NOTE 6 – CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLE

Convertible Note Payable

On April 1, 2018, the Company assumed a convertible promissory note in connection with the reverse acquisition. The Company received total funding of $106,092 as of December 31, 2018. The note had fees of $53,046 which were recorded as a discount to the convertible promissory note and are being amortized over the life of the loan using the effective interest method. The maturity of the note is March 5, 2023. On March 5, 2023, the note was extended to September 5, 2023, and since then has been continuously extended. Subsequent to December 31, 2025, the note was extended to October 31, 2026.

The note is convertible into common stock at a price of 35% of the lowest three trading prices during the ten days prior to conversion or 35% of an estimated fair value if not traded.

On June 22, 2026, the Company entered a convertible promissory note with Womack Capital Partners, in the aggregate principal amount of $220,000. The note bears interest at 1.5% per month, with an origination fee of $20,000, which was recorded to deferred financing costs and will be amortized over the life of the note. The note matures on December 2, 2026, and is convertible after 90 days into shares of the Company’s common stock. The conversion price per share shall be equal to the average closing price of the Company common stock during the five lowest priced closing values with the ninety day calendar day period immediately preceding the date on which the conversion is requested, multiplied by a premium of 15%.The conversion price share be subject to the following floor and ceiling: (i) floor – the conversion price shall not be less than $0.017 per share, resulting in a minimum conversion price of $0.02 per share (ii) ceiling – the conversion price shall not exceed $0.087 per share, resulting in a maximum conversion price of $0.10 per share. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $117,628 which was recorded as a discount on the convertible notes payable. As of June 30, 2026, the convertible debt balance was $108,181, net of unamortized discount of $111,819 was $200,000.

As of June 30, 2026 and December 31, 2025, the convertible note balance was $214,273 and $106,092, with accrued interest of $113,503 and $108,852, respectively. As of June 30, 2026 and December 31, 2025, the convertible debt was convertible into 17,005,751 and 7,381,169 common shares, respectively.

Derivative liabilities

The conversion features embedded in the convertible notes were evaluated to determine if such conversion feature should be bifurcated from its host instrument and accounted for as a freestanding derivative. In the convertible notes with variable conversion terms, the conversion feature was accounted for as a derivative liability. The derivatives associated with the term convertible notes were recognized as a discount to the debt instrument and the discount is amortized over the expected life of the notes with any excess of the derivative value over the notes payable value recognized as additional interest expense at the issuance date.

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2026, and December 31, 2025:

SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS 

As of June 30, 2026 and December 31, 2025, the derivative liability was calculated using the Black-Scholes method over the expected terms of the convertible debt and the following assumptions: volatility of 130% and 102%, exercise price of $0.0118 - $0.0276 and $0.0144, and risk-free rate of 4.01% and 3.59%, respectively. Included in Derivative Loss in the accompanying consolidated statements of operations is expense arising from the gain on change in fair value of the derivatives of $78,571 and loss on change in fair value of $13,683 during the six months ended June 30, 2026 and 2025, respectively.

SCHEDULE OF CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES 

Notes Payable

On October 25, 2022, the Company entered into a secured promissory note in the amount up of $4,618,960. The note is secured by the deed of trust on the property and bears interest at 5.5% and is due on October 25, 2032. On October 25, 2027, the rate shall be adjusted to the daily rate reported in the Credit Markets section (or similar section) of The Wall Street Journal as the U.S. “Prime Rate” (“Index”), as announced from time to time, without notice to Maker, plus one percent (1.00%) (the sum being the “Adjusted Rate”); provided that in no event shall the Rate or Adjusted Rate exceed the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law. Monthly payments of accrued and unpaid interest shall commence on November 25, 2022, and continue on the same date of each succeeding calendar month through and including April 25, 2024. Thereafter, monthly principal and interest (“Payments”) in the amount of $26,459 will be paid, which is the amount necessary to amortize the stated principal balance. The Company recorded $94,072 of loan cost as a debt discount and will be amortized over the life of the note. During the six months ended June 30, 2026, the Company repaid $32,523 of principal related to this note. During the six months ended June 30, 2026, the Company capitalized $4,661 of loan costs and $126,771 of interest related to this note. As of June 30, 2026, the loan balance was $4,479,735, net of $59,462 of debt discount. As of December 31, 2025, the loan balance was $4,507,597, net of $64,123 of debt discount.

On March 27, 2025, the Company entered into a secured promissory note in the amount up of $1,500,000. The note is secured by the deed of trust on the property and bears interest at 8.5% and is due on March 27, 2032. On March 27, 2030, the rate shall be adjusted to the daily rate reported in the Credit Markets section (or similar section) of The Wall Street Journal as the U.S. “Prime Rate” (“Index”), as announced from time to time, without notice to Maker, plus one percent (1.00%) (the sum being the “Adjusted Rate”); provided that in no event shall the Rate or Adjusted Rate exceed the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law. Monthly payments of accrued and unpaid interest shall commence on April 27, 2025, and continue on the same date of each succeeding calendar month through and including March 27, 2032. The Company recorded $76,990 of loan cost as a debt discount and will be amortized over the life of the note. During the six months ended June 30, 2026, the Company repaid $15,694 of principal related to this note. During the six months ended June 30, 2026, the Company capitalized $5,029 of loan costs and $61,385 of interest related to this note. As of June 30, 2026, the loan balance was $1,397,285, net of $64,209 of debt discount. As of December 31, 2025, the loan balance was $1,407,951, net of $69,238 of debt discount.

As of June 30, 2026, the secured notes payable balance was $5,877,020, consisting of long term notes payable of $5,877,020 and current portion of notes payable of $0. As of December 31, 2025, the secured notes payable balance was $5,915,548, consisting of long term notes payable of $5,915,148 and current portion of notes payable of $0.