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Note 9 - Related Party Note Payable
12 Months Ended
Jul. 31, 2026
Notes to Financial Statements  
Related Party Notes Payable Disclosure [Text Block]

NOTE 9 — RELATED PARTY NOTE PAYABLE

 

On January 31, 2025, the Company entered into a convertible secured promissory note with Victor Miranda providing for a line of credit (“LOC”) of up to $500,000. The agreement consolidated a previously issued unsecured promissory note of $25,000 into the new secured obligation. The note bears interest at 5% per annum and matures on January 31, 2027. The Company may prepay the note at any time without penalty.

 

At the lender's option, outstanding principal, accrued interest, and other amounts due may be converted into shares of the Company's common stock at a conversion price of $0.05 per share, subject to adjustment. The note is secured by collateral pursuant to a separate security agreement. Upon an event of default, the interest rate increases to the lesser of 18% per annum or the maximum rate permitted by law, and the lender may accelerate repayment of the outstanding balance.

 

The convertible promissory note contains a full-ratchet anti-dilution provision that provides for a downward adjustment to the conversion price if the Company subsequently issues common stock or certain convertible securities at a price below the then-effective conversion price, subject to specified exceptions. During the years ended July 31, 2026 and 2025, the Company did not issue any securities that triggered an adjustment to the conversion price. Accordingly, the conversion price remained at $0.05 per share as of July 31, 2026.

 

On May 29, 2026, Mr. Miranda converted $402,000 and $12,942 of principal and interest into 8,298,833, pursuant to the terms of the LOC. As of July 31, 2026, there is $65,000 and $331 of principal and accrued interest, respectively, due on the LOC. As of July 31, 2025, there is $135,000 and $2,040 of principal and accrued interest, respectively, due on the LOC.