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Notes Payable
 9 Months Ended
Nov. 30, 2024
Debt Disclosure [Abstract]  
Notes Payable

NOTE 6 – Notes Payable

 

On May 24, 2024, the Company issued an unsecured promissory note for $100,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on the earlier date of the completion of a public financing or October 31, 2024, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

 

On July 11, 2024, the Company issued an unsecured promissory note for $40,000 to an investor upon receipt of proceeds. The note bears an annual interest rate of 7.5% and will mature and be due and payable on June 25, 2025, unless extended by the written consent of the investor. The note can be prepaid at any time by the Company without penalty.

 

On September 19, 2024, the Company entered into a securities purchase agreement (the “Note & Warrant SPA”) with Alumni Capital LP (“Alumni Capital”) for the sale of a short-term promissory note (the “Alumni Note”) and warrants (“Warrants”) to Alumni Capital for total consideration of $250,000. After deducting commissions, net proceeds to the Company were $230,000.

 

The Alumni Note is in the principal amount of $300,000 with an original issue discount of $50,000 and guaranteed interest on the principal amount of ten percent (10%) per annum which shall be due and payable on December 19, 2024. In the event of a failure to re-pay the Alumni Note on or before December 19, 2024, the interest rate will increase to the lesser of twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The Alumni Note is convertible into common stock of the Company only upon an event of default.

 

On October 18, 2024, the Company entered into a securities purchase agreement (the “Note SPA”) with 1800 Diagonal Lending, LLC (“1800 Diagonal”) for the sale of a short-term promissory note (the “1800 Diagonal Note”) for total consideration of $132,000. After deducting commissions and other expenses, net proceeds to the Company were $115,000.

 

The 1800 Diagonal Note is in the principal amount of $154,440 with an original issue discount of $22,440 and guaranteed interest on the principal amount of thirteen percent (13%) which shall be due and payable in ten (10) equal monthly installments of $17,451.70 commencing on November 15, 2024. The note and interest may be prepaid by the Company at any time with no prepayment penalty. In the event of a failure to pay a monthly installment within five (5) business days of the due date, the interest rate will increase to twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The 1800 Diagonal Note is convertible into common stock of the Company only upon an event of default.

 

On November 8, 2024, the Company entered into a second securities purchase agreement (the “Note2 SPA”) with 1800 Diagonal for the sale of a short-term promissory note (the “1800 Diagonal Note2”) for total consideration of $107,000.

 

The 1800 Diagonal Note2 is in the principal amount of $125,190 with an original issue discount of $18,190 and guaranteed interest on the principal amount of thirteen percent (13%) which shall be due and payable in five (5) monthly installments. The first installment of 50% of the amount due, totaling $70,732, is payable on May 15, 2025. The remaining 50% is payable in four (4) equal monthly installments of $17,683 commencing on June 15, 2025. The note and interest may be prepaid by the Company at any time with no prepayment penalty. In the event of a failure to pay a monthly installment within five (5) business days of the due date, the interest rate will increase to twenty-two percent (22%) per annum or the maximum amount permitted under law from the due date thereof until the same is paid. The 1800 Diagonal Note2 is convertible into common stock of the Company only upon an event of default.

 

On November 1, 2024, the Company sold a short-term promissory note to an investor for total consideration of $250,000, resulting in total net proceeds of $250,000. The note is in the principal amount of $287,500 and includes an original issue discount of $37,500. The note is payable in full on or before May 1, 2025, and may be prepaid at any time without penalty. In the event of default, the remaining unpaid balance is due and payable immediately at the option of the investor. In connection with the note, the Company issued a warrant to the investor to purchase up to 100,000 shares of common stock with an exercise price of $3.25. The warrant expires on November 1, 2027.