NOTE 4 – DEBT

Related Party Debt - Salkind Loans

During September and December 2025, the Company entered into two individual short-term unsecured loans with Dr. Gene Salkind, the Company’s Board Chair, for working capital purposes (2025 Salkind Loans). Total gross borrowings under the 2025 Salkind Loans were $250,000 in cash proceeds, and an original issue discount (OID) of $25,000, along with 25,000 shares of restricted common stock valued at $31,250, for a total debt discount recorded of $56,250, with maturity dates of December 31. 2026, as amended, at which time all principal and OID is due and payable. Principal of $100,000 is convertible at any time prior to the maturity date at a conversion price of $1.00 per common share. Principal of $100,000 remains outstanding at September 30, 2026.

During the nine months ended September 30, 2026, Dr. Salkind loaned the Company an additional $175,000 in cash, which is due and payable on December 31, 2026, as amended (2026 Salkind Loans). Payment of an additional $75,000 of OID associated with the 2026 Salkind Loans is also due December 31, 2026. The full principal of $175,000 and OID of $25,000 remain outstanding at September 30, 2026.

For the three months ended September 30, 2026 and 2025, the Company recognized approximately $25,000 and $16,000, respectively, in interest expense related to the amortization of debt discount under the 2025 and 2026 Salkind Loans. For the nine months ended September 30, 2026, and 2025, the Company recognized approximately $73,000 and $17,000, respectively, in interest expense related to the amortization of debt discount. As of September 30, 2026, and December 31, 2025, total principal outstanding on the 2025 and 2026 Salkind Loans was approximately $325,000 and $275,000, respectively, and total unamortized debt discount was approximately $25,000 and $23,000, respectively.

Merchant Agreements

During the year ended December 31, 2025, the Company entered into five individual agreements with a Merchant Lender for the purchase and sale of future receivables (the 2025 Merchant Agreements). The 2025 Merchant Agreements were issued in exchange for total gross cash funding of approximately $1,132,000, of which approximately $457,000 represented cash proceeds, net of fees, and the balance applied by the Merchant Lender as full settlement of other outstanding obligations with the Merchant Lender, net of other fees. Total principal remaining outstanding on the 2025 Merchant Agreements at December 31, 2025, was approximately $586,000, and unamortized debt discount outstanding was approximately $163,000. Obligations under the 2025 Merchant Agreements were settled in full during the nine months ended September 30, 2026. The Company recognized approximately $12,000 and $163,000 in interest expense associated with the amortization of the debt discounts under the 2025 Merchant Agreements, for the three and nine months ended September 30, 2026, respectively, and approximately $135,000 and $199,000 in interest expense for the three and nine months ended September 30, 2025.

During the nine months ended September 30, 2026, the Company entered into three agreements for the purchase and sale of future receivables (2026 Merchant Agreements) with the same financial institution in exchange for gross cash fundings of approximately $846,000, of which approximately $313,000 represented cash proceeds, net of fees, and the balance being applied by the Merchant Lender as full settlement of other Merchant Agreements outstanding at the time of the fundings. In connection with the 2026 Merchant Agreements fundings, and as additional consideration, the Company issued a total of 17,835 shares of its common stock to the Merchant Lender, the fair value of which was equal to 5% of the new principal issued, or approximately $17,000. The Company recorded total debt discount under the 2026 Merchant Agreements of approximately $305,000, and recognized approximately $102,000 and $215,000, respectively, in interest expense associated with the amortization of debt discount for the three and nine months ended September 30, 2026. Total principal remaining outstanding on the 2026 Merchant Agreements at September 30, 2026 was approximately $487,000, and unamortized debt discount outstanding was approximately $90,000.

2025 Promissory Notes

In March 2025, the Company issued a promissory note with a financial institution (Lender One) in the principal amount of $62,060 with an OID of approximately $9,000 (2025 Lender One Promissory Note One). Interest is charged on the principal at 10% upon issuance of the promissory note, totaling $6,206, and is payable, along with principal, in ten individual payments commencing April 15, 2025, through the maturity date of January 15, 2026, of $6,827 each. In addition to the OID, the Company paid $4,303 in issuance costs associated with the 2025 Lender One Promissory Note One. The Company recognized approximately $4,000 and $7,000 in interest expense for the three and nine months ended September 30, 2025, respectively, associated with the amortization of the debt discount, and approximately $2,000 in interest expense for the nine months ended September 30, 2026. Solely upon an event of default, and at the option of the holder, all amounts outstanding under the 2025 Lender One Promissory Note One are convertible into shares of the Company’s common stock. All obligations under the 2025 Lender One Promissory Note One were paid in full during the nine months ended September 30, 2026.

On July 8, 2025, and July 17, 2025, the Company issued two individual convertible promissory notes with two third-party lenders (July 2025 Lenders) in principal amounts of $156,000 and $258,750 (July 2025 Promissory Notes), with Maturity Dates of April 30, 2026, and July 17, 2026, respectively. Interest is charged on the principal at 10% per annum, and is payable, along with the $156,000 principal, in full at the Maturity Date of April 30, 2026. Interest under the $258,750 promissory note of $25,875 was due and payable upon execution of the promissory note, and principal is due at various dates and amounts commencing in January 2026 through July 17, 2026. The Company paid a total of $30,000 in issuance costs associated with the July 2025 Promissory Notes and OID of $33,250 associated with the $258,750 July 2025 Promissory Note, both recorded as a debt discount. Solely at the option of the Holder, all outstanding obligations under the July 2025 Promissory Notes become convertible, per terms of the agreements, into shares of the Company’s common stock. The Company made an early repayment on the $156,000 promissory note during the six months ended June 30, 2026, resulting in an early termination fee of approximately $34,000 and the reversal of remaining unamortized debt discount of approximately $5,000, which was recorded as loss on debt extinguishment on the accompanying consolidated statement of operations. The Company recognized approximately $5,000 and $17,000 in interest expense associated with amortization of the debt discount under the $258,750 promissory note for the three and nine months ended September 30, 2026, respectively. No principal remains outstanding at September 30, 2026.

On September 15, 2025, the Company issued a promissory note in the principal amount of $127,650, including an OID of $27,650 (September 2025 Promissory Note). Interest is charged on the principal at 12% upon issuance of the September 2025 Promissory Note, totaling $15,318, and is payable, along with principal, at various dates and amounts commencing in March 2026 through the Maturity Date in July 2026. Solely upon an event of default, and at the option of the Holder of the September 2025 Promissory Note, all outstanding amounts become convertible into shares of the Company’s common stock. The Company recognized $15,000 in interest expense for the nine months ended September 30, 2026, associated with amortization of the debt discount. No principal remains outstanding at September 30, 2026.

2026 Promissory Notes

On January 14, 2026, the Company issued a convertible promissory note in the principal amount of $258,750, including OID of $33,750 to an unrelated third-party (January 2026 Note). The January 2026 Note also includes a one-time interest charge on the Principal Amount of $25,875 based on a rate of 10% per annum, due at the issue date. Principal and OID on January 2026 Note is payable in cash in various monthly amounts commencing in July 2026 until maturity date in January 2027. The Company paid approximately $19,000 in issuance costs and recorded a total debt discount of $52,250. Solely at the option of the Holder, and commencing upon an event defined in the January 2026 Note, all amounts outstanding are convertible into shares of the Company’s common stock. On July 17, 2026, $40,000 of principal outstanding under the January 2026 Note as discussed in Note 5, was converted into 80,000 of common stock at a conversion rate of $0.50 per share. The Company recognized approximately $16,000 and $45,000 in interest expense for the three and nine months ended September 30, 2026, respectively, associated with the amortization of the debt discount. The principal amount of $86,000 remains outstanding at September 30, 2026, along with $7,000 of unamortized debt discount.

On March 9, 2026, the Company issued a convertible promissory note in the principal amount of $115,000, including OID of $15,000 to an unrelated third-party (March 2026 Note). The March 2026 Note also includes a one-time interest charge on the principal amount of $11,500 based on a rate of 10% per annum, due at the issue date. Principal and OID on the March 2026 Note are payable in cash on the maturity date of March 9, 2027. The Company paid $11,000 in issuance costs and recorded a total debt discount of $26,000. Solely at the option of the Holder and commencing upon an event defined in the March 2026 Note, all amounts outstanding are convertible into shares of the Company’s common stock. The Company recognized approximately $7,000 and $15,000 in interest expense for the three and nine months ended September 30, 2026, respectively, associated with the amortization of the debt discount. The principal amount of $91,750 remains outstanding at September 30, 2026, along with approximately $11,000 of unamortized debt discount.

In June 2026, the Company issued a convertible promissory note in the principal amount of $258,750, including OID of $33,750 to an unrelated third-party (June 2026 Note). The June 2026 Note also includes a one-time interest charge on the Principal Amount of $25,875 based on a rate of 10% per annum, due at the issue date. Principal and OID on the June 2026 Note is payable in cash in various monthly amounts commencing in December 2026 until the maturity date in June 1, 2027. The Company paid approximately $18,000 in issuance costs and recorded a total debt discount of $51,250. Solely at the option of the Holder, and commencing upon the occurrence of events defined in the June 2026 Note, all amounts outstanding are convertible into shares of the Company’s common stock. The Company recognized approximately $19,000 and $22,000 in interest expense for the three and nine months ended September 30, 2026, associated with the amortization of the debt discount. The full principal amount remains outstanding at September 30, 2026, along with $29,000 of unamortized debt discount.

On July 10, 2026, the Company issued a promissory note with a financial institution in the principal amount of $180,550 with an OID of approximately $23,550. Interest is charged on the principal at 12% upon issuance of the promissory note, totaling $21,665, and is payable, along with principal, in five individual payments commencing January 15, 2027, through the maturity date of May 15, 2027, of which $101,108 is due January 15, 2027, and four equal monthly payments of $25,277 each due thereafter. In addition to the OID, the Company paid $10,000 in issuance costs, recorded as additional debt discount. The Company recognized approximately $9,000 in interest expense for the three and nine months ended September 30, 2026, associated with the amortization of the total debt discount, with unamortized debt discount of approximately $24,000 outstanding at September 30, 2026. Solely upon an event of default, and at the option of the holder, all amounts outstanding are convertible into shares of the Company’s common stock. All obligations under the note were outstanding at September 30, 2026.

On July 23, 2026, the Company issued a promissory note with a financial institution in the principal amount of $258,750 with an OID of approximately $33,750. Interest is charged on the principal at 10% upon issuance of the promissory note, totaling $25,875, and is payable, along with principal, in seven individual payments commencing January 23, 2027, through the maturity date of July 23, 2027, of which $142,313 is due January 23, 2027, and six equal monthly payments of $23,719 each due thereafter. In addition to the OID, the Company paid $18,500 in issuance costs, recorded as additional debt discount. The Company recognized approximately $6,000 in interest expense for the three and nine months ended September 30, 2026, associated with the amortization of the total debt discount, with unamortized debt discount of approximately $46,000 outstanding at September 30, 2026. Solely upon an event of default, and at the option of the holder, all amounts outstanding are convertible into shares of the Company’s common stock. All obligations under the note were outstanding during the nine months ended September 30, 2026.

On September 18, 2026, the Company issued a promissory note with a financial institution in the principal amount of $115,000 with an OID of approximately $15,000. Interest is charged on the principal at 10% upon issuance of the promissory note, totaling $21,665, and is payable, along with principal, in five individual payments commencing March 20, 2027, through the maturity date of July 20, 2027, of $23,000 each. In addition to the OID, the Company paid $6,000 in issuance costs, recorded as additional debt discount. The Company recognized has approximately $1,000 in interest expense for the three and nine months ended September 30, 2026, associated with the amortization of the total debt discount, with unamortized debt discount of approximately $20,000 outstanding at September 30, 2026. Solely upon an event of default, and at the option of the holder, all amounts outstanding are convertible into shares of the Company’s common stock. All obligations under the note were outstanding at September 30, 2026.

On September 28, 2026, the Company issued a promissory note with a financial institution in the principal amount of $175,500 with an OID of approximately $22,500. Interest is charged on the principal at 10% upon issuance of the promissory note, totaling $17,250, and is payable, along with principal, in six individual payments commencing March 28, 2027, through the maturity date of September 28, 2027, of which $94,875 is due March 28, 2027, and $15,813 due monthly thereafter. In addition to the OID, the Company paid $6,000 in issuance costs, recorded as additional debt discount. The Company recognized approximately $1,000 in interest expense for the three and nine months ended September 30, 2026, associated with the amortization of the total debt discount, with unamortized debt discount of approximately $34,000 outstanding at September 30, 2026. Solely upon an event of default, and at the option of the holder, all amounts outstanding are convertible into shares of the Company’s common stock. All obligations under the note were outstanding at September 30, 2026.

2025 Convertible Loan Agreements

During the year ended December 31, 2025, the Company entered into eight other individual Subscription Agreements and Convertible Promissory Notes for a total of $1,295,000 in principal (2025 Convertible Notes). The unsecured loans were issued with a total of 431,682 shares of restricted common stock as original issue discount, fair valued at approximately $597,000. Principal on the 2025 Convertible Notes is automatically convertible at a conversion price of $1.00 per common share on the maturity dates ranging from March 2026 to September 2026. Approximately $487,000 of debt discount was amortized as interest expense for the nine months ended September 30, 2026. During the nine months ended September 30, 2026, a total of $1,295,000 in convertible debt principal was converted into 1,295,000 shares of restricted common stock at a per share conversion rate of $1.00.

2026 Convertible Loan Agreement

During the nine months ended September 30, 2026, the Company entered into a Subscription Agreement and Convertible Promissory Note for $30,000 in principal (2026 Convertible Note). The unsecured loan was issued with 10,000 shares of restricted common stock as debt discount, fair valued at $9,500. Principal on the 2026 Convertible Note is automatically convertible at a conversion price of $1.00 per common share on the maturity date in September 2026. The Company recognized approximately $3,000 and $10,000 in interest expense associated with the amortization of the debt discount for the three and nine months ended September 30, 2026, respectively, with all obligations under the note settled in full as of September 30, 2026.

Other Debt

In August 2026, the Company entered a financing arrangement with their Directors and Officers (D&O) insurance provider to fund the annual $150,000 premium related to the Company’s D&O insurance policy. The Company paid $30,000 in premium up front and financed the remaining $120,000 in premium owed at an annual financing rate of 7.48%, which includes nine monthly payments of premium principal and interest of $13,752 commencing September 30, 2026, with final payment due May 31, 2027.

Following is a summary of debt outstanding at September 30, 2026, and December 31, 2025:

The weighted average interest rate on short term borrowings outstanding at September 30, 2026, and December 31, 2025, was 31% and 26%, respectively.