Convertible Promissory Note

12 Months Ended

Jun. 30, 2025

Convertible Promissory Note [Abstract]

Convertible promissory note

11. Convertible promissory note

On June 26, 2024, Grafiti and Streeterville Capital, LLC (“Streeterville” or “Investor”) entered into a note purchase agreement, pursuant to which Grafiti agreed to sell, and Streeterville agreed to purchase, a secured promissory note in an aggregate original principal amount of $6,470,000 (the “Streeterville Note”). The Streeterville Note accrues interest on the outstanding balance of the note at the rate of 10% per annum, and all principal plus accrued interest is due and payable in December 2025. The Streeterville Note carries an original issue discount of $1,450,000 and $20,000 of issuance costs to cover legal, accounting, due diligence, monitoring and other transaction costs, which were recorded as a contract liability within long-term debt and will be amortized over the term of the note.

Starting on the earlier of 13 months after the closing of the Business Combination or January 1, 2026, the Investor may require the borrower to redeem up to one-sixth of the note’s initial principal and accrued interest monthly, and any unexercised redemption amounts can be carried over to future months. Grafiti has also agreed to not issue or sell any equity securities for capital raising purposes without the Investor’s prior consent.

On November 13, 2024, upon consummation of the business combination, the outstanding balance of the convertible promissory note of $2,037,984 was assumed by the Company (see Note 3).

On February 27, 2025, the Company and Streeterville entered into an amendment, pursuant to which, Streeterville was granted the right to convert from time to time at its election, all or any portion of the outstanding balance of the Steeterville Note into common shares of the Company. The number of common shares to be converted will be calculated using the conversion price, which is 90% of the lowest daily volume weighted average price of the Company’s common shares during the ten trading days preceding the delivery date of a conversion notice. This is subject to a floor price of $3.1375 per share.

The amendment was accounted for as a debt modification and the conversion feature should be accounted for as a derivative instrument. However, the conversion feature is considered to have immaterial value due to the high weight of probability that it will not be exercised due to the uncertainty of lack of trading liquidity.

During the year ended June 30, 2025, the Company repaid of $2,216,168 principal. As of June 30, 2025, the total outstanding balance of the Streeterville Note consists of $4,253,832 principal, $237,868 monitoring fee, $638,517 accrued interest, and $576,283 unamortized debt discount and issuance costs.

Interest expense on convertible promissory note for the year ended June 30, 2025 totaled $1,831,280 (June 30, 2024- $nil), which was not paid and included in the long-term debt balance in the consolidated balance sheet as of June 30, 2025.

Convertible promissory note as of June 30, 2025 consisted of the following:

Convertible promissory note:	Maturity	June 30, 2025			June 30, 2024
Streeterville Note	12/26/2025	$	5,130,217		$	-
Unamortized debt discount			(576,283	)		-
Total convertible promissory note		$	4,553,934		$	-