NOTE 6. COMMITMENTS & CONTINGENCIES

Legal Proceedings

We were not subject to any legal proceedings during the six months and the three months ended March 31, 2026 or March 31, 2026 and, to the best of our knowledge, no legal proceedings are pending or threatened.

Contractual Obligations

On August 18, 2023, and modified in August, 2024, the Company entered into a Patent and Know-How License Agreement (the “License Agreement”) with Defiant Technologies Inc. (“Defiant”). Pursuant to the License Agreement, among other things, Defiant granted the Company a nontransferable, non-sublicensable, exclusive right and license to certain patents and know-how relating to animal testing and all commercial applications related to the animal market on a global basis (“Patent Rights”, “Know-How”, and “Materials”, respectively) to manufacture, use, offer for sale, sell or import (“Licensed Products”) in the animal market worldwide. The license is exclusive (subject to certain exceptions and conditions) with respect to the Patent Rights and Materials and non-exclusive with respect to the Know-How.

As consideration for the license under the License Agreement, the Company has agreed to make an initial payment of $50,000, which was due 30 days from the effective date of the License Agreement (or, at Defiant’s discretion, $225,000 in a lump sum within 45 days from the effective date). Further, in consideration of the rights and licenses granted under the License Agreement, the Company is required to pay Defiant a royalty of 3% of net sales of all Licensed Products in the field of use throughout the world during the term of the License Agreement. To date, we have paid $200,000 ($40.000 during the quarter and the six months  ended March 31, 2026) to Defiant and we are current under the License Agreement. Further, in consideration of the rights and licenses granted under the License Agreement, the Company is required to pay Defiant a royalty of 3% of net sales of all Licensed Products in the field of use throughout the world during the term of the License Agreement. We have also paid $110,230 for VOCAM units (including $55,433  during the quarter ended March 31, 2026) and six-months ended March 31, 2026 and as a result we are in good standing under the License Agreement. We also paid $5,511 as a deposit on an additional VOCAM unit as of March 31, 2026. Further, in consideration of the rights and licenses granted under the License Agreement, the Company is required to pay a royalty of 3% of net sales of all Licensed Products in the field of use throughout the world during the term of the License Agreement. We did not accrue royalties during the quarter due to their immaterial nature but expect to begin paying royalties in early 2026 upon completion of an extension of our contract with Defiant.