NOTE 6 – NOTES PAYABLE, CONVERTIBLE DEBT & DERIVATIVE LIABILITY

Summary of Outstanding Debt

 SCHEDULE OF DEBT

At December 31, 2025, derivative liabilities were measured using an option-pricing methodology based upon market inputs including stock price, historical volatility, expected term, dividend yield and risk-free interest rates.

During the six months ended June 30, 2026, management completed an instrument-by-instrument review of the Company’s outstanding debt agreements. Based on management’s evaluation of the outstanding debt instruments at June 30, 2026, only one instrument continued to require derivative accounting under ASC 815 as of June 30, 2026. The only instrument requiring derivative accounting treatment at June 30, 2026 was the Averitt note. The change in derivative value for the Averitt note during the six months ended June 30, 2026 was not material.

AJB Capital Note

On December 19, 2025, AJB converted a total of fourteen (14) notes, totaling $2,931,356 in principal and $737,879 in accrued interest owed to AJB for 446,477,338 shares of the Company’s Common Stock plus a cash payment of $500,000 and issued to AJB a pre-funded warrant to purchase up to 713,915,563 shares of the Company’s Common Stock. As a result, 13 of the notes were paid down to zero at December 31, 2025. As of December 31, 2025 the balance on the remaining AJB Note amounted to $81,934 plus accrued interest of $13,637. At June 30, 2026, balance on the remaining AJB note was $81,934 plus accrued interest of $17,734. The AJB Note is secured by a first priority security interest in all assets of the Company (the “Collateral”) with the security interest subordinated to the TMCF Note.

CoinTracking Note

The CoinTracking Note is past due and continues to accrue interest at a 10% annual rate. A payment of $10,000 was paid in the three months ended June 30, 2026. The noteholder has requested repayment but has taken no further action.

Fast Capital

On February 2, 2023, the Company borrowed funds pursuant to a SPA entered into with Fast Capital, LLC (“Fast Capital”), and Fast Capital purchased a 10% convertible promissory note (the “Fast Capital Note”) from the Company in the aggregate principal amount of $115,000. The Fast Capital Note has an original issue discount of $10,000, resulting in gross proceeds to the Company of $105,000. Pursuant to the SPA, the Company agreed to reimburse Fast Capital for certain fees in connection with entry into the SPA and the issuance of the Fast Capital Note. The SPA contains certain covenants and customary representations and warranties by the Company and Fast Capital typically contained in such documents.

As of December 31, 2025, the balance remaining under the Fast Capital Note was $8,784, with estimated accrued interest of $40,000. In May, 2026, Fast Capital converted the outstanding principal of $8,784 and actual accrued, unpaid interest of $2,275 into 16,280,281 shares of common stock of the Company. The debt has been repaid in full as of June 30, 2026.

The Fast Capital Note had a remaining discount of $10,107 as of December 31, 2025. With the conversion of the note to shares, the Note Discount has been eliminated.

Three Mile Creek

On July 10, 2025, the Company borrowed funds from Three Mile Creek Future LLC (“TMCF”) and issued a Promissory Note (the “TMCF Note”) in the principal amount of 1.7 Bitcoin and a Pre-Funded Common Stock Purchase Warrant (the “Warrant”), which entitles TMCF to subscribe for and purchase from the Company up to 77,704,407 shares of the Company’s common stock, each executed on July 16, 2025. These warrants were valued at $77,704.

The principal balance of the TMCF Note was due on January 10, 2026. The managing member of the LLC is a related party. No action has been taken with respect to the past due note status. The TMCF Note bears no interest and can be pre-paid by the Company any time without penalty. To secure the payment and performance of all obligations under the TMCF Note, the Company granted to TMCF a continuing security interest in all assets of the Company (the “Collateral”). Upon event of default, the unpaid principal balance of the TMCF Note will immediately become due and payable, and TMCF will have all rights and remedies available to it under the Nevada Uniform Commercial Code, including the right to take possession of the Collateral and to sell or otherwise dispose of it. AJB Capital Investments LLC, which holds a first priority security interest in the Collateral, has consented to the creation of the TMCF security interest in the Collateral and agreed to subordinate its lien to TMCF’s security interest.

The Warrant entitles TMCF to subscribe for and purchase from the Company up to 77,704,407 shares of the Company’s common stock any time prior to July 10, 2030. The aggregate exercise price of the TMCF Warrant was pre-funded to the Company. Consequently, TMCF need not pay any additional consideration to exercise the Warrant, other than a nominal exercise price of $0.03 per share.

As of June 30, 2026, the outstanding balance of the Three Mile Creek note is $188,552.

Promissory Notes - Investor

Beginning on August 13, 2025, the Company executed subscription agreements with accredited investors: Eksa Holdings LLC, Practivist Investors LLC, Richard G Averitt, Robert Nail, and Ryan Crownholm (each, an “Investor” and collectively, the “Investors”), in which the Company issued an aggregate of 65,043,533 shares of the Company’s common stock. These shares were valued at $221,441. In addition, the Investors purchased, and the Company issued Convertible Promissory Notes amounting to $1,010,780 (each, a “Note” and collectively, the “Notes”) with the aggregate principal amount of 3 Bitcoin (“BTC”), 47.07 Ethereum (“ETH”), 110,505 XRP (“XRP”), 733.83 Avalanche (“AVAX” and together with BTC, ETH and XRP, the “Tokens”), and $100,000 U.S. Dollars (“USD”).

The Notes bear no interest and mature six months from the date of issuance of each Note (the “Maturity Date”), unless earlier converted or repaid in accordance with its terms.

On the Maturity Date, at each Investor’s election, the Notes are either: (a) converted into a number of shares equal to 135% of the principal amount of each Note divided by the cash value of one share of Common Stock, as determined by the average close price for the prior 10 trading days calculated on the Maturity Date; or (b) (i) if Investor contributes USD, repaid in BTC, in an amount equal to the BTC market value of the principal amount of the Note on the date the Company purchases BTC, or (ii) if Investor contributes Tokens, repaid in the same Token, in the quantity contributed. In case an Investor fails to make a conversion election, the principal amount of each Note shall convert into shares of Common Stock.

An Investor may request full repayment of a Note at any time prior to the Maturity Date. If Investor contributes USD, the Note will be repaid in BTC, in an amount equal to 90% of the BTC market value of the principal amount of the Note on the date the Company purchases BTC. If Investor contributes Tokens, the Note will be repaid in the same Token, in an amount equal to 90% of the quantity of contributed Token.

The Notes contain customary representations, warranties, and covenants of the Company, as well as standard events of default.

Pursuant to the Subscription Agreements, the Company issued to each Investor a number of shares of Common Stock equal to 5% of the principal amount of the Note issued to such Investor, divided by a share price based on the volume-weighted average price over the 10 trading days preceding the date of the Note.

Subsequent to the initial subscription agreements, some convertible promissory notes were repaid or converted to standard promissory notes with the issuance of consideration listed in the original convertible promissory note. Upon conversion of these notes to standard promissory notes, the associated derivative liabilities were derecognized as the replacement instruments do not contain features requiring bifurcation under ASC 815. The Company recognized a gain of $560,930 representing the carrying value of the derivative liabilities at the time of conversion, net of the remaining derivative liability of $2,487 associated with the one note not yet converted.

As of June 30, 2026, only the Averitt note, in the amount of $38,772, is still a convertible promissory note. The other notes have either been repaid or reissued as standard promissory notes with the issuance of consideration listed in the original convertible promissory note.

The Ryan Crownholm note was repaid in the three months ended March 31, 2026 using the Tokens originally contributed.

The Averitt Note is now past due. The noteholder has made no demand for payment, and no interest is accruing.

The remaining Investor Promissory Notes are due in August, 2026. The noteholders have made no demand for payment, and no interest is accruing.

Notes Payable - Other

Promissory Note – Ron Levy

As disclosed in Note 5 – Related Party Transactions, on January 27, 2025 (the “Advance Date”), the Company entered into a Promissory Note with Ronald Levy, the Company’s Chief Executive Officer, Interim Chief Financial Officer, Chairman of the Board, and Secretary, in the original amount of $15,000. The Promissory Note bears interest at the rate of 5% per annum and matured four months from the Advance Date. The maturity date has passed, and the Promissory Note has not been repaid. As of June 30, 2026 and December 31, 2025 the principal balance of $15,000 is included in accounts payable and accrued expenses. Interest continues to accrue at the 5% per annum rate.

SBA Loans

● On June 10, 2020, the Company received a loan from the Small Business Administration of $12,100 (the “2020 SBA Loan”). The 2020 SBA Loan bears interest at 3.75% per annum and is payable over 30 years with all payments of principal and interest deferred for the first 12 months. As of June 30, 2026 the remaining balance due is $11,622.

● On February 2, 2021, the Company received a loan from the Small Business Administration of $18,265 (the “2021 SBA Loan”). The 2021 SBA Loan bears interest at 1% per annum and is payable over 5 years with all payments of principal and interest deferred for the first 10 months. As of June 30, 2026, the note has been extinguished in full with no remaining balance.