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Related Party Transactions
 9 Months Ended 12 Months Ended
Sep. 30, 2025
Dec. 31, 2024
Related Party Transactions    
Related Party Transactions

Note 10 – Related Party Transactions

 

The related parties that had material transactions for the nine months ended September 30, 2025 and 2024, consist of the following:

 

Related Party

Nature of Relationship to the Company

A

An Ohio limited liability company - a significant shareholder

B

Owner of A and our former Chief Executive Officer of the Company from April 1, 2025 to October 1, 2025. Current Chairman of the Board of Directors.

C

Chief Executive Officer of the Company until March 31, 2025 and Vice President of Operations from April 1, 2025.

D

A California limited liability company owned by a related party E

E

Significant shareholder and our Chief Technology Officer

F

Director and Chief Executive Officer of GEVI Insurance Holdings Inc.

G

A Delaware limited liability company – Series A Preferred shareholder

H

 

A company controlled by our Chief Financial Officer

 

For the nine months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of:

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

Related Party

 

2025

 

 

2024

 

 

Nature of transaction

 

Financial Statement Line Item

 

A

 

$2,103,600

 

 

$-

 

 

150,000 Series C preferred stock for consulting fee

 

Professional fees - related party

 

A

 

$25,300

 

 

$6,495

 

 

Payment operating expenses on behalf of the Company

 

Due to related party

 

A

 

$25,000

 

 

$60,000

 

 

Repayment loan

 

Due to related party

 

D

 

$21,600

 

 

$64,800

 

 

Cash paid for consulting fees

 

Professional fees - related party

 

D

 

$4,000

 

 

$16,200

 

 

Cash paid for consulting and advisory fees

 

Cost of revenue - related party

 

E

 

$-

 

 

$108,808

 

 

Cash paid for management fee

 

Professional fees - related party

 

E

 

$91,290

 

 

$83,192

 

 

Cash paid for royalty and sales commissions

 

Cost of revenue - related party

 

F

 

$420,720

 

 

$-

 

 

30,000 Series C preferred stock for management compensation

 

Management compensation

 

F

 

$-

 

 

$348,000

 

 

20,000 shares of Series C preferred stock for advisory fee

 

Professional fees - related party

 

G

 

$2,511,855

 

 

$-

 

 

69,007 Series C preferred stock for services

 

Financing expense

 

H

 

$16,065

 

 

$-

 

 

Edgar filing expense

 

General and administrative

 

H

 

$39,624

 

 

$-

 

 

Professional service - accounting

 

Professional fees - related party

 

 

For the three months ended September 30, 2025 and 2024, expenses to related parties and their nature consists of:

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

Related Party

 

2025

 

 

2024

 

 

Nature of transaction

 

Financial Statement Line Item

 

D

 

$5,600

 

 

$23,200

 

 

Cash paid for consulting fees

 

Professional fees - related party

 

D

 

$-

 

 

$5,800

 

 

Cash paid for consulting and advisory fees

 

Cost of revenue - related party

 

E

 

$-

 

 

$39,544

 

 

Cash paid for management fee

 

Professional fees - related party

 

E

 

$-

 

 

$20,456

 

 

Cash paid for royalty and sales commissions

 

Cost of revenue - related party

 

H

 

$1,458

 

 

$-

 

 

Edgar filing expense

 

General and administrative

 

H

 

$20,224

 

 

$-

 

 

Professional service -accounting

 

Professional fees - related party

 

 

Convertible notes – related parties

 

The components of convertible notes as of September 30, 2025 and December 31, 2024, were as follows:

 

 

 

 

 

 

 

 

Effective

 

 

Stated

 

 

 

 

 

 

 

 

 

Principal

 

 

Maturity

 

Interest

 

 

Interest

 

 

September 30,

 

 

December 31,

 

Payment date

 

Amount

 

 

date

 

Rate

 

 

Rate

 

 

2025

 

 

2024

 

December 1, 2024

 

$576,693

 

 

December 31, 2025

 

 

-

 

 

 

10%

 

$576,693

 

 

$576,693

 

February 2025

 

$2,000,000

 

 

February 28, 2026

 

 

128%

 

 

10%

 

 

2,000,000

 

 

 

-

 

Total Convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$2,576,693

 

 

$576,693

 

Less: Unamortized debt discount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(729,143)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,847,550

 

 

 

576,693

 

Less: Current portion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,847,550)

 

 

(576,693)

Long-term portion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$-

 

 

$-

 

 

On December 31, 2024, the Company issued a convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.16. The conversion price is a fixed price and the Company determined that conversion feature did not need to be bifurcated. The Company has accounting for the convertible debt at amortized cost under ASC 470-20.

 

In February 2025, the Company entered into one (1) subscription agreement for convertible notes ($2,000,000) and warrants (416,667 shares of common stock) with a related party G. The convertible notes have a term of twelve (12) months, at an interest rate of 10% per annum and warrants are with a term of five (5) years, at exercise price of $3.00 per share. The outstanding principal amount of convertible notes and unpaid interest is convertible at a fixed conversion price of $2.40. The obligations of the Company under the convertible note are secured by a pledge of the Company’s membership interests in MFB Ohio. In the event of a default, related party G could proceed against the equity of MFB Ohio pledged to collateralize the convertible note. MFB Ohio owns the Company’s intellectual property portfolio. The Company paid 8% original discount of $160,000 and financing fee of $63,918 and recorded these financing costs as debt discount. The Company has accounted for the convertible debt at amortized cost under ASC 470-20.

 

During the nine months ended September 30, 2025, the Company recognized the debt discount of $1,824,087 (Original Issued Discounts of discount and financing fee of $223,918 and warrants of $1,600,169).

 

During the three and nine months ended September 30, 2025, the Company recognized interest expenses of $64,946 and $160,393 and amortization of debt discount of $915,548 and $1,094,944, respectively. As of September 30, 2025, the Company recorded accrued interest of $160,393.

Note 11 – Related Party Transactions

 

The related parties that had material transactions for the years ended December 31, 2024 and 2023, consist of the following:

 

Related Party

Nature of Relationship to the Company

A

An Ohio Corporation – a significant shareholder

B

Owner of related party A

C

Chief Executive Officer (CEO) of the Company

D

A California Corporation owned by related party E

E

Significant shareholder

F

Former MFB Ohio board advisor, resigned during 2024

G

MFB Ohio board advisor

H

MFB Ohio board advisor

I

MFB Ohio board advisor

J

Director and Chief Executive Officer of GEVI Insurance Holdings Inc.

K

Former MFB Ohio board advisor, resigned during 2024

As of December 31, 2024 and 2023, amounts owing to related parties consists as follows:

 

 

 

December 31,

 

 

December 31,

 

Related Party 

 

2024

 

 

2023

 

A

 

$-

 

 

$897,197

 

B

 

 

-

 

 

 

411,880

 

 

 

$-

 

 

$1,309,077

 

 

During the years ended December 31, 2024 and 2023, related party A advanced to the Company an amount of $2,000 and $307,500 for working capital proposes and $6,495 and $246,425 for operating expenses paid directly to vendors, on behalf of the Company, respectively. During the years ended December 31, 2024 and 2023, the Company repaid $330,000 and $125,000 owing to the related party A and $410,880 and $0 owing to the related party B, respectively. On December 31, 2024, the Company issued a $576,693 convertible note to related party A in exchange for the amount due to related party A and B of $576,693.

 

For the years ended December 31, 2024 and 2023, expenses to related parties and their nature consists of:

 

 

 

Year Ended

 

 

 

 

 

 

 

 

December 31

 

 

 

 

 

 

Related Party

 

2024

 

 

2023

 

 

Nature of transaction

 

Financial Statement Line Item

 

C

 

$75,000

 

 

$-

 

 

Cash paid for management fee

 

General and administration

 

D

 

$77,600

 

 

$120,400

 

 

Cash paid for consulting fees

 

Professional fees - related party

 

D

 

$19,400

 

 

$30,100

 

 

Cash paid for consulting and advisory fees

 

Cost of revenue – related party

 

E

 

$163,654

 

 

$139,196

 

 

Cash paid for management fee

 

Professional fees - related party

 

E

 

$81,917

 

 

$47,304

 

 

Cash paid for royalty and sales commissions (See Note14)

 

Cost of revenue – related party

 

F

 

$214,950

 

 

$-

 

 

41,667 shares of common stock issued for advisory fee

 

Professional fees - related party

 

G

 

$429,900

 

 

$-

 

 

83,333 shares of common stock issued for advisory fee

 

Professional fees - related party

 

H

 

$128,970

 

 

$-

 

 

25,000 shares of common stock issued for advisory fee

 

Professional fees - related party

 

I

 

$214,950

 

 

$-

 

 

41,667 shares of common stock issued for advisory fee

 

Professional fees - related party

 

J

 

$348,000

 

 

$-

 

 

20,000 shares of Series C preferred stock for advisory fee

 

Professional fees - related party

 

K

 

$85,980

 

 

$-

 

 

16,666 shares of common stock issued for advisory fee

 

Professional fees - related party

 

 

Convertible note – related party

 

On December 31, 2024, the Company issued convertible note of $576,693, to related party A, in exchange for the amount due to related party. The convertible note has a term of twelve (12) months, at an interest rate of 10% per annum. The outstanding principal amount of convertible note and unpaid interest is convertible at a fixed conversion price of $2.16. The conversion price is a fixed price and the Company determined that conversion feature did not need to be bifurcated. The Company has accounting for the convertible debt at amortized cost under ASC 470-20.

 

As of December 31, 2024, the Company recorded convertible note – related party of $576,693.