NOTE 10 – DEBT

Notes Payable current – convertible option

The Company uses the Black-Scholes Model to calculate the derivative value of its convertible debt. The valuation result generated by this pricing model is necessarily driven by the value of the underlying common stock incorporated into the model. The values of the common stock used were based on the price at the date of issue of the debt security as of June 30, 2026 and 2025. In 2026 management determined the expected volatility ranging from 255.02% to 285.15%, a risk-free rate of interest ranging from 3.59% to 4.25%, and contractual lives of the debt of three to nine months. In 2025 management determined the expected volatility ranging from 167% to 235.41%, a risk-free rate of interest ranging from 3.98% to 4.7334%, and contractual lives of the debt of twelve months. Management made the determination to use an expected life rather than contractual life for the calculations for the matured debt as of June 30, 2026 and 2025.

As of June 30, 2026 and 2025, there was $231,150 and $208,150 of note payable debt principal outstanding. During the six months ended June 30, 2026 and 2025, $31,834 and $0 of the debt discount was amortized.

The summary of notes payable current – convertible option:

The table below details the Company's outstanding notes payable current – convertible option and related derivative.

During the six months ended June 30, 2026 and 2025, change in fair value of the derivative liability was $86,586 and $90,103, respectively. The following is a summary of the derivative liability:

Notes Payable – convertible option

On March 3, 2026, the Company entered into a promissory note for a principal of $65,550, which was funded on March 6, 2026. The note bears interest at a rate of 15% per annum and matures after six months.

On May 7, 2026, the Company entered into a promissory note for a principal of $77,050, which was funded on May 11, 2026. The note bears interest at a rate of 15% per annum and matures after six months.

On May 21, 2026, the Company entered into a promissory note for a principal of $77,000, which was funded on May 28, 2026. The note bears interest at a rate of 15% per annum and matures after six months.

Loans Payable

The Company’s RI and WS subsidiaries have various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans, lines of credit and other advances. The loans bear interest with varying rates up to 9.25% per annum. The following is a summary of the loans payable at June 30, 2026 and December 31, 2025:

Certain of the Company’s subsidiary debt arrangements are guaranteed by former shareholders of the acquired entity. The Company has not assumed these guarantees and has no legal obligation related to such guarantees.