NOTE 10. NOTES PAYABLE

The following table represents the notes payable and related financing as of June 30, 2026 and June 30, 2025:

SCHEDULE OF NOTES PAYABLE AND RELATED FINANCING

Chardan Convertible Note

During the year ended June 30, 2026, the Company issued a total of 4,845,072 shares of Common Stock to Chardan Capital Markets LLC (“Chardan”) under a promissory note issued to Chardan on October 23, 2024 (the “Chardan Note”), for a total of $959,764 in principal. The conversion rate of 90% of the trailing seven-trading day VWAP prior to payment was between $0.16 and $0.18 per share. As a result, the Company recognized $240,897 in amortized debt discount included in interest expense and has fully settled the Chardan Note balance. As of June 30, 2026 and June 30, 2025, the balance under the Chardan Note was $0 and $718,866, respectively.

See Note 15 for additional information on the fair value and change in fair value related to the derivative.

Secured Convertible Note Financing

On January 7, 2025, the Company and Funicular Funds, LP (“Funicular”) entered into an Amendment, Waiver and Consent (the “Amendment”). Pursuant to the Amendment, the Company and Funicular agreed to certain amendments to the secured promissory note, in the original principal amount of $6 million (the “Secured Note”), and the registration rights agreement (the “Funicular RRA”), in each case entered into between them on February 9, 2024, including an extension of the maturity date of the Secured Note from November 9, 2025 to January 31, 2028. In addition, Funicular agreed to waive certain defaults by the Company under the Secured Note and the Funicular RRA. The Company and the Investor agreed that (a) as of December 31, 2024, the aggregate principal amount of the Note, including all accrued interest through such date (all of which has been added to the principal amount as payment-in-kind) and the aggregate amount of all Registration Delay Payments (as defined in the Funicular RRA) through such date, was $9,357,195, and (b) effective as of January 1, 2025, the Note would accrue interest at the rate of 12.5% per annum specified in the Note, and not at the default rate of 20% per annum.

As of January 7, 2025, AtlasClear Holdings, Inc. accounted for the Amendment as a restructuring under troubled debt restructuring in accordance with ASC 470-60 (“TDR”) of the outstanding liabilities related to the Amendment. The Amendment resulted in the future undiscounted cash flows of the modified debt being greater than the net carrying value of the original debt, as the only change to cash flows was the additional interest for the period from old maturity date to the new maturity date. Since the maximum total undiscounted future cash payments exceeded the carrying amount of the payable, no adjustment to the carrying amount of the restructured debt was required and no restructuring gain was recognized.

During the year ended June 30, 2025, the Company received notice to convert principal and interest under the Secured Note totaling $509,549 resulting in the issuance of 258,678 shares.

During the year ended June 30, 2025, the Company incurred an additional $600,000 in fees due to delays in the registration statement and the unpaid interest of $1,831,819 was applied to the principal balance for a total principal balance of $9,422,271 as of June 30, 2025.

For the year ended June 30, 2025, the Company recognized $1,720,449, of interest expense on the principal and $457,922 of interest related to the amortization of the debt discount issued with the Secured Note. As of June 30, 2025, the carrying value of the Secured Note was $8,909,070 net of discount of $513,201. During the year ended June 30, 2025, Quantum Ventures transferred 368,004 pre reverse split or 6,133 post reverse split registered shares to pay for interest of $217,373.

During the year ended June 30, 2026, the Company issued a total of 63,944,332 shares of Common Stock to Funicular under the Secured Note for total of $9,324,489 in principal and $267,161 of interest. The conversion rate was $0.15 per share, which is the floor established under the Secured Note.

As of October 8, 2025, the company had recognized $269,925 in interest expense on the principal and $513,201 of interest related to the amortization of the debt discount. As of October 8, 2025, the carrying value of the Secured Note was $100,546.

On October 8, 2025, the Company entered into the Restated SPA with Funicular, which amended and restated in its entirety the securities purchase agreement, dated February 9, 2024, pursuant to which the Company had issued and sold to Funicular, in a private placement, the Secured Note, in the original principal amount of $6,000,000. Pursuant to the Restated SPA, the Company issued and sold to Funicular, for a purchase price of $10,000,000, the Restated Note, which amends and restates the Secured Note in its entirety. The principal amount of the Restated Note is $10,097,782, consisting of the $10,000,000 purchase price plus $97,782 in remaining outstanding principal under the Secured Note.

The Restated Note has a stated maturity date of October 8, 2030. Interest accrues at a rate per annum equal to 11%, and is payable semi-annually on each June 30 and December 31. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company in its sole discretion, be either paid in cash or paid in-kind by increasing the principal amount of the Restated Note. In the event of an Event of Default (as defined in the Restated Note), in addition to Funicular’s other rights and remedies, the interest rate would increase to 14% per annum. The Restated Note is convertible, in whole or in part, into shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $0.75 per share (the “Conversion Price”). The Conversion Price is subject to adjustment if the Company issues or is deemed to issue shares of Common Stock at a price below the then-current conversion price (subject to certain exceptions), and is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. The Restated Note contains covenants which, among other things, limit the ability of the Company and its subsidiaries to incur additional indebtedness, incur additional liens and sell its assets or properties.

The Restated Note is secured by a perfected security interest in substantially all of the existing and future assets of the Company and each Grantor (as defined in the Security Agreement, as defined below), including a pledge of all of the capital stock of each of the Grantors, subject to certain exceptions, as evidenced by (i) the security agreement, dated as of February 9, 2024 (the “Security Agreement”), among the Company, each of the Company’s subsidiaries and Funicular, and (ii) the guaranty, dated as of February 9, 2024 (the “Guaranty”), executed by each of the Company’s subsidiaries pursuant to which each of them has agreed to guaranty the obligations of the Company under the Restated Note and the other Loan Documents (as defined in the Restated Note), each of which was entered into in connection with the Funicular Note.

Pursuant to the Restated SPA, the Company agreed, among other things, that if the Restated Note becomes convertible into a number of shares of Common Stock in excess of 19.9% of the Company’s total number of shares of Common Stock outstanding, to seek the approval of its stockholders for the issuance of all shares of Common Stock issuable upon conversion of the Restated Note in excess of that amount, in accordance with the rules of the NYSE American.

The Restated Note issued by the Company to Funicular on October 8, 2025 represents a freestanding financial liability within the scope of ASC 470-10 Debt – Overall, with certain fair value election provisions applied under ASC 825-10 Financial Instruments – Overall. The Restated Note replaces the prior Secured Note originally issued on February 9, 2024, described above, increasing the principal balance from approximately $97,782 to $10,097,782, thereby constituting a significant new investment and creating an extinguishment of the prior note under ASC 470-50 Debt – Modifications and Extinguishments.

The Company elected to apply the Fair Value Option (FVO) under ASC 825-10 to the Restated Note. Under ASC 825-10-15-4 and 825-10-25-4, the Restated Note qualifies as an eligible financial liability because it is recognized upon initial issuance and not within any of the prohibited categories. The election was made at initial recognition and applies to the entire instrument, with upfront fees and costs expensed as incurred. As a result, the Restated Note is measured at fair value with changes recognized in earnings each reporting period, and the Company separately presents in other comprehensive income the portion of fair value changes attributable to instrument-specific credit risk, consistent with ASC 825-10-45-5.

As part of the transaction, fees and expenses incurred in connection with the amendment—principally legal and negotiation costs up to $25,000 —were deducted from the proceeds of the note and treated as fees paid to the creditor under ASC 470-50-40-17. Because the Restated Note is accounted for under the fair value option, third-party costs are expensed as incurred in accordance with ASC 825-10-25-3.

As a result, the Company recognized $22,235 as transaction cost consisting of $25,000 legal cost incurred and a gain of $2,764 in accumulated interest payable that was waived as a result of the Restated Note.

For the year ended June 30, 2026, the Company recognized $806,439 in accumulated interest under the Restated Note and recognized a loss in change in the fair value of $306,137 for the year ended June 30, 2026. See Note 15 for additional information on the fair value and change in fair value related to the Secured Note.

Sellers Note

As a result of the acquisition of Wilson-Davis the company issued (i) $5,000,000 in aggregate principal amount of notes due 90 days after the Closing Date (the “Short-Term Notes”) and (ii) $7,971,000 in aggregate principal amount of notes due 24 months after the Closing Date (the “Long-Term Notes” and, together with the Short-Term Notes, the “Seller Notes”). On August 9, 2024, the Company entered into an agreement to modify the terms of the contingent guarantee where the Company agreed to enter into a convertible note on the amount that had not yet been recovered through share issuances of $2,886,347 plus a 5% convenience fee, resulting in the Company issuing a convertible note of $3,030,665. This Convertible Promissory Note (the “Merger Financing Note”) was issued pursuant to that certain Post-Closing Agreement dated effective August 9, 2024 (the “Agreement”), by and between the Company and the former stockholders of Wilson-Davis, to address the remaining Gross Proceeds Shortfall that cannot be remedied by the transfer of Additional Shares.

As of September 19, 2025, all of the Seller Notes have been fully settled via the conversion to shares of Common Stock. The Company during the year ended June 30, 2026, issued a total of 15,922,008 shares of Common Stock to the AtlasClearing sellers under both the Long-Term Notes and the Merger Financing Note, as defined above, for total of $2,565,216 in principal and $115,221 of interest. The conversion rate of 90% of the trailing 7 seven-trading day VWAP prior to payment was between $0.16 and $0.18 per share.

During the year ended June 30, 2025, the Company received conversion notices for a total $5,000,000 in short term loan principal and $366,979 of short-term loan interest, and long-term loan principal of $6,995,624 and $937,773 of long-term interest. In addition, the Company received conversion notices for a total of $1,439,586 in Merger Financing as discussed below and $256,091 of Merger Financing interest receiving a total of approximately 34,931,855 shares of common stock newly issued registered shares. During the year ended June 30, 2025, the company recognized $366,978 in interest expense on the short-term principal, $969,473 in interest expense on the long-term principal and $594,370 of interest related to the amortization of the debt discount on long-term loan created with the derivative liability. During the year ended June 30, 2025, Quantum Ventures transferred 6,133 registered shares to pay for accrued interest of $92,083 on short-term loan and $98,483 on long-term loan. As of June 30, 2025 the principal balance and accrued interest of short-term loan was fully settled with shares in agreed upon conversion terms. As of June 30, 2025 the principal balance on the long-term loan was $975,573 and $31,700 in accrued interest less of $27,167 of unamortized debt discount for total principal balance of $980,106 in long-term loans. The loan matured on February 9, 2026, and as such the long term loan has been included in current liabilities.

Contingent Guarantee/ Merger Financing

The carrying balance of the Merger Financing Note as of June 30, 2025, net of principal converted to shares of $1,439,586, was $1,618,575, net of $24,215 in unamortized debt discount. The conversion rate of 90% of the trailing seven - trading day VWAP prior to payment was between $0.16 and $0.18 per share. As of September 19, 2025 the Merger Financing Note was paid in full and the Company recognized $24,215 in amortized debt discount and $23,599 in interest expense.

Tau Agreement – ELOC and Second ELOC Agreement

As of June 30, 2026, there are no shares available under the ELOC (as defined below) and accordingly no further advances are anticipated. Therefore the fair value of the ELOC was deemed to be $0 as of June 30, 2026. In addition, the Company had a receivable of $205,238 under the ELOC, however, since there are no shares available under the ELOC, the receivable was written off the loss was included net in the change in fair value of the Tau agreement. See Note 15 for additional information regarding the fair value method and related disclosures.

As such, as of June 30, 2025 the Company requested advance notices under the at-the-market agreement entered into between the Company and Tau on July 31, 2024 (the “ELOC” or “Tau agreement”) for a total of $2,093,822 which resulted in approximately 1,615,168 shares to be sold by Tau. Tau sold and settled 1,574,263 shares, of which 7,378 were shares transferred by a related party and 1,566,885 were shares issued by the Company, under the ELOC resulting in $1,911,472 of proceeds under the ELOC of which $41,089 remain as stock receivable. Tau purchased the shares from the Company at $2,116,710 resulting in a realized gain of $22,888. As of June 30, 2025, 35,282 all shares issued to Tau towards have been settled.

Promissory Notes

Interest Solutions, LLC. Shares of Common Stock were issuable to Interest Solutions, LLC (“Interest Solutions”) pursuant to a convertible promissory note, dated as of February 9, 2024, in the aggregate principal amount of $275,000 (the “Interest Solutions Note”) at a price per share of $120, subject to adjustment. Accrued interest on the Interest Solutions Note was payable monthly, beginning on June 30, 2024, at a rate of 13% per annum and the Interest Solution Note was to mature on February 9, 2026. Until all payments have been made to the AtlasClearing sellers, interest on the Interest Solutions Note may be paid in cash or shares of Common Stock valued at the then-current conversion price. Thereafter, all accrued interest must be paid in cash. During the year ended June 30, 2026 and 2025, the Company recognized $8,913 and $35,652 in interest expense, respectively. On October 1, 2025, the Company issued 576,616 shares of Common Stock at a conversion price of $0.5627 in full settlement of $275,000 in principal and $49,462 of accrued interest. As of June 30, 2026 and 2025, there was $0 and $315,549, respectively, included in Promissory note payable.

JonesTrading Institutional Services LLC. Up to 3,283 shares of Common Stock were issuable to JonesTrading Institutional Services LLC (“JonesTrading”), pursuant to a convertible promissory note, dated as of February 9, 2024, in the aggregate principal amount of $375,000 (the “JonesTrading Note”) at a price per share of $120, subject to adjustment. Accrued interest on the JonesTrading Note was payable monthly, beginning on June 30, 2024, at a rate of 13% per annum. Until all payments have been made to the AtlasClearing sellers, interest on the Jones Trading Note may be paid in cash or shares of Common Stock valued at the then-current conversion price. Thereafter, all accrued interest must be paid in cash. During the year ended June 30, 2026 and 2025, the Company recognized $8,627 and $48,617, respectively, in interest expenses. On September 16, 2025, the Company and JonesTrading entered into an amendment to the promissory note agreement, whereby the conversion price floor of $2.00 was amended to $0.75. As a result, on September 16, 2025, the Company issued 585,229 shares of Common Stock at a conversion price of $0.75 in full settlement of $375,000 in principal and $63,922 of accrued interest. As of June 30, 2026 and 2025, there was $0 and $430,295, respectively included in Promissory note payable.

Toppan Merrill LLC. The Company issued to Toppan Merrill LLC (“Toppan”) a promissory note, dated as of February 9, 2024, in the aggregate principal amount of $160,025 (the “Toppan Note”). The maturity date of the Toppan Note was February 8, 2026 and the note accrued interest at a rate of 13% per annum. The principal and interest payments due under the note was not payable in shares of Common Stock. The Company paid $180,000 in cash on November 4, 2025 as full repayment of the promissory note. As of June 30, 2026 and 2025, there was $0 and $175,286, respectively, included in Promissory note payable.

Hanire Purchase Agreement: During the year ended June 30, 2026, the Company received $200,000 as a good faith deposit towards the securities purchase agreement entered into on December 31, 2024 between the Company and Hanire, LLC (the “Hanire Purchase Agreement”). As such, the proceeds received are treated as due on demand non interest bearing advances. If terms or repayment and additional funding is not negotiated, the Company expects to refund the good faith deposit. As of June 30, 2026 and 2025, there was $200,000 and $0, respectively included in Promissory note payable

D&O financing: During the year ended June 30, 2026, the Company renewed its Directors and Officers insurance policy and entered into a premium financing agreement to fund the annual premium which is included in Promissory note balance of $230,484 as of June 30, 2026. The agreement requires nine equal monthly payments of $47,128 and provides for an interest rate of 8.75%, for total amount financed of $408,686. The unamortized portion of the insurance premium is recorded within “Prepaid expenses and other current assets” and is being amortized to “General and administrative expense” on a straight-line basis over the one-year policy term.

Convertible Notes

On September 16, 2025, September 19, 2025 and September 23, 2025, the Company entered into separate securities purchase agreements (each, a “September Securities Purchase Agreement”) with certain institutional investors under which the Company agreed to issue and sell, in a private placement, convertible promissory notes (each, a “Convertible Note” and collectively, the “Convertible Notes”) for an aggregate principal amount of $6,000,000, for a gross purchase price of $5,000,000, reflecting a 20% original issue discount, before fees and other expenses. The Convertible Notes did not bear interest, and were to mature on the earlier of six-months from issuance or the date that the Company completes a Qualified Financing (meaning an issuance and sale of capital stock raising gross proceeds of at least $10 million, as defined in the Convertible Notes). The Convertible Notes were convertible into equity, at each holder’s option, at the closing of a Qualified Financing, at the same per share price as the securities sold in the Qualified Financing. The Convertible Notes were subject to customary events of default and related remedies.

The Convertible Notes are within the scope of ASC 470-10 and not an ASC 480 liability. The Company did not elect the ASC 825-10 fair value option. The instrument includes two embedded derivative features—the Conversion upon Qualified Financing and Event of Default acceleration—each meeting the definition of a derivative under ASC 815-15 and therefore requiring bifurcation and separate recognition at fair value. The Convertible Notes were issued at a 20% discount, and the aggregate discount (original issue plus bifurcation-related) will be amortized under ASC 835-30 using the effective interest method. The Convertible Notes did not bear any stated interest, and imputed interest was recognized accordingly. The Convertible Notes are presented as debt, with derivative liabilities separately disclosed and measured at fair value.

The Company recognized the discount of $1,682,154 at issuance consisting of the fair value of the derivative at issuance of $382,154, $1,000,000 originally issued discount and $300,000 of transaction cost paid at closing. On October 8, 2025 in connection with the Equity SPA discussed below, the Company repaid $1,850,000 in cash and converted $4,150,000 of the Convertible Note into the Units sold pursuant to the Equity SPA. As a result, the Company recognized $1,682,154 in amortized debt discount for the year ended June 30, 2026. The balance as of June 30, 2026 fully settled and no amounts remain due under the Convertible Note. The derivative was derecognized as a result of the full settlement of the Convertible Note. See note 15 for additional disclosure regarding fair value of the derivative.

Equity Financing

On October 8, 2025, the Company entered into the Equity SPA with certain institutional investors (each, an “Investor”), including Funicular, pursuant to which the Company agreed to issue and sell, in a private placement, 16,666,666 Units for a purchase price of $0.60 per Unit. Each Unit consists of one share of the Common Stock and one warrant (each, a “Warrant Liability”) to purchase Common Stock. Due to rounding the units were split into16,666,665 shares of Common Stock and 16,666,668 warrants. Of the total investment amount of $10,000,000, $5,850,000 of proceeds were received and $4,150,000 were converted from the Convertible Notes discussed above.

The Warrant Liability are immediately exercisable on a cash basis or exchangeable on a cashless basis and will expire five years from the date of issuance. Each Warrant Liability will be initially exercisable for one share of Common Stock at an initial exercise price of $0.75 per share, subject to adjustment for stock splits, distributions and the like (the “Initial Exercise Price”). The Initial Exercise Price is also subject to potential increase if the Company completes certain subsequent offerings at a price greater than the Initial Exercise Price while the Warrant Liability remain outstanding. At any time after the issuance of the Warrant Liability, the holder of the Warrant Liability may exchange the Warrant Liability on a cashless basis for a number of shares of Common Stock determined by multiplying the total number of shares with respect to which the Warrant Liability is then being exercised by the Black Scholes Value (as defined in the Warrant Liability) divided by the lower of the two closing bid prices of the Common Stock in the two days prior the time of such exercise.

In the event of a Fundamental Transaction (as defined in the Warrant Liability ), the holders of the Warrant Liability will be entitled to receive upon exercise of the Warrant Liability the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrant Liability immediately prior to such Fundamental Transaction. Additionally, as more fully described in the Warrant Liability , the holders of the Warrant Liability will be entitled to receive consideration in an amount equal to the Black Scholes value of the Warrant Liability in connection with a Fundamental Transaction. If the Company fails to timely deliver the shares of Common Stock issuable upon exercise of the Warrant Liability, the Company will be subject to liquidated damages.

Subject to the provisions of the Equity SPA, if, during the 12-month period commencing on the date of the closing, the Company carries out one or more Subsequent Financings (as defined in the Equity SPA), each Investor that purchases $50,000 or more of Units will have the right to participate in an amount up to 100% of such Investor’s investment amount under the Equity SPA in any such securities offered by the Company, subject to certain exceptions.

The Company engaged Dawson James Securities, Inc. as the placement agent (the “Placement Agent”) with respect to the offering of the Restated Note and the Units. The Company agreed to pay the Placement Agent’s fees totaling (i) 4.5% of the aggregate gross proceeds from the sale of the Restated Note, (ii) 6% of the aggregate gross proceeds from the sale of the Units to current or previous investors not introduced to the Company by the Placement Agent and (iii) 7% of the aggregate gross proceeds from the sale of the Units to investors introduced to the Company by the Placement Agent, and to reimburse the Placement Agent’s expenses (subject to a cap). Resulting in total transaction cost paid of $1,228,500. The Company also agreed to issue warrants to purchase up to an aggregate of 1,000,000 shares of Common Stock with a fair value of $334,062 to the Placement Agent and its designees, resulting in total transaction cost of $1,562,562. The fair value of the warrants issued to the Placement Agent was included in the transaction cost and allocated between the Warrant Liability in the amount of $865,659 and the Common Stock in the amount of $696,903 on a pro rated basis.

$500,000 of the Units sold pursuant to the Equity SPA were purchased by Sixth Borough Capital Fund, LP, an entity controlled by Robert D. Keyser, Jr., who is a member of the Company’s board of directors and the Chief Executive Officer of the Placement Agent.

The closings of the issuance and sale of the Restated Note and the Units occurred on October 9th through October 14th, 2025, and the Company issued an aggregate of 16,666,665 shares of Common Stock and 16,666,668 Warrant Liability . Total proceeds were allocated between the warrants and the shares included in the units using the residual method with $5,540,000 fair value allocated to the warrant liability and $4,460,000 allocated to equity.

At the closings, the Company entered into a registration rights agreement with the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed, among other things, to file one or more registration statements covering the resale of the shares of Common Stock included as part of the Units, as well as the shares issuable upon conversion of the Restated Note or exercise of the Warrant Liability. The Company will be subject to liquidated damages if it fails to meet certain conditions set forth in the Registration Rights Agreement.

The Company evaluated the classification of the Warrant Liability , Common Stock, and the Registration Rights Agreement issued or entered into pursuant to the Equity SPA. The assessment was performed under the relevant guidance in ASC 480-10, ASC 815-10, ASC 815-40, and ASC 825-20, to determine whether these instruments should be accounted for as freestanding or embedded financial instruments, and whether they meet the criteria for equity or liability classification. The Warrant Liability are classified as freestanding derivative financial liabilities within the scope of ASC 815-10 and ASC 815-40, measured initially and subsequently at fair value through earnings. The issued shares of Common Stock are freestanding equity instruments. The Registration Rights Agreement is a freestanding contingent obligation within the scope of ASC 825-20, with potential liability recognition contingent on probability and estimability under ASC 450-20. See Note 15 for additional disclosure regarding fair value of the Warrant Liability .

Winston & Strawn Agreement

Up to $2,500,000 in shares of Common Stock were issuable to Winston & Strawn LLP (“Winston & Strawn”) pursuant to a subscription agreement, dated as of February 9, 2024, between Winston & Strawn and the Company (the “Winston & Strawn Agreement”). Pursuant to the Winston & Strawn Agreement, the Company was to issue $2,500,000 worth of shares of Common Stock as payment for legal services, in three equal installments of $833,333 beginning on August 9, 2024. As of June 30, 2025, the amount is included in Winston & Strawn Agreement as a liability of $2,489,945. Due to the nature of the settlement terms, the Winston & Strawn Agreement was deemed to be a derivative liability to the Company as of June 30, 2025 under ASC 480. Change in fair value of the subscription agreement are measured at each reporting period with change reported in earnings. See valuation approach and further disclosure on Note 15.

On January 26, 2026, the Company and Winston & Strawn entered into a settlement agreement. The Company agreed to provide Winston & Strawn with cash and shares of the Company’s Common Stock. The Company paid $1,000,000 in cash, and issued a total of 1,000,000 shares of the Company Common Stock with a deemed value of $750,000 and a fair value of $260,700 based on the closing stock price on January 26, 2026 resulting in a loss of $570,300 loss on settlement. As of June 30, 2026 the Company has complied with the terms and has fully settled the obligations with Winston & Strawn.

Subordinated borrowings

The Company has entered into FINRA-approved subordinated loan agreements totaling $1,930,000. The agreements consist of (i) six legacy subordinated notes totaling $650,000 with current and former officers, directors, and related parties that bear at 5% per annum, and (ii) six subordinated loan agreements totaling $1,280,000 funded in October 2023. The October 2023 subordinated loans were renewed through amendments approved by FINRA and bear interest at 10% per annum, payable quarterly. The amended October 2023 subordinated notes mature in October 2026.

The subordinated loan agreements generally mature annually and may be renewed upon agreement of the parties and approval by FINRA. Management currently anticipates that these borrowings will continue to be renewed as they mature; however, future renewals are subject to regulatory approval and the Company’s capital requirements.

The loan principal and related accrued interest are unsecured and subordinated in right of payment to all present and future creditors of the Company. The subordinated loans are allowable in the computation of net capital under Rule 15c3-1 of the Securities Exchange Act of 1934. To the extent the subordinated borrowings are required for compliance with minimum net capital requirements, they may not be repaid without FINRA approval.