XML 27 R12.htm IDEA: XBRL DOCUMENT v3.25.3
BORROWINGS
 12 Months Ended
Sep. 30, 2025
Broker-Dealer [Abstract]  
BORROWINGS

NOTE 3 – BORROWINGS

 

Notes Payable

 

From time to time, the Company entered into unsecured notes payable with individual investors. The terms of these notes are listed below. 

 Schedule of unsecured notes payable                                
                Interest     Note Balance as of September 30,
Noteholder   Origination     Maturity     Rate     2025     2024
Brent Lilienthal (*)     2019       12/31/2021       0 %   $  -     $  217,000  
Mel Wentz (**)     3/19/2019       4/29/2019       0 %     —       680,000  
Kirk Huntsman (***)     3/1/2019       2/29/2020       18 %     —       —  
John Hare (***)     4/29/2019       unspecified       0 %     —       —  
Barkley Capital LLC (***)     9/13/2023       3/13/2024       10 %     —       —  
Chris Peterman (****)     9/9/2024       9/9/2025       18 %     20,000       20,000  
Total principal amount                           $ 20,000     $ 917,000  
Less: unamortized debt discount                             —       (12,592 )
                            $ 20,000     $ 904,508  

 

 

(*)

 

 

 On May 15, 2025, the Company and Brent Lilienthal entered into a settlement agreement, pursuant to which, the Company settled $217,000 debt owed by issuance of 120,000 shares of common stock of the Company (see Note 4).
(**) During the year ended September 30, 2025, the Company recognized a gain on the extinguishment of the $680,000 note payable with Mr. Wentz The Company obtained a legal opinion documenting the law in the state in which the debt originated. Based on such state law, the Company has been judicially released from this obligation as the statute of limitations has lapsed on any breach of contract claims. This has been reflected in gain on extinguishment of notes payable on the consolidated statements of operations. Further, on July 14, 2025, the Company received a letter from a third party legal counsel which stated the loan agreement appears to be invalid under Texas usury laws. Therefore, commencing on July 1, 2024, a monthly penalty of $10,000 was no longer accrued.

 

(***) These notes were converted into shares of common stock or stock warrants of the Company during the year ended September 30, 2024.

 

(****) On September 9, 2024, the Company and Chris Peterman entered into a convertible promissory note agreement (the “Convertible Note”), providing for the issuance of a Convertible Note in the principal amount of $20,000. The Convertible Note  was due on September 9, 2025 (see Note 8). Principal amount is convertible into shares of common stock of the Company at a conversion price of $1.00 per share. In addition, the Company issued Chris Peterman a stock purchase warrant to acquire 40,000 shares of common stock of the Company at a per share price of $0.01 (“Pre-Funded Warrants”). The Pre-Funded Warrants were exercisable at September 9, 2025 and until the Pre-Funded Warrants are exercised in full (see Note 8). In accordance with ASC 470-20-25-2, proceeds from the sale of a debt instrument with stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants are accounted for as additional paid-in capital. The remainder of the proceeds are allocated to the debt instrument portion of the transaction. The fair value of the warrants issued to the investor was $40,000. Therefore, the Company recorded debt discount of $13,333 related to the warrants relative fair value issued to the investor, which was amortized into interest expense over the term of the convertible promissory note agreement. For the years ended September 30, 2025 and 2024, amortization of debt discount related to the Convertible Note payable amounted to $12,592 and $741, respectively, which has been included in interest expense on the accompanying consolidated statements of operations.

 

On December 15, 2023, Kirk Huntsman converted his note with the principal amount of $32,500 and unpaid interest of $15,563 into 40,000 shares of common stock of the Company (see Note 4).

 

On November 11, 2023, John Hare converted its note with the principal amount of $300,000 into 300,000 warrants of the Company (see Note 4).

 

On March 9, 2024, Barkley Capital LLC converted its note with the principal amount of $200,000 and unpaid interest of $10,000 into 210,000 shares of common stock of the Company (see Note 4).

 

Interest expense on the notes payable totaled $2,092 and $17,693 for the years ended September 30, 2025 and 2024, respectively. Default penalties - late fees totaled $0 and $90,000 for the years ended September 30, 2025 and 2024, respectively. These late fees are in dispute and have been included in note payable on the accompanying consolidated balance sheets.

 

As of September 30, 2025 and 2024 accrued interest on the notes payable was $2,213 and $121 and all related to the Convertible Note.

 

Commercial Loan

 

On April 9, 2020, the Company received a loan from the Small Business Administration pursuant to the Paycheck Protection Program (“PPP”) in the principal amount of $48,750. The note bears interest at a variable rate of approximately 1% and matured in April 2022. The note is currently in default. Forgiveness for the loan was applied for and is pending.