Convertible Notes Payable Net of Debt Discount

6 Months Ended

Jun. 30, 2026

Convertible Notes Payable Net of Debt Discount [Abstract]

CONVERTIBLE NOTES PAYABLE NET OF DEBT DISCOUNT

10. CONVERTIBLE NOTES PAYABLE NET OF DEBT DISCOUNT

Convertible Notes Payable consisted of the following:

	June 30,			December 31,
	2026			2025

Tranche 1: February 10 2025	$	555,555			555,555
Tranche 2: February 27 2025		1,111,111			1,111,111
Tranche 3: March 28 2025		1,666,666			1,666,666
Tranche 4: August 1, 2025		833,333			833,333
Total Convertible Debt		4,166,665			4,166,665
Less: Debt Discount		(302,698	)		(900,198	)
Less: Repayment		(882,500	)		-
Total Convertible Notes Payable	$	2,981,467			3,266,467

During the initial recognition company calculated fair value of derivative liability on convertible debt and warrants and recorded the difference as debt discount subject to maximum of notes payable amount. Debt discount will be amortized over the term of the note.

On February 6, 2025, the Company entered into a Securities Purchase Agreement with Arena Special Opportunities (Offshore) Master II, LP and Arena Special Opportunities Partners III, LP (collectively, the “Arena Investors”), pursuant to which the Company issued secured convertible debentures with an aggregate principal amount of $4,166,665. The Debentures accrue interest at 10% per annum, payable in kind, and contain a variable-price conversion feature. The accounting for the embedded conversion feature is described in Note 11.

On April 15, 2026, the Company entered into an Amended and Restated Forbearance Agreement with the Arena Investors, which revised the repayment terms of the Debentures. Under the agreement, the Company was required to make scheduled monthly payments and repay all remaining amounts outstanding by September 30, 2026, subject to earlier repayment or conversion.

The Company evaluated the revised terms under ASC 470-50 and determined that the transaction resulted in an extinguishment of the existing debt and recognition of replacement debt. In connection with the restructuring, the Company also issued warrants to purchase 250,000 shares of common stock.

During the three months ended June 30, 2026, the Company made aggregate cash payments of approximately $1.06 million, of which approximately $0.88 million reduced contractual principal, with the remaining amount primarily representing contractual redemption premiums and other amounts due under the debt agreements.

The Company recognized a loss on debt extinguishment of approximately $619,000 during the three and six months ended June 30, 2026. The replacement debt was initially recorded at fair value, and the resulting debt discount is being amortized over the remaining term using the effective interest method.