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Notes Payable
 3 Months Ended
May 31, 2025
Debt Disclosure [Abstract]  
Notes Payable

NOTE 8 – Notes Payable

 

On May 24, 2024, the Company sold a short-term promissory note to a private investor in the aggregate principal amount of $100,000. The note bears interest at 7.5% per annum and had a maturity date of the earlier of completion of a public financing or October 31, 2024. The investor has consented to extend the maturity date on a month-to-month basis and continues to accrue interest. As of May 31, 2025, the full principal amount of $100,000 was outstanding.

 

On June 26, 2024, the Company sold a short-term promissory note to a private investor in the aggregate principal amount of $40,000. The note bears interest at 7.5% per annum and has a maturity date of June 25, 2025, which may be extended by written consent of the investor. As of May 31, 2025, the full principal amount of $40,000 was outstanding.

 

On October 18, 2024, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $154,440. The note includes an original issue discount (“OID”) of $22,440, and bears a one-time interest charge of 13%, which was applied on the issuance date to the principal. The note is payable in ten equal installments of $17,452 beginning on November 15, 2024, and may be prepaid at any time with no prepayment penalty. Upon the event of default by the Company, any unpaid principal and interest may be converted to common stock at the election of 1800 Diagonal Lending LLC. As of May 31, 2025, the balance on the note, net of the unamortized debt discount, was $40,572.

 

On November 8, 2024, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $125,190. The note includes an OID of $18,190, and bears a one-time interest charge of 13%, which was applied on the issuance date to the principal. The note is payable in five installments, with the first payment in the amount of $70,732 due on May 15, 2025, and the remaining four equal installments of $17,683 are due on the 15th of each of the next four successive months. The note may be prepaid at any time with no prepayment penalty. Upon the event of default by the Company, any unpaid principal and interest may be converted to common stock at the election of 1800 Diagonal Lending LLC. As of May 31, 2025, the balance on the note, net of the unamortized debt discount was $57,760.

 

On December 31, 2024, the Company sold a short-term promissory note to a private investor in the aggregate principal amount of $220,000. The note bears guaranteed interest of 15%, or $33,000, payable in full on the issue date by the issuance of 10,927 shares of the Company’s Series K Preferred. The note may be prepaid at any time without penalty. Additionally, the Company issued a warrant to the investor to purchase up to 220,000 shares of common stock with an exercise price of $4.00 per share and a three-year term. In accordance with ASC 470-20-25-2, the proceeds of the short-term promissory note were allocated to the note and the warrant based on the relative fair values of the note without the warrant and of the warrant itself at time of issuance, with the portion of the proceeds allocated to the warrants accounted for as paid-in capital, and the remainder of the proceeds allocated to the note. The relative fair value of the warrant at the time of issuance that was allocated to additional paid-in capital was $179,913. As of May 31, 2025, the balance on the note, net of the unamortized debt discount, was $95,169.

 

On February 4, 2025, the Company sold a short-term promissory note to 1800 Diagonal Lending LLC in the aggregate principal amount of $152,100. The note includes an OID of $22,100, and bears a one-time interest charge of 13%, which was applied on the issuance date to the principal. The note is payable in five installments, with the first payment in the amount of $85,937 due on August 15, 2025, and the remaining four equal installments of $21,484 are due on the 15th of each of the next four successive months. The note may be prepaid at any time with no prepayment penalty. Upon the event of default by the Company, any unpaid principal and interest may be converted to common stock at the election of 1800 Diagonal Lending LLC. As of May 31, 2025, the balance on the note, net of the unamortized debt discount was $137,808.

 

On April 1, 2025, 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 $300,000. After deducting commissions, net proceeds to the Company were $276,000.

 

The Alumni Note is in the principal amount of $360,000 with an OID of $60,000 and guaranteed interest on the principal amount of ten percent (10%) per annum which shall be due and payable on July 1, 2025. In the event of a failure to re-pay the Alumni Note on or before July 1, 2025, the interest rate will increase to the lesser 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 shares of Company common stock only upon an event of default.

 

As of May 31, 2025, the balance on the Alumni Note, net of the unamortized debt discount, was $281,737.