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Loans Payable – Related Parties
 9 Months Ended
Sep. 30, 2025
Loans Payable – Related Parties [Abstract]  
LOANS PAYABLE – RELATED PARTIES

NOTE 6 – LOANS PAYABLE – RELATED PARTIES

 

The Company’s loans payable – related parties consisted of the following:

 

During the twelve months ended September 30, 2024, the Company issued promissory notes in the aggregate principal of $1,105,639 and $248,000 to a shareholder and to an entity managed by that shareholder, respectively, (collectively, the “Shareholder 2024 Loans”), in consideration of cash proceeds in the same amount in the following tranches:

 

October 2023  $199,000 
December 2023   424,000 
January 2024   25,000 
February 2024   188,000 
March 2024   80,000 
April 2024   31,000 
May 2024   100,000 
June 2024   120,500 
July 2024   59,000 
August 2024   58,000 
September 2024   69,139 
Total Shareholder 2024 Loans  $1,353,639 

 

The 2024 Shareholder Loans bear interest of 5.0% per annum and each individual loan will be due and payable three years from the date of issuance. As of September 30, 2025, the outstanding principal balance and accrued and unpaid interest of the Shareholder 2024 Loans was $1,353,639 and $108,417, respectively.

 

In July 2024, a shareholder of the Company made payments on the Company’s behalf to settle an obligation with an affiliate in which the shareholder has a controlling interest. The shareholder entered into an assignment of debt agreement with the affiliate whereby the affiliate assigned its right, title obligation and interest in the obligation by the Company to the shareholder (the “July 2024 Loan”). The July 2024 Loan is noninterest bearing and was due and payable at issuance. In December 2024, the Company repaid approximately $1,000,000 of the July 2024 loan. As of September 30, 2025, the outstanding principal balance of the July 2024 Loan was $213,349.

 

Consisting of the above-mentioned loans, the Company’s loans payable – related parties is summarized as follows:

 

   September 30,   December 31, 
   2025   2024 
Shareholder 2024 Loans  $1,353,639   $1,353,639 
July 2024 Loan   1,213,349    1,213,349 
    2,566,988    2,566,988 
Less: repayments to date   (1,000,000)   (1,000,000)
Loans payable – related parties, current and noncurrent  $1,566,988   $1,566,988 

 

In June 2024, as part of the terms of a note payable entered into, 30.0% of the loans payable with the shareholder of the 2024 Shareholder Loans and July 2024 Loan was due and payable on demand.

 

For the three and nine months ended September 30, 2025, the interest expense related to above loans payable – related parties amounted to $13,545 and $64,306, respectively, and has been reflected as a component of other (expense) income on the accompanying consolidated statements of operations and comprehensive loss.

 

For the three and nine months ended September 30, 2024, the interest expense related to above loans payable – related parties amounted to $15,521 and $38,249, respectively, and has been reflected as a component of other (expense) income on the accompanying consolidated statements of operations and comprehensive loss.

As of September 30, 2025 and December 31, 2024, the related accrued and unpaid interest for above loans was $108,417 and $44,111, respectively, which was reflected as interest payable – related parties, net of current portion on the accompanying consolidated balance sheets.

 

The loans payable – related parties mature as follows:

 

For the Period Ending:    
June 30, 2024  $619,440 
June 30, 2026   947,548 
   $1,566,988