GridAI Technologies Corp. Debt Disclosure

Note 15 – Debt

The below balances are presented on the consolidated balance sheets as deferred consideration of $6,250,000 and notes payable of $2,027,184 as of December 31, 2025. Debt consists of the following:

Deferred Consideration

In connection with the acquisition of Grid AI Corp., the Company recognized deferred consideration payable of $7,000,000 as part of the purchase consideration. During the year ended December 31, 2025, the Company made cash payments of $750,000 toward this obligation. As of December 31, 2025, the outstanding balance was $6,250,000. The deferred consideration is non-interest bearing and is expected to be settled in cash or through other arrangements in accordance with the terms of the acquisition agreement. The consideration payable is non-interest bearing and is expected to be settled through future cash payments or other negotiated arrangements in accordance with the terms of the acquisition agreement.

Note Payable

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As of December 31, 2025, all outstanding debt is classified as current.

Revolving Line of Credit

Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 (the “Revolving Loan Agreement”), pursuant to which the lender agreed to make available borrowings up to $2,000,000. As of December 31, 2025, the Company had drawn $700,000 under the facility, with approximately $1.3 million remaining available, subject to customary drawdown conditions.

Borrowings under the Revolving Loan Agreement are evidenced by a revolving note (the “Revolving Note”) which bears interest at a rate of 18% per annum, calculated on a 360-day year. The proceeds from the facility are being used for general corporate purposes.

The Revolving Loan Agreement has a contractual maturity date of January 29, 2026.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including restrictions on the incurrence of additional indebtedness, affiliate transactions, and certain corporate actions without lender consent.

On April 1, 2026, the Company received a notice of default from the lender under the Revolving Loan Agreement due to the failure to repay the outstanding balance by the maturity date. The lender has demanded repayment of the outstanding principal of $700,000 together with accrued interest and other amounts due under the agreement. Management is actively engaged in discussions with the lender to resolve the matter.

Promissory Note with Warrants

During the period from October 17, 2025 through December 26, 2025, the Company entered into financing arrangements that included promissory notes issued together with warrants to purchase shares of the Company’s common stock. The aggregate principal amount of the notes issued during the period was $2,300,000, and the Company received gross proceeds of $2,300,000. The warrants issued in connection with these arrangements were determined to have an aggregate fair value of approximately $(1,040,851) at issuance, which was recorded as a debt discount. The notes do not bear stated interest and are accreted to their face value over the term of the instruments using the effective interest method of 12.81%. During the year ended December 31, 2025, the Company recognized approximately $366,255 of interest expense related to the amortization of the debt discount using the effective interest method. After repayments and amortization of the debt discount, the carrying value of these notes was $1,017,184 as of December 31, 2025. The promissory notes are unsecured and mature one year and one day from their respective issuance dates.

Promissory Notes Payable

The Company had two unsecured promissory notes outstanding with an aggregate principal balance of approximately $310,000 as of December 31, 2025. These notes were assumed as part of the Grid AI acquisition. Each note bears interest at a rate of 2.0% per annum and is payable in a lump sum at maturity. The notes mature on the earlier of (i) January 1, 2026 or (ii) two business days following the Company’s receipt of $1.5 million or more in financing from one or more sources other than the holders. The notes are unsecured and may be prepaid by the Company at any time without penalty. The agreements contain customary events of default, including non-payment, covenant breaches and bankruptcy-related events, which would result in acceleration of amounts due. As a subsequent event, the Company is evaluating repayment or refinancing of these obligations following the January 1, 2026 maturity date.