NOTES PAYABLE |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE |
NOTE 6 – NOTES PAYABLE
Insurance Loans
The Company has several financing loans for general liability, directors’ and officers’ insurance and other insurance liabilities, which bear interest at varying percentages and require monthly payments. As of December 31, 2025 and 2024, the remaining balances of these loans were $113,158 and $50,483, respectively. For the years ended December 31, 2025 and 2024, these insurance loans incurred approximately $7,119 and $8,490, respectively, of interest expense.
Soylent Revolver
Soylent, a subsidiary of the Company, previously maintained a $5.0 million revolving line of credit that matured on February 10, 2024. The facility entered default upon maturity, and the Company entered into a short-term forbearance agreement with the lender. The Company repaid the outstanding balance in full during April and May 2024, after which the Soylent Revolver was terminated. No amounts were outstanding under the Soylent Revolver as of December 31, 2025, and the Company has no remaining obligations related to this facility.
Gibraltar Loan and Security Agreement – Revolving Loan
On May 24, 2024, the Company and its subsidiaries entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Gibraltar Business Capital, LLC (“Gibraltar”), providing a senior secured revolving line of credit of up to $12.5 million (the “Gibraltar Loan”). The facility included a $1.5 million Permitted Overadvance Amount, which decreased by $125,000 per month beginning June 1, 2024. Borrowings under the facility were secured by a first-priority security interest in substantially all of the assets of the Company and its subsidiaries. The revolving line of credit was scheduled to mature on May 24, 2026, with a one-year automatic extension subject to the satisfaction of certain conditions.
Revolving loans accrued interest at One Month Term SOFR plus an applicable margin, with an additional 2.00% per annum applied to any portion of the loan classified as a Permitted Overadvance. Interest was payable monthly. As of December 31, 2024, the interest rate on the Gibraltar Loan was 10.00%.
The Loan and Security Agreement contained customary affirmative and negative covenants, including limitations on indebtedness, liens, asset sales, investments, dividends, stock repurchases, and other restricted payments. The agreement also included financial covenants, including a minimum EBITDA covenant and a maximum Unfinanced Capital Expenditures covenant. The Loan and Security Agreement further contained customary events of default, including nonpayment, covenant violations, breaches of representations and warranties, insolvency events, and cross-defaults.
As of December 31, 2024, the Company was in default under the Loan and Security Agreement due to reporting deficiencies and failure to maintain the minimum EBITDA financial covenant. The Company was not in payment default. The Company engaged in discussions with Gibraltar regarding a waiver and amendment of the financial covenants.
During 2025, the Company continued to experience covenant violations, including failure to satisfy minimum EBITDA requirements and certain reporting obligations. On July 18, 2025, the Company and Gibraltar entered into a Forbearance Agreement, under which Gibraltar agreed, subject to specified conditions, to forbear from exercising remedies related to existing events of default through September 16, 2025. The forbearance period could be extended to October 16, 2025 and November 15, 2025 if the Company achieved minimum EBITDA thresholds for the periods ended July 31, 2025 and August 31, 2025, respectively.
On November 24, 2025, the Company and Gibraltar entered into Amendment No. 1 to the Forbearance Agreement, extending the forbearance period through December 31, 2025, subject to the satisfaction of certain conditions. The amendment did not constitute a waiver of any defaults, and Gibraltar expressly reserved all rights and remedies under the Loan and Security Agreement.
As of December 31, 2024, the outstanding principal balance under the Gibraltar Loan was $3,917,956, with a debt discount of $266,626, resulting in a net carrying amount of $3,651,330. Interest expense related to the Gibraltar Loan was $395,184 for the year ended December 31, 2024.
In December 2025, the Company fully repaid all outstanding obligations under the Gibraltar Loan and Security Agreement. Upon repayment, all liens and security interests held by Gibraltar were released, and the Loan and Security Agreement, including the Forbearance Agreement and related amendments, was terminated. As of December 31, 2025, no amounts were outstanding under the Gibraltar Loan, and the Company had no remaining obligations to Gibraltar.
CEO Notes
See Note 9 - Related Party Transactions for loans to STCB from the Company’s CEO. |