Note 9 – Commitments and Contingencies

Operating Leases

The Company accounts for leases in accordance with ASC 842: Leases, which requires lessees to apply the right-of-use (ROU) model by recognizing a right-of-use asset and a lease liability for all leases with terms exceeding 12 months. Lease classification determines the pattern of expense recognition in the consolidated statement of operations:

Lessors classify leases as sales-type, direct financing, or operating leases based on whether they transfer risks, rewards, and control of the asset:

Lease Recognition and Measurement

The Company evaluates whether an arrangement contains a lease at inception and recognizes the lease in the financial statements upon lease commencement (the date the underlying asset is available for use). ROU assets represent the Company’s right to use an asset over the lease term, while lease liabilities reflect the present value of future lease payments.

At lease commencement:

Practical Expedients and Lease Components

The Company applies certain practical expedients to simplify lease accounting:

Lease Term and Expense Recognition

Company Lease Commitments

As of June 30, 2024 and December 31, 2024, the Company had no finance leases under ASC 842.

The Company leases its headquarters office. During the year ended December 31, 2020, the Company entered into an office lease for its administrative operations, (the “Saratoga lease”). The Saratoga lease is for a 48.5-month term, with an original expiration date of July 31, 2024, and an initial monthly payment of $8,819. Straight-line rent per month was calculated at $9,522.

As of March 31, 2023, the Company was in default for the Saratoga Lease due to non-payment. Subsequent to March 31, 2023, the Company terminated the Saratoga Lease and entered into a settlement agreement with the landlord.

On January 30, 2023, the Company entered a new lease for its headquarters office, (the “Suite 200 Lease”) for a 60-month lease with an expiration date of January 31, 2028 with an initial monthly payment of $7,943.

The tables below present information regarding the Company's operating lease assets and liabilities at June 30, 2025 and December 31, 2024, respectively:

Future minimum lease payments under non-cancellable leases for the six months ended June 30, 2025 were as follows:

Contingencies – Legal Matters

The Company is subject to litigation claims arising in the ordinary course of business. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.

As of June 30, 2025 and December 31, 2024, respectively, the Company is not aware of any litigation, pending litigation, or other transactions that would require accrual or disclosure, except for the following:

Gladiator

Historically, the Gladiator brand has been an important part of the Company and an area of focus for future growth and development.  Unfortunately, because the Company has been seeking damages from the prior management of Gladiator, the future of the brand has been uncertain.  While the Company is confident that it will prevail in litigation, management remains hesitant to invest additional resources in developing the brand before the outcome of the litigation has been adjudicated.  Accordingly, brand development efforts remain in a holding pattern, but management intends to reinvest and relaunch the brand once they have clarity about its future.  We continue to believe that the strength of the brand is an asset to the Company based on the reputation and recognition that it commands in the market.  The operations, while significantly pared back, are active but Gladiators future operations are uncertain.