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SHORT-TERM NOTE RECEIVABLE
 9 Months Ended
Sep. 30, 2025
Receivables [Abstract]  
SHORT-TERM NOTE RECEIVABLE

NOTE 5 — SHORT-TERM NOTE RECEIVABLE

 

Short-term note receivable consisted of the following at September 30, 2025 and December 31, 2024:

 

   September 30,   December 31, 
   2025   2024 
Short-term note receivable - Marizyme  $4,609,107   $2,370,692 
Less allowance for credit losses   (261,000)   (360,000)
Short-term notes receivable  $4,348,107   $2,010,692 

 

Allowance for credit losses consisted of the following at September 30, 2025 and December 31, 2024:

 

   September 30,   December 31, 
   2025   2024 
Beginning Balance  $(360,000)  $— 
Current period provision for expected credit losses   99,000    (360,000)
Ending Balance  $(261,000)  $(360,000)

 

During the nine months ended September 30, 2025, the Company advanced to Marizyme, Inc., $1.8 million, against which Marizyme delivered demand promissory notes to the Company of like principal amounts (the “Marizyme Notes”). As of September 30, 2025, accrued interest related to the Marizyme Notes was $0.5 million. Of this amount, approximately $178,000 and $429,000 was recorded in the three and nine month period ended September 30, 2025, respectively, and was recognized in interest income in the consolidated statement of operations, and the total is included in short-term notes receivable on the consolidated balance sheet. As of December 31, 2024 there was $2,257,400 due to the Company under the Marizyme Notes, as well as $113,292 of accrued interest.

 

The Marizyme Notes bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Notes at any time and from time to time, in whole or in part, without premium or penalty.

 

On August 21, 2025, an amendment was made to the original agreement, reclassifying Marizyme’s debt to the Company from junior to senior, therefore changing the assumptions used in our analysis. Additionally, as a result of this amendment the maturity date of the debt changed to August 21, 2026, as there was no previously defined due date.

 

Under ASC 326-20, known as the CECL model, the Company was required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. The Company is unable to use its historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, the Company used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor’s assets, and the Company’s expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. As of September 30, 2025, the estimate for expected credit losses on the Marizyme Notes is $261,000. Given the inherently uncertain nature of the debtor’s financial condition and future outcomes, actual credit losses may differ materially from this estimate. The Company will continue to monitor relevant events and conditions and update its assumptions and allowance as necessary.

 

The Company is also party to a Co-Development Agreement with Marizyme (see Note 13 - Research and License Agreements).