NOTE 5 — LONG-TERM DEBT AND NOTES PAYABLE

The Company’s debt instruments are as follows:

Private Notes Payable, related party

On December 9, 2025, the Company received proceeds of $200,000 from the issuance of two promissory notes which were issued to a director, and the chief financial officer respectively. The notes have a maturity date of December 31, 2028 and carry a 15% interest rate for which is to be paid quarterly beginning March 31, 2026. During the three months ended March 31, 2026, the Company received $100,000 in proceeds from an additional related party under the same terms.

During the three months ended March 31, 2026, officers, directors and other employees agreed to structure an aggregate of $3,446,454 of salary and bonuses into promissory notes. The notes carry interest at 15%, payable quarterly, and mature on July 1, 2029.

Accrued interest on the promissory notes was $11,454 and $3,461 as of March 31, 2026 and December 31, 2025, respectively.

Convertible Notes Payable

In 2025, the Company and its Private Note Payable Investors (the “Exchange Investors”) entered into exchange agreements (the “2025 Exchange Agreements”) whereby the Exchange Investors exchanged their promissory notes and warrants for convertible promissory notes (the “Convertible Notes”). The principal amounts of the Convertible Notes were determined by adding the original principal amount of the promissory notes and warrants.

The Convertible Notes mature on January 31, 2028, and accrue interest at a rate of 7.5% per annum. The Convertible Notes may be prepaid by the Company at any time, in whole or in part, without any premium or penalty. The Convertible Notes may be converted by the holders at any time after issuance into shares of Class A Common Stock at a conversion price equal to the greater of (a) $0.25 per share or (b) 90% multiplied by the average of the three lowest VWAPs of the Class A Common Stock over the ten trading days prior to conversion. If, at any time the Convertible Notes are outstanding, the Company issues or sells Class A Common Stock for no consideration or at a price lower than the then-current Conversion Price, then the conversion price of the Convertible Notes will be automatically reduced to the amount of consideration per share received by the Company in such sale or offering. In addition, so long as any Convertible Notes are outstanding, if the Company issues any security on terms more favorable than the Convertible Notes, then the Company must notify the holder and such more favorable term shall become a part of the Convertible Note, at the holder’s option. In accordance with ASC 815, the Company determined that the embedded conversion option in the Convertible Notes should be bifurcated as a derivative liability.

As of March 31, 2026 and December 31, 2025, there was an outstanding principal balance of $3,050,000 and $2,315,000, respectively, on the Convertible Notes, including $1,250,000 with related parties at both periods.

On July 11, 2025, the Company entered into a Note Purchase Agreement (the “NPA”) with White Lion Capital, LLC ("White Lion"), as subsequently amended, pursuant to which the Company issued convertible promissory notes (collectively, the “White Lion Notes”). The White Lion Notes bear interest at a rate of 5.0% per annum and were issued at a 6% original issue discount, with each $600,000 principal amount issued in exchange for cash proceeds of $564,000. White Lion may convert amounts outstanding under the applicable White Lion Note into shares of the Company's Class A Common Stock at a conversion price generally equal to the greater of (i) $0.25 or (ii) the lower of (A) the Fixed Conversion Price (as defined below) or (B) 90% multiplied by the lowest closing price of the Class A Common Stock during the ten trading days prior to the subject conversion date (representing a discount rate of 10%). The “Fixed Conversion Price” is the lower of (i) $0.75 per share and (ii) the closing price of the Class A Common Stock on the 60th day following the date the SEC declared the applicable resale registration statement effective. The conversion price is subject to equitable adjustment for stock splits, stock dividends, rights offerings, combinations, recapitalizations, reclassifications, extraordinary distributions and similar events. 

White Lion is subject to a beneficial ownership limitation of 4.99% of the outstanding Class A Common Stock, which may be increased to 9.99% at White Lion's election in accordance with the applicable White Lion Note. In accordance with ASC 815, the Company determined that the embedded conversion features of the White Lion Notes should be bifurcated and accounted for as derivative liabilities at fair value on a recurring basis, with the initial fair value recorded as a debt discount. See Note 7. 

On January 12, 2026, the Company issued an additional White Lion Note with a principal amount of $600,000 for cash proceeds of $564,000. The note matures on July 11, 2027 and has a conversion price equal to the greater of (i) $0.25 or (ii) the lower of (A) the Fixed Conversion Price (as defined below) or (B) 90% multiplied by the lowest closing price of the Class A Common Stock during the ten trading days prior to the subject conversion date (representing a discount rate of 10%). Its Fixed Conversion Price is determined on the same basis as the July 11, 2025 note.

On February 4, 2026, the Company issued an additional White Lion Note with a principal amount of $600,000 for cash proceeds of $564,000 as the second closing under the NPA. The note matures on January 1, 2027 and has a conversion price equal to the greater of (i) $0.20 or (ii) the lower of (A) the Fixed Conversion Price (as defined below) or (B) 90% multiplied by the lowest closing price of the Common Stock during the ten (10) Trading Days prior to the subject Conversion Date (representing a discount rate of 10%), provided however, in the event that such Conversion Price would be less than $0.20 per share (the “Floor Price”), in any instance, then the applicable Conversion Price for such conversion shall be equal to the Floor Price. Its Fixed Conversion Price is the lower of (i) $0.75 per share and (ii) the closing price of the Common Stock on the 60th day following the date the SEC declared the applicable resale registration statement effective.

On March 6, 2026, the Company issued an additional White Lion Note with a principal amount of $600,000 for cash proceeds of $564,000. The note matures on April 1, 2027 and has a conversion price equal to the greater of (i) $0.10 or (ii) the lower of (A) the Fixed Conversion Price (as defined below) or (B) 90% multiplied by the lowest closing price of the Common Stock during the ten (10) Trading Days prior to the subject Conversion Date (representing a discount rate of 10%), provided however, in the event that such Conversion Price would be less than $0.10 per share (the “Floor Price”). For this note, the Fixed Conversion Price is the lower of (i) the closing price of the Common Stock on the six-month anniversary of the issuance date and (ii) the closing price of the Common Stock on the 60th day following the date the SEC declared the applicable resale registration statement effective.

As of March 31, 2026 and December 31, 2025, the balance on the White Lion Notes was $1,800,000 and $600,000, respectively with an unamortized discount balance of $541,171 and $153,513, respectively which will be amortized to interest expense through the maturity date. The Company amortized $237,006 of discount during the three months ended March 31, 2026 related to the White Lion notes.

During the three months ended March 31, 2026, the Company issued an aggregate of 3,330,826 shares of Class A Common Stock for the conversion of $1,065,000 in convertible notes principal and $47,263 of accrued interest pursuant to the terms of the convertible notes described above.

Accrued interest on the convertible promissory notes was $7,560 and $9,153 as of March 31, 2026 and December 31, 2025, respectively.

Merchant Cash Advances

On November 18, 2025, the Company entered into a master receivables purchase agreement with a third party. The Company received cash proceeds of $736,250 and will repay an aggregate of $1,038,500 to the lender on a weekly basis through July 2026. As of March 31, 2026 and December 31, 2025 the remaining balance owed on this advance was $519,250 and $865,417, respectively.

On December 19, 2025, the Company entered into a master receivables purchase agreement with a third party. The Company received cash proceeds of $900,000 and will repay an aggregate of $1,206,000 to the lender on a weekly basis through December 2026. As of  March 31, 2026 and December 31, 2025 the remaining balance owed on this advance was $861,429 and $1,157,760, respectively.

As of March 31, 2026 and December 31, 2025, there was $256,578 and $505,841 of unamortized discount related to the merchant cash advances, and the Company recognized $249,263 and $208,244 of amortization of debt discount related to the advances during the three months ended March 31, 2026 and 2025, respectively.

Future Maturities of Long-term debt

The following summarizes the Company’s maturities of all debt instruments described above: