v3.26.1
NOTES PAYABLE AND LOAN FACILITY
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
NOTES PAYABLE AND LOAN FACILITY

NOTE 7 - NOTES PAYABLE AND LOAN FACILITY

 

Shareholder, Convertible and Contingently Convertible Notes Payable

 

The following table summarizes shareholder, convertible and contingently convertible notes payable:

 

   March 31,   December 31, 
   2026   2025 
         
Shareholder, convertible and contingently convertible notes  $19,500   $19,500 
Accrued interest   12,324    11,934 
           
Total shareholder notes and accrued interest   31,824    31,434 
           
Less: current maturities   (31,824)   (31,434)
           
Total long-term debt  $-   $- 

 

Shareholder Convertible Notes Payable

 

During the year ended December 31, 2018, the Vystar issued shareholder contingently convertible notes payable, some of which were for contract work performed by other entities in lieu of compensation and expense reimbursement, totaling approximately $338,000. The notes are (i) unsecured, (ii) bear interest at an annual rate of five percent (5%) from date of issuance, and (iii) are convertible at Vystar’s option post April 19, 2018. The notes mature one year from issuance but may be extended one (1) additional year by Vystar. If converted, the notes plus accrued interest are convertible into shares of Vystar’s common stock at the prior twenty (20) day average closing price with a 50% discount. The notes matured in January 2020 and continue to accrue interest at an annual rate of eight percent (8%) in arrears until settlement. All of these notes except one were settled in April 2022. The remaining note of $19,500 is in default at March 31, 2026 and December 31, 2025.

 

During the year ended December 31, 2021, the Company issued certain contingently convertible promissory notes in varying amounts to existing shareholders which totaled $290,000. The notes are unsecured and bear interest at an annual rate of five percent (5%) from date of issuance. The face amount of the notes represents the amount due at maturity along with the accrued interest. The conversion of the notes was dependent on the spin-off of RxAir. Since the spin-off of RxAir did not occur, the Company converted these notes into common stock in 2025.

 

In January 2025, the Company offered two conversion options to the holders of the 2021 contingently convertible promissory notes. Shareholders were given an opportunity to purchase additional shares of the Company’s common stock at a reduced cost of $.02 per share. For those shareholders, their promissory notes would be converted for common stock at a price of $.035. For those shareholders who did not purchase additional shares of the Company’s common stock, the conversion price would be $.16 per share. The Company received $125,000 through March 31, 2025 and $10,000 subsequently from shareholders who selected this conversion option.

 

In summary, the notes were converted into 5,137,310 shares of the Company’s common stock and a loss on the settlement of debt of $93,620 was recorded. An additional 6,250,000 shares will be issued for the purchases received through March 31, 2025.

 

Prior to conversion in January 2025, the Company recorded accrued interest of $1,844 for the three months ended March 31, 2025 on these notes.

 

 

Related Party Debt

 

The following table summarizes related party debt:

 

   March 31,   December 31, 
   2026   2025 
         
Rotman Family convertible notes  $838,807   $838,807 
Rotman Family nonconvertible note   140,000    140,000 
Accrued interest   138,530    110,130 
Debt discount   (58,745)   (117,490)
           
Due to related party   1,058,592    971,447 
Less: current maturities   (1,058,592)   (971,447)
           
Due to related party, noncurrent  $-   $- 

 

Rotman Family Convertible Notes

 

On August 17, 2021, the Company issued a contingently convertible promissory note totaling $5,000 to Jamie Rotman. The note is unsecured and bears interest at an annual rate of five percent (5%) from date of issuance. The face amount of the note represents the amount due at maturity along with the accrued interest. The conversion of the note was dependent on the spin-off of RxAir. Since the spin-off did not occur, the Company intends to review this note in 2026. The balance of the note payable including accrued interest to Jamie Rotman is approximately $6,000 at March 31, 2026 and December 31, 2025. The Company recorded accrued interest of $100 for the three months ended March 31, 2026 and 2025, respectively, on this note.

 

On December 31, 2025, the Company entered into a term convertible promissory note with Blue Oar. The Company may borrow amounts up to $1,000,000 at an interest rate of 12% per annum. Prior working capital advances and accrued interest totaling $847,265 were rolled into this note agreement. Monthly installment payments of principal and interest of $7,500 are payable beginning on January 1, 2026 with a balloon payment due on July 1, 2026. Blue Oar may elect to receive payments in Preferred Series C stock at a discounted rate of 50% of the market rate based on any two days within the prior twenty day’s closing price, no less than $.01 (the “Floor”). The note carries a $50,000 closing fee. In addition, the lender required there be no conversions of any class of preferred stock until the loan is paid in full. Based on the variable redemption feature, the Company recorded a derivative liability of $423,632 at December 31, 2025.

 

The following table summarizes the Rotman Family Convertible Notes:

 

          March 31,   December 31, 
          Carrying Amount 
          March 31,   December 31, 
   Issue Date  Principal Amount   2026   2025 
Jamie Rotman 5% note due August 2024  8/17/2021  $5,000   $6,564   $6,464 
Blue Oar 12% note due July 2026  12/31/2025   833,807    923,815    897,265 
                   
Carrying amount     $838,807    930,379    903,729 
Less: debt discount           (58,745)   (117,490)
                   
Convertible notes net           871,634    786,239 
Less: current maturities           (871,634)   (786,239)
                   
Convertible notes noncurrent          $-   $- 

 

Rotman Family Nonconvertible Note

 

In connection with the acquisition of 58% of Rotmans, Bernard Rotman was issued a related party note payable in the amount of $140,000. The note bears interest at an annual rate of five percent (5%) and matures four years from issuance. Payments of $2,917 per month were scheduled to begin six months from issuance until maturity in December 2023. The note is in default at March 31, 2026. The balance of the note payable including accrued interest to Bernard Rotman is approximately $187,000 and $185,000 at March 31, 2026 and December 31, 2025, respectively. Accrued interest for the three months ended March 31, 2026 and 2025 totaled $1,750.

 

 

 

The following table summarizes the Rotman Family Nonconvertible Note:

 

          March 31,   December 31, 
          Carrying Amount 
          March 31,   December 31, 
   Issue Date  Principal Amount   2026   2025 
Bernard Rotman 5% note due December 2023  7/18/2019  $140,000   $186,958   $185,208