NOTE 6 - COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

As at March 31, 2026, the Company has outstanding borrowings under various loan agreements with multiple lenders, most of which are in default. Certain borrowings are secured by the Company’s assets, including equipment, investments and receivables. In the event of default, lenders may have the right to seize collateralized assets.

Steven Barber

As part of the Company’s acquisition of Alternative Medical Solutions Inc. (“AMS”) in 2018, the Company is currently reviewing with legal counsel to ascertain whether it has claims against Steven Barber arising out of his default of the consulting agreement the Company entered into as part of the AMS acquisition (the “Consulting Agreement”). In January 2020, the Company received correspondence from counsel for Mr. Barber demanding payment on amounts purported to be due pursuant to his Consulting Agreement with the Company. The Company has reviewed whether Mr. Barber has performed pursuant to the terms of the Consulting Agreement and noticed concerns. 

No decision on whether to proceed on either of these situations has been reached as at the date of this Report, but the Company does not believe that these situations present a probability of material risk. As of March 31, 2026, the Company has an outstanding payable of $549,780 included in accounts payable and accrued liabilities (December 31, 2025 - $549,780).

Deloitte LLP

On July 18, 2024, Deloitte LLP (“Deloitte”) filed a civil claim in the Alberta Court of Justice, alleging a breach of contract. Deloitte was engaged by the Company to assist with fiscal year 2022 finance backfill and diagnostic services and in accordance with a signed engagement letter dated August 29, 2022, proceeded to perform the professional services. Deloitte pleads that it has discharged its responsibilities and delivered its accounts to the Company. The Company acknowledged the satisfactory completion of services and the debts rendered but made no further payment as agreed other than an instalment payment on April 18, 2024. Deloitte is seeking recovery of the amount owed. As of March 31, 2026, the amount payable for services from Deloitte included in accounts payable and accrued liabilities was $33,953 (December 31, 2025 - $34,530).

Former Executives

Former executives John Cassels and Andrew Steedman (collectively the “plaintiffs”) have filed a lawsuit against the Company alleging wrongful termination, related misconduct, and unpaid compensation. The plaintiffs seek $3 million in compensatory damages and an additional $3 million in punitive damages. During the three months ended March 31, 2026, the Company had a deposition related to the lawsuit which did not result in any material change to the status of the lawsuit. As of March 31, 2026, the Company maintains an accrual of approximately $916,000 for unpaid salaries owed to the plaintiffs for services rendered from April 2019 through June 2023. No additional loss contingency has been recorded, as the lawsuit remains in its early stages and the ultimate outcome is uncertain. The Company actively monitors this matter and will update its assessment as additional information becomes available.

Astor Street LLC

Astor Street LLC was issued two promissory notes by the Company in January 2021 and granted a security interest in all present and after acquired assets of the Company. Astor Street LLC commenced a claim to recover the amounts owing for CAD $312,303 in April 2022, obtained default judgment in the amount of CAD $314,273 in March 2023. On September 30, 2025, Astor Street LLC took steps to seize assets belonging to the Company. The Company is currently assessing the validity of the claim and default judgment, and whether it is necessary to come to a negotiated resolution. As of March 31, 2026, the amounts payable for promissory notes to Astor Street LLC included in notes payable was $215,223 (CAD $300,000) (December 31, 2025 - $218,882 (CAD $300,000)).