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NOTE 9 - CONVERTIBLE LOANS
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
NOTE 9 - CONVERTIBLE LOANS

NOTE 9 - CONVERTIBLE LOANS

 

Convertible loans at September 30, 2025 and December 31, 2024 consisted of the following:

                 
   September 30,  December 31,
   2025  2024
Issued in fiscal year 2024  $753,090   $5,225,308 
Issued in fiscal year 2025   421,053    —   
Total convertible notes payable   1,174,142    5,225,308 
Less: Unamortized debt discount   (7,672)   (348,950)
Total convertible notes   1,166,470    4,876,358 
           
Less: current portion of convertible notes   1,166,471    1,864,432 
Long-term convertible notes  $—     $3,011,926 

 

During the nine months ended September 30, 2025 and 2024, the Company recorded interest expense of $593,818 and $555,092 and recognized amortization of discount, included in interest expense, of $278,951 and $693,516, respectively.

 

Conversion

 

During the nine months ended September 30, 2025, one note holder converted notes with principal amounts of $4,153,343, debt discount of $129,570, accrued interest of $420,919 and conversion fee of $15,000 into 988,655 shares of common stock. During the three months ended September 30, 2025, one note holder converted notes with principal amounts of $931,121, debt discount of $1,918, accrued interest of $302,586 and conversion fee of $7,500 into 293,742 shares of common stock.

 

Settlement

 

During the nine months ended September 30, 2025, the Company settled the principal amount of convertible notes of $671,870, debt discount of $58,573 and accrued interest of $34,366 issued in June 2024 through February 2025 to two notes holders by paying cash of $725,000. As a result, the Company recorded a loss on settlement of debt of $77,337.

 

Issued in fiscal year 2025

 

During the nine months ended September 30, 2025, the Company borrowed amounts from third parties totaling $1,113,316, which includes original issue discount and financing costs of $125,816.

 

Principal  Issuance  Maturity  Interest  Payment
amount  date  Date  rate  schedule
$471,000    February 26, 2025    December 30, 2025    14%  5 payments, one payment of $268,470 and four payments of $67,118, beginning in August 2025
$116,000    February 26, 2025    December 30, 2025    14%  5 payments, one payment of $66,120 and four payments of $16,530, beginning in August 2025
$526,316    March 4, 2025    December 5, 2025    24%  The outstanding balance shall be paid on December 5, 2025

 

The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Certain notes allow for the conversion price to be a fixed price of $8.80 per share.

 

 

Issued in fiscal year 2024

 

In January 24, 2024, we entered into a securities purchase agreement (the “SPA”) with M2B Funding Corp., a Florida corporation, for it to purchase up to the principal amount of $3,888,889 in secured convertible promissory notes (the “Notes”) for an aggregate purchase price of $3,500,000 (the “Purchase Price”), which Notes are convertible into shares (“Conversion Shares”) of our common stock with an initial conversion price of $8.80 per share. Each noteholder received shares of common stock (“Kicker Shares”) in an amount equal to ten percent of the principal amount of any Note issued divided by $8.80. The Notes are secured by all of our assets under a Security Agreement signed with the SPA.

 

The initial tranche was executed in January 2024 for $2,222,222 in face value of Notes and 25,253 Kicker Shares, with an original issue discount of $222,222; second and third tranches were executed in March 2024 for $1,111,111 and $555,556, respectively, in face value of Notes and 12,627 and 6,314 Kicker Shares, with an original issue discount of $111,111 and $55,556, respectively. Each one year note bears interest at 18% per annum.

 

In October 2024, we entered into a Memorandum of Understanding (the “Agreement”) with M2B Funding Corp. to extend the maturity date on three promissory notes in exchange for stock consideration. Pursuant to the Agreement, the following promissory notes were extended by 12 months from their original date of maturity:

 

  •  First Note: Originally due January 1, 2025, with an outstanding amount of $1,888,889, extended to January 1, 2026.  
  •   Second Note: Originally due March 12, 2025, with an outstanding amount of $1,111,111, extended to March 12, 2026.  
  •   Third Note: Originally due March 25, 2025, with an outstanding amount of $555,556, extended to March 25, 2026.   

 

In consideration for this extension, the Company issued 8,081 restricted common shares. As a result of the extension, the Company recognized the loss on debt extinguishment of $297,878 as debt extinguishment and debt discount of $61,818 as debt modification during the year ended December 31, 2024.

 

Additionally, during the year ended December 31, 2024, the Company borrowed amounts from a third party totaling $2,413,707, which includes original issue discount and financing costs of $248,707.

 

Principal  Issuance  Maturity  Interest  Payment
amount  date  Date  rate  schedule
$146,900    March 7, 2024    January 15, 2025    12%  10 payments each in the amount of $16,453 beginning on April 15, 2024
$177,100    March 7, 2024    January 15, 2025    14%  5 payments, one payment of $100,947 and four payments of $25,237, beginning in September 2024
$179,400    July 10, 2024    April 30, 2025    14%  9 payments each in the amount of $22,724 beginning on August 30, 2024
$151,960    September 16, 2024    July 15, 2025    14%  5 payments, one payment of $86,617 and four payments of $21,654, beginning in March 2025
$179,400    October 15, 2024    July 15, 2025    14%  9 payments each in the amount of $22,724 beginning on November 30, 2024
$1,578,947    December 6, 2024    June 4, 2025    24%  Outstanding balance shall be paid on June 4, 2025

 

The notes are convertible at the option of the holders at any time following an event of default, and the conversion price is 75% multiplied by the lowest trading price of Company’s common stock during the 10 trading days prior to the conversion date. Certain notes allow for the conversion price to be a fixed price of $12.0 per share.