Note Purchase Agreement dated June 24, 2024

On June 24, 2024, the Company entered into and closed a note purchase agreement with Streeterville Capital, LLC (the "Lender") which provided for the issuance of a $2,360,000 principal amount senior secured promissory note (the “2024 Note”). The 2024 Note carried an original issue discount of $350,000 and the Company agreed to pay $10,000 to the lender to cover its transaction costs, which were deducted from the proceeds of the 2024 Note resulting in a total of $2,000,000 being funded to the Company at closing. The proceeds were used for general working capital.

 
The principal amount of the 2024 Note was due 18 months following the date of issuance. Interest under the 2024 Note accrued at a rate of nine percent (9%) per annum. All repayments of principal due under the 2024 Note were subject to an exit fee of seven percent (7%) of the principal amount being repaid (the “Exit Fee”). Commencing six months after the date of issuance of the 2024 Note (the “Redemption Start Date”), Lender had the right to redeem up to $270,000 of principal amount under the 2024 Note each month which amount plus the Exit Fee will be due and payable three (3) business days after Lender’s delivery of a redemption notice to the Company. 
 

The 2024 Note was secured by a lien on substantially all of the Company’s assets and properties and the Company’s obligations under the 2024 Note were guaranteed by Pistol Star, Inc. (“Pistol”), a wholly owned subsidiary of the Company. The 2024 Note could be prepaid in whole or in part without penalty at any time.  In the event that the Company received any proceeds in connection with any fundraising or financing transaction (including any warrant exercises), it would be required to make a mandatory prepayment equal to the lesser of (i) forty percent (40%) of the amount raised in such transaction and (ii) the full amount due under the 2024 Note.

In the third quarter of 2024, the Company received gross proceeds of approximately $1.9 million in connection with a financing transaction (see Note 12 Stockholders' Equity). In accordance with the terms of the 2024 Note, 40% of the proceeds received, or approximately $762,600, was used to prepay amounts due under the 2024 Note. 

Between January and September 2025, the Company entered into a number of Exchange Agreements with the holder of the 2024 Note pursuant to which it partitioned from the 2024 Note new promissory notes in the aggregate principal amount of $1,459,000 reducing the outstanding principal amount of the 2024 Note to approximately $338,400. On October 27, 2025, the Company entered into two exchange agreements with the Lender. Pursuant to these exchange agreements, the Company and Lender agreed to (i) partition from the 2024 Note two new Promissory Notes (the “2025 Partitioned Notes”) in the original principal amounts of $261,841 and $66,150, respectively, (ii) cause the outstanding balance of the 2024 Note to be reduced by $327,991, the aggregate principal amount of the 2025 Partitioned Notes, and (iii) exchange the 2025 Partitioned Notes for an aggregate of 42,903 shares of the Company’s Common Stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026). As a result of these exchange agreements, the 2024 Note has been paid in full.

Note Purchase Agreement dated September 30, 2025

On September 30, 2025, the Company entered into and closed a note purchase agreement with the Lender which provided for the issuance of a $1,130,000 principal amount senior secured promissory note (the “2025 Note”). The 2025 Note carries an original issue discount of $125,000 and the Company agreed to pay $5,000 to the Lender to cover its transaction costs, which were deducted from the proceeds of the 2025 Note resulting in a total of $1,000,000 being funded to the Company at closing. The proceeds will be used for general working capital.

The principal amount of the 2025 Note is due 18 months following the date of issuance. Interest under the 2025 Note accrues at a rate of nine percent (9%) per annum. All repayments of principal due under the 2025 Note will be subject to an exit fee of seven percent (7%) of the principal amount being repaid (the “Exit Fee”). Commencing six months after the date of issuance of the 2025 Note (the “Redemption Start Date”), Lender shall have the right to redeem up to $135,000 of principal amount under the 2025 Note each month which amount plus the Exit Fee will be due and payable three (3) business days after Lender’s delivery of a redemption notice to the Company. At the end of each month following the Redemption Start Date, if the Company has not reduced the outstanding balance under the 2025 Note by at least $135,000, then by the fifth (5th) day of the following month, the Company must either pay to Lender the difference between $135,000 and the amount, if any, redeemed in such month plus the Exit Fee, or the outstanding balance due under the Note will automatically increase by one percent (1%). There have been no redemptions by the Lender.
 
The 2025 Note is secured by a lien on substantially all of the Company’s assets and properties and the Company’s obligations under the 2025 Note are guaranteed by Pistol. The 2025 Note can be prepaid in whole or in part without penalty at any time. In the event that the Company receives any proceeds in connection with any fundraising or financing transaction (including any warrant exercises), it will be required to make a mandatory prepayment equal to the lesser of (i) forty percent (40%) of the amount raised in such transaction and (ii) the full amount due under the 2025 Note.

In connection with the October 27, 2025 warrant exercise agreement (see Note 12 Stockholders' Equity), the Company prepaid approximately $455,000 of the amount due under the 2025 Note. 

On July 28, 2026, the Company entered into an Exchange Agreement (the “2026 Exchange Agreement”) with the Lender. Pursuant to the 2026 Exchange Agreement, the Company and Lender agreed to (i) partition from the 2025 Note a new Promissory Note (the “July Partitioned Note”) in the original principal amount of $200,000, (ii) cause the outstanding balance of the 2026 Note to be reduced by $200,000 and (iii) exchange the July Partitioned Note for 43,308 shares of the Company’s Common Stock.

On August 10, 2026, the Company entered into a second exchange agreement with the Lender. Pursuant to this exchange agreement, the Company and Lender agreed to (i) partition from the 2025 Note a new Promissory Note (the “August Partitioned Note”) in the original principal amount of $150,000, (ii) cause the outstanding balance of the 2025 Note to be reduced by $150,000 and (iii) exchange the August Partitioned Note for 37,792 shares of the Company’s Common Stock.

On September 29, 2026, the Company entered into four separate exchange agreements with the Lender. Pursuant to these exchange agreements, the Company and Lender agreed to (i) partition from the 2025 Note four new Promissory Notes (the “Partitioned Notes”) in the aggregate original principal and interest amount of $416,316, (ii) cause the outstanding balance of the 2025 Note to be paid in full and (iii) exchange the Partitioned Notes for 247,805 shares of the Company’s Common Stock.