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Convertible Notes Payable | 12 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
Convertible Notes Payable | Note 9 — Convertible Notes Payable Securities Purchase Agreement On July 15, 2025, the Company entered into Securities Purchase Agreements (the “July 2025 SPAs”) with two unaffiliated accredited investors (“July 2025 Lenders”), pursuant to which the Company issued promissory notes (the “July 2025 Notes”) to the July 2025 Lenders in the aggregate principal amount of $354,200, which includes an aggregate original issue discount of $46,200, for a purchase price of $308,000. The Company incurred an additional $8,000 in fees related to this transaction which is capitalized as part of the debt issuance cost and amortized over the term of the July 2025 Notes. The July 2025 Notes bear interest at a one-time charge of 12% applied on the issuance date, mature on May 15, 2026, and is repayable in five monthly payments commencing January 15, 2026. The July 2025 Notes are convertible into shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), solely upon an event of default, at a conversion price equal to 75% of the lowest trading price during the ten trading days prior to conversion. The Company also entered into an irrevocable transfer agent instructions letter with its transfer agent in connection with the July 2025 Notes. The proceeds from the issuances of the July 2025 Notes were used for general working capital purposes. The July 2025 Lenders have piggyback registration rights and have agreed not to engage in short sales of the Company’s common stock during the term of the July 2025 Notes. The July 2025 Notes include customary representations, warranties, covenants, and default provisions. The Company may prepay the July 2025 Notes within the first 180 days. The loan pursuant to the July 2025 Notes closed and funded on July 17, 2025. For the year ended September 30, 2025 and 2024, total amortized debt issuance cost of $8,737 and $0 was included in interest expense on the accompanying consolidated statements of operations, respectively. For the year ended September 30, 2025 and 2024, total interest expense $10,626 and $0 was included in interest expense on the accompanying consolidated statements of operations, respectively. At September 30, 2025 and 2024, the balance of the July Notes of $308,737 and $0, respectively, recorded in convertible notes payable on the accompanying balance sheets, includes $45,463 and $0, respectively of unamortized debt issuance cost. Standby Equity Purchase Agreement - Pre Paid Advance In connection with the SEPA (See Note 11), and subject to the condition set forth therein, the Investor advanced to the Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of $5.0 million (the “Pre-Paid Advance”). The first Pre-Paid Advance was disbursed on July 25, 2025 with respect to $3.0 million and the balance of $2.0 million was disbursed on September 11, 2025 upon the registration statement registering the resale of the shares of common stock issuable under the SEPA being declared effective. The purchase price for the Pre-Paid Advance is 94% of the principal amount of the Pre-Paid Advance. Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate equal to 6.0%, subject to an increase to 18% upon an event of default as described in the Convertible Notes. The maturity date is 12-months after the closing of each tranche of the Pre-Paid Advance. The Investor may convert the Convertible Notes into shares of the Company’s common stock at a conversion price equal to the lower of $10.00 or 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion (the “Conversion Price”), which in no event may the Conversion Price be lower than $1.00 (the “Floor Price”) provided, however, that the Floor Price shall be adjusted (downwards only) to equal 20% of the average VWAP for the five (5) Trading Days immediately prior to the earlier of (i) date of effectiveness of the Registration Statement, (ii) the six-month anniversary of the date of the SEPA. Notwithstanding the foregoing, the Company may reduce the Floor Price to any amounts set forth in a written notice to the Holder; provided that such reduction shall be irrevocable and shall not be subject to increase thereafter. In addition, upon the occurrence and during the continuation of an event of default, The Convertible Notes is a legal debt obligation with a variable-share conversion feature that ensures a fixed monetary return to the holder, thus qualifying as a liability under ASC 480-10. the Note remains a liability after issuance and the instrument is remeasured after initial recognition, with changes in fair value recognized in earnings each reporting period until settlement, modification, or extinguishment, consistent with the liability-classified model. As of September 30, 2025, the par value of the notes was $5,000,000 and the fair value of the notes was $4,552,653. For the year ended September 30, 2025 and 2024, total interest expense $39,288 and $0 was included in interest expense on the accompanying consolidated statement of operations, respectively. The Convertible notes were valued using unobservable inputs that are not corroborated by market data (Level 3). The valuation is based on Monte Carlo Simulation to simulate weekly stock prices through maturity. The enterprise value is then allocated to each class of outstanding shares and convertible notes based on an option pricing model where the value for each class is driven by the current value and expected volatility of the underlying equity value. The key assumptions used to value the convertible notes as of September 30, 2025:
Schedule of key assumptions used to value the convertible notes |  |  |  |
Stock Price |  | $ | 9.53 |
Equity Volatility |  |  | 52.0 | %
Discount Rate |  |  | 41.0 | %
Risk free rate of return |  |  | 3.70 | %
Term to maturity (years) |  |  | 0.82 |
The following table presents changes of the convertible notes with significant unobservable inputs (Level 3) as of September 30, 2025:
Schedule of changes of the convertible notes |  |  |  |
|  | Convertible Debentures
Balance at October 1, 2024 |  | $ | — |
Proceeds received |  |  | 4,700,000 |
Change in fair value |  |  | (147,347 | )
Balance at September 30, 2025 at fair value |  | $ | 4,552,653 |
July notes (at amortized cost) |  |  | 308,737 |
Convertible notes payable |  | $ | 4,861,390 |

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