Note 7 – Notes Payable, Related Party

In connection with the Business Combination, the Company aggregated the outstanding principal balances of various loans with its Sponsor, Bengochea SPAC Sponsors I LLC, and the deferred portion of the business combination consideration payment of $900,000 into a single promissory note with the Sponsor with a principal sum of $1,421,343 that matured on November 15, 2025 (the “Sponsor Note Payable”). Upon the occurrence of an event of default, the Sponsor Note Payable accrues interest at a rate of 15.0% per annum. Upon default, the Sponsor has the right to convert the unpaid principal into shares of the Company’s common stock, subject to a 4.99% beneficial ownership limitation; the conversion formula is not defined in the agreement, and the Company is required to reserve an unlimited number of shares to satisfy the unpaid balance. The Company also assumed a non-interest bearing promissory note with the Sponsor totaling $47,347, due on demand (the “Assumed Sponsor Note Payable”).

As of June 30, 2026, $454,690 of principal remained outstanding on the Sponsor Note Payable and the Assumed Sponsor Note Payable combined, and accrued default interest of approximately $42,417 was included in accrued expenses and other current liabilities. The Company is in default of its payment obligations under the Sponsor Note Payable and continues to be in discussions with the Sponsor to extend the maturity date.