of Financial Instruments”.

The terms of the FirstFire transaction, including the conversion provisions, beneficial ownership limitation, exchange cap, Events of Default and other material provisions, are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2026.

During the six months ended June 30, 2026, the Company executed two separate Securities Purchase Agreements with Vanquish Funding Group Inc. and issued two separate promissory notes to VFG with aggregate principal of approximately $591 thousand, maturing in February and March 2027, respectively, namely VFG-1 and VFG-2. The VFG Notes were issued with an aggregate original issue discount of approximately $77 thousand and aggregate debt issuance costs of approximately $44 thousand, resulting in net proceeds of approximately $470 thousand.

The Company determined that the conversion feature requires bifurcation as an embedded derivative under ASC 815-15. The total aggregate debt discount of approximately $168 thousand, comprising the original issue discounts, derivative liabilities, and debt issuance costs, is being amortized to interest expense over the term of the VFG Notes using the effective interest method. For the six months ended June 30, 2026, amortization of the debt discount was approximately $69 thousand. On the respective issuance dates, the embedded derivative liabilities related to the VFG Notes were initially measured at an aggregate fair value of approximately $47 thousand. As of June 30, 2026, the carrying amount of the VFG Notes was approximately $492 thousand, net of an unamortized debt discount of approximately $99 thousand, and the aggregate fair value of the related derivative liabilities was approximately $46 thousand. For more information, please refer to Note 15 “Fair Value of Financial Instruments”.

The terms of the VFG-1 transaction, including the conversion provisions, beneficial ownership limitation, exchange cap, Events of Default and other material provisions, are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2026. The terms of the VFG-2 transaction are more fully described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2026.

On June 11, 2020, the Company received an Economic Injury Disaster Loan (“EIDL”) for approximately $150 thousand at an annual interest rate of 3.75%. The Company must pay principal and interest payments of $731 every month beginning June 5, 2021. The SBA will apply each installment payment first to pay interest accrued to the day the SBA receives the payment and will then apply any remaining balance to reduce the principal. All remaining principal and accrued interest is due and payable 30 years from the date of the loan. For the six months ended June 30, 2026, the interest expense and principal payment for the EIDL were approximately $3 thousand and $2 thousand, respectively.

On February 9, 2026, HH Processors, LLC, a subsidiary of the Company, entered into a loan agreement with ODK Capital LLC (“OnDeck”), pursuant to which the Company received net proceeds of approximately $214 thousand in financing (the “OnDeck Loan”). The OnDeck Loan bears an annual percentage rate of 31.9% and is repayable in accordance with the terms and conditions set forth in the loan agreement, including scheduled periodic payments of approximately $3 thousand per week. The OnDeck Loan matures in August 2027. The proceeds are being used for general working capital and corporate purposes. For the six months ended June 30, 2026, the interest expense and principal payment for OnDeck were approximately $21 thousand and $48 thousand, respectively.

The Company maintains a revolving working capital credit facility with O-Bank that provides for maximum aggregate borrowings of up to $12 million. Borrowings are limited to $1 million per month and are subject to the applicable terms and conditions of the facility. As of June 30, 2026, no amounts were outstanding under the facility. The facility expires on May 31, 2027. The Company expects to seek renewal before expiration; however, there can be no assurance that the facility will be renewed, that future borrowings will be available when required, or that any renewal will be on similar terms.