| ACCRUED LIABILITIES |
NOTE 3 - ACCRUED LIABILITIES
Accrued liabilities consist
of the following as of:
| Schedule of accrued liabilities | |
| | | |
| | |
| |
June 30, 2025 | | |
June 30, 2024 | |
| Accrued payroll deductions owed to government entities | |
$ | 50,988 | | |
$ | 49,452 | |
| Accrued bonuses to an officer (1) | |
| 2,625,000 | | |
| 875,000 | |
| Accrued salaries (2) | |
| 132,377 | | |
| – | |
| Accrued vacation | |
| 174,108 | | |
| 164,884 | |
| Accrued commission for service providers | |
| 69,318 | | |
| 15,000 | |
| Accrued marketing development funds (3) (4) | |
| 673,205 | | |
| 247,592 | |
| Other accrued liabilities (5) | |
| 72,048 | | |
| 73,218 | |
| Total | |
$ | 3,797,044 | | |
$ | 1,425,146 | |
| (1) | On November 10, 2022, the Company and OC Kim, its President, entered into an amendment of the employment
agreement dated September 7, 2021. The amendment provides for the payment of an incentive to Mr. Kim, of $125,000 for each calendar quarter
during the remaining four-year term of the employment agreement, for an aggregate total of $2 million, with the first such bonus accrued
on December 31, 2022. Incentive bonuses of $500,000 have been accrued for each of the years ended June 30, 2025 and 2024, resulting in
accrued bonus balances of $1,375,000 and $875,000 as of June 30, 2025 and 2024, respectively. As of June 30, 2025, no payment for the
accrued bonuses has been made by the Company. |
On September 23, 2024, the Board acknowledged
that Mr. Kim had earned an incentive bonus of $1,250,000 for negotiating and securing a joint venture agreement which resulted in the
organization of Sigbeat. The Company and Mr. Kim entered into a Forbearance Agreement, dated September 23, 2024, under which Mr. Kim agreed
to defer the bonus, in exchange for the Company’s agreement to allow Mr. Kim to defer payment of the $1,000,000 settlement amount
owed by Mr. Kim to the Company under a Settlement Agreement, dated June 12, 2024. On January 16, 2025, there was a completed contribution
for Common Stock of Sigbeat, and the Company accrued the deferred incentive bonus of $1,250,000 to Mr. Kim. As of June 30, 2025, no payment
for the accrued has been made by the Company.
| (2) | The Company accrued regular salaries of $132,377 to employees for the payroll period ended June 30, 2025,
and the payment of the accrued salaries was made by the Company on July 1, 2025. |
| (3) | The Company accrued a liability for marketing development funds owed to a customer of $673,205 to provide
financial support for its marketing and promotion programs of our products for the year ended June 30, 2025. |
| (4) | The Company accrued a liability for marketing development funds owed to a customer of approximately $650,000
to provide financial support for its marketing and promotion programs during the 2021 fiscal year. Of the amount accrued, total payments
were made of approximately $400,000 in the form of credit memos. The remaining balance of approximately $250,000 as of June 30, 2024,
was eliminated/written-off as of September 30, 2024 because it was confirmed that the liability no longer existed. |
| (5) | On or about December 7, 2023, the Company received an invoice from our prior landlord, Hunsaker &
Associates, requesting payment of additional rent on its completed and expired lease of office space located at 9707 Waples Street, San
Diego, CA as of December 31, 2023. This invoice of $142,978 purports to represent charges for variable cost increases during the prior
7 years of the lease, which was discounted by $46,274 and adjusted down to $96,704 for the three months ended June 30, 2024. The Company
is currently reviewing these charges and will be requesting further validation of these charges, in accordance with its rights granted
under the lease. For the year ended June 30, 2024, the Company recorded an additional rent expense of $96,704 and an accrued liability
of $72,048 reflecting this pending invoice and a credit of $24,656 for our deposit on the leasehold property. |
|