NOTE 3 – RELATED PARTY TRANSACTIONS

Jenifer Osterwalder, the Company’s Chief Executive Officer

Jenifer Osterwalder, the Company’s Chief Executive Officer, charges the Company $12,000 per month beginning January 1, 2021 for services rendered. Total amounts expended in the Company's consolidated financial statements in connection with the CEO's services were $144,000 and $144,000 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, amounts due to the CEO related to accrued salaries were $432,000 and $288,000, respectively.

From time to time due to the limited cash flow available, the Company's CEO pays certain operating expenditures on behalf of the Company. These advances bear no interest and are due on demand. As of December 31, 2024 and 2023, the Company's CEO was due $0 and $6,150 in connection with these advances, respectively. During the year ended December 31, 2024, the Company issued 68,311 shares of common stock in satisfaction of $6,150 in advances.

During the year ended December 31, 2024, the Company received $550,700 in total demand advances from the Chairman of the Board of Directors, Sean Michael Brehm.  These advances are documented under a promissory note dated November 14, 2024 (“Note”).  The Note provides for up to $2,500,000 in advances under the Note by Mr. Brehm to Spectral.  The Note must be repaid by the Company, including accrued interest at 4% APR at the end of five years.  As of December 31, 2024, accrued interest on the note was insignificant to the financial statements. The Note balance may be applied to the exercise of Mr. Brehm’s options to acquire common stock in the Company at any time while the Note is outstanding. Subsequently, the Company entered into a settlement agreement with Sean Brehm and affiliated entities to rescind all prior agreements and no longer owes Mr. Brehm compensation for the demand advances (see Note 7).

Sean Michael Brehm, the Company’s Chairman and a member of the board of directors, is also the sole shareholder of NNN, which the Company has acquired in exchange for 1,000,000 shares of newly designated Series Quantum Preferred Stock effective August 29, 2024; see Note 4.  In connection with the acquisition, Sean Michael Brehm also purchased 5,050,000 of the Company’s common shares at $0.20 per share for a total purchase price of $1,010,000. Due to the related party and common control nature of this transaction, the acquisition was accounted for at the carrying value of the acquired net assets of NNN. Assets acquired consisted of approximately $4,955 in cash. The pre-acquisition financial results of NNN were not significant. Due to the cancellation, the initial transaction recorded at par value.

Prior to the close of the acquisition, the Company paid approximately $145,000 to NNN for development services. Subsequently, on November 13, 2024, the transaction was rescinded. The 1,000,000 Series Quantum Preferred Shares that were issued have been assigned to a new Delaware corporation, controlled by Sean Michael Brehm, which was assigned the intellectual property previously owned by NNN.  The new entity was recently established and had no operations. See Note 7 for subsequent event regarding the return of the 1,000,000 Series Quantum Preferred Shares.