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Loans and Notes Payable

9 Months Ended

Sep. 30, 2025

Note 6. Loans and Notes Payable

Loans and notes payable and their maturities consist of the following:

Third party debt:

Schedule of loans and notes payable
	September 30, 2025		December 31, 2024
Various promissory notes and convertible notes	$	50,960	$	50,960
Various promissory notes for vehicle financing		13,556		445,917
Blue Ridge Bank		410,200		410,200
Small Business Administration		2,326,360		2,389,022
Al Dali International for Gen. Trading & Cont. Co.		238,061		189,391
RSF, LLC		500,000		500,000
Justin Ellis		-		350,000
Note payable to Pilot OFS Holdings, LLC (e)		-		16,619,526
Business First Bank (e)		-		10,842,312
Maxus Capital Group, LLC (d)		-		10,513,507
Cedarview Opportunities Master Fund LP		2,992,013		2,886,307
Curve Capital, LLC		631,363		2,103,954
Clear Think Capital (b)		4,172,287		-
Clear Think Capital (b)		647,059
Agile Capital Funding, LLC		1,340,890		1,636,855
Short term note (WSGS) (c)		200,000		-
JJ Astor Note 1 (a)		3,047,973		-
JJ Astor Note 2 (a)		5,662,355
Total notes payable	$	22,233,077	$	48,937,951

Loans and notes payable, current	$	18,576,741	$	42,423,941
Loans and notes payable, long term	$	3,656,336	$	6,514,010

Related party debt:


	September 30, 2025		December 31, 2024
Jorgan Development, LLC	$	3,469,246	$	18,109,503
Ballengee Holdings, LLC		2,354,303		1,391,650
James Ballengee		500,000
Tyler Nelson		742,868		1,020,872
Meridian Equipment Leasing, LLC (f)		2,246,516		-
Meridian Equipment Leasing, LLC (f)		4,832,325
Triple T Trading Company LLC		476,352		404,121
Waskom, LLC (e)		-		884,018
Total notes payable - related parties	$	14,621,610	$	21,810,164

Loans and notes payable, current - related parties	$	9,088,504	$	21,810,164
Loans and notes payable, long term - related parties	$	5,533,106	$	-


2025	$	27,665,245
2026		5,304,919
2027		3,005,415
2028		872,662
2029		6,446
Thereafter		-
Total	$	36,854,687

(a)

On March 17, 2025, the Company issued a junior secured convertible promissory note (“Note 1”) due to J.J. Astor & Co. (the “Lender”), in the principal amount of $6,625,000, in connection with a Loan and Security Agreement entered into by and between the Company, its subsidiaries, and the Lender. The Company received $5,000,000, net of closing fees totaling $1,625,000. The note is payable to the Lender over forty-two equal weekly installments of $157,739, which may be paid in cash or, at the option of the Company once an applicable resale registration statement covering the conversion shares is declared effective by the SEC, in free trading shares of its common stock issued at a twenty percent (20%) discount to the lower of either the previous day’s closing price or the average of the four lowest volume-weighted average prices during the prior twenty (20) trading days. The note does not bear interest unless an event of default shall occur and is continuing. The Company agreed to issue the Lender 250,000 shares of its common stock as additional consideration for the loan with a value of $235,000 which has been recorded as a debt discount.

On July 9, 2025, the Company defaulted on Note 1 and entered into a Forbearance and Additional Loan Agreement with J.J. Astor & Co., retroactively effective to April 14, 2025. Under the agreement, the principal balance of Note 1 was increased by $615,178 to $6,766,961 with a corresponding charge to interest expense. Additionally, the interest rate was increased to 19% with a maturity date of January 7, 2026. The agreement also provided for the issuance of a new junior secured convertible promissory note (“Note 2”) with net gross proceeds of $4.4 million and a face amount of $5.94 million, a portion of which was withheld by the Lender to satisfy past-due and future installments under Note 1. The transaction was accounted for as a debt extinguishment under ASC 470-50, resulting in the write-off of approximately $2.8 million of unamortized original issue discount and deferred financing costs, all of which was recognized in interest expense. The newly issued debt was recorded at its face amount and will be amortized using the effective interest method. In addition, the Company recognized approximately $1.4 million of default-related fees as interest expense during the quarter ended September 30, 2025.

During the quarter ended September 30, 2025, the Lender converted an aggregate of $1,100,000 of outstanding convertible debt into 7,039,685 shares of the Company’s common stock, valued at $2.2 million, at contractually discounted prices, resulting in a non-cash loss on conversion of debt of approximately $1.1 million.

The conversion price is variable and based on the Company’s future market price. Accordingly, the conversion option is required to be bifurcated from the debt instrument in accordance with ASC 815-15 and measured at fair value. As a result, the Company recorded a derivative liability of $8,728,527 as of September 30, 2025 with a corresponding charge to Loss on Conversion of Debt in the accompanying statement of operations for the three and nine months ended September 30, 2025.

(b)

The Company entered multiple twelve-month convertible promissory notes in the second quarter 2025 for a total principal amount of $5,911,765, in connection with a Loan and Security Agreement entered into by and between the Company, its subsidiaries, and Clear Think Capital (“Clear Think”). The Company received $5,025,000, net of closing fees totaling $416,500. The notes mature twelve months from the date of issuance, have a 15% original issuance discount, have a one-time ten percent interest charge applied at the issuance date. In addition, the Company agreed to issue the holders 753,750 shares of common stock as additional consideration for the notes with a value of $595,963 which has been recorded as a debt discount.

During the third quarter of 2025, the Company issued an additional twelve-month convertible promissory note on August 12, 2025, with a principal amount of $647,059 and cash proceeds of $550,000, which reflects a similar original issue discount structure. The notes mature twelve months from the date of issuance and has a one-time ten percent interest charge applied at the issuance date.

(c)

The Company obtained a short-term loan of $475,000 in June 2025. The loan originally matured in June 2025 but it was extended to November 2025 when it was paid off. The annual interest rate was eighteen percent per annum.

(d)	At December 31, 2024, the Company had a note payable to Maxus Capital Group, LLC with an outstanding balance of $10,513,507. The balance of the note was reduced to $0 as of September 30, 2025, as part of the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC completed on July 30, 2025. On July 30, 2025, the Company, certain affiliated entities, and a related party entered into a Forbearance Agreement with Maxus Capital Group, LLC, which acknowledged existing events of default and provided that Maxus would forbear from exercising its remedies so long as the Company complied with a revised payment schedule. In connection with the agreement, the Company paid a cash forbearance fee of $250,000 and agreed to issue restricted common stock valued at $250,000, which was issued during the fourth quarter of 2025 and charged to interest expense. We incurred additional charges of approximately $7.8 million which were added to the principal balance and were recorded to interest expense in the nine months ended September 30, 2025. The Forbearance Agreement also resulted in a remeasurement of certain finance lease liabilities under ASC 842, Leases, as the revised terms affected obligations previously accounted for as part of the Maxus financing arrangement.
(e)	As part of the divestiture of Meridian Equipment Leasing, LLC and Equipment Transport, LLC completed on July 30, 2025, the Company derecognized approximately $16,314,410 of third party note payables to Pilot OFS Holdings LLC and $8,938,836 to Business First Bank, and $1,079,287 of related party note payable to Waskom LLC.
(f)	In connection with the divestiture, the Company became directly obligated for a related-party note payable totaling $5,040,545 that had previously been recorded at the subsidiary level. The liability was transferred to the Company and remains outstanding as a related-party obligation and is included within notes payable as of September 30, 2025. In addition, the Company assumed $2,302,696 of related-party debt owed to Meridian Equipment Leasing, LLC in connection with the Company’s purchase of assets from Meridian following the divestiture. All three notes mature in August of 2028 and have a twelve percent interest rate.