NOTE 12— COMMITMENTS AND CONTINGENCIES

Consulting Agreement with 180 Consulting

On March 19, 2020, the Company entered into a Master Services Agreement (the “MSA”) with 180 Consulting, pursuant to which 180 Consulting has provided and will continue to provide a variety of consulting services in support of eValuator products including product management, operational consulting, staff augmentation, internal systems platform integration and software engineering services, among others, through separate executed statements of work (“SOWs”). On September 20, 2021, the Company entered into a separate MSA in support of Avelead products. As of December 2023, all outstanding SOWs under both MSAs were effectively replaced by two new SOWs. As of the end of fiscal 2024, there were two active SOWs under the eValuator MSA, and no active SOWS under the Avelead MSA. One of the active SOWs include the ability to earn stock at a conversion rate to be calculated 20 days after the execution of the related SOW. The MSA includes a termination clause upon a 90-day written notice. While no related party has a direct or indirect material interest in this MSA or the related SOWs, individuals providing services to us under the MSA, and the related SOWs may share workspace and administrative costs with 121G Consulting LLC (“121G”). 180 Consulting earned 117,396 shares for the year ended January 31, 2025 and has earned an aggregate of 218,581 shares through January 31, 2025. 180 Consulting earned 37,647 shares for the year ended January 31, 2024 and earned an aggregate of 98,660 shares through January 31, 2024. For services rendered by 180 Consulting, the Company recorded total cash fees of $2,538,000 and non-employee stock compensation of $615,000 for fiscal 2024 as compared to $2,580,000 and $582,000, respectively, for fiscal 2023. In addition, as of the date of this report, the Company has not issued to 180 Consulting an aggregate of 62,928 shares as compensation for services previously rendered during the six months ended January 31, 2025. Such 117,396 shares earned during the current fiscal year will be issued in reliance on an exemption from registration available under Section 4(a)(2) of the Securities Act.

Inclusive of the MSA executed with 180 Consulting are SOWs that provide for the Company to sublicense a software through 180 Consulting that is owned by 121G. This is a services agreement for access to software that assists the Company in implementing and integrating with our clients’ technology. The license agreement is designed such that there is no material financial benefit that accrues to 121G. 180 Consulting licenses the software from 121G at cost. The Company paid approximately $568,000 and $563,000 for the SOWs that include the sublicense agreement in each of the fiscal years ended January 31, 2025 and 2024, respectively, which are included in the aforementioned totals above.

Litigation

We are, from time to time, a party to various legal proceedings and claims, which arise in the ordinary course of business. We are not aware of any legal matters that are reasonably possible to have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows.