NOTE 8 – RELATED PARTY TRANSACTIONS

The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures.

Related Party Balances

As of January 31, 2026, and 2025, amounts due to related parties and former related parties were as follows:

During the year ended January 31, 2026, the Company settled or otherwise extinguished a total of approximately $7,369,505 of related party obligations, including accrued compensation, advances, notes payable, and related accrued interest. These obligations were settled through the issuance of common stock at a stated price of $0.70 per share. For accounting purposes, the transactions were measured based on the estimated fair value of the Company’s common stock of approximately $0.265 per share at the date of issuance, in accordance with ASC 820, Fair Value Measurement.

Certain obligations assumed in connection with the dissolution of Ga-Du Corporation, including amounts owing to former executives and consultants (including S. Randall Oveson), are disclosed in Note 3 – Divestiture of Subsidiary and are not duplicated herein.

As a result of these transactions, the Company recognized gains on settlement of related party obligations in accordance with ASC 470-50, Debt—Modifications and Extinguishments. These related party obligations were settled on the same terms as contemporaneous settlements with unrelated creditors; accordingly, the resulting gains are recognized in the statement of operations under ASC 470-50 and do not represent capital contributions.

Former Related Parties – Amounts Owing, Settled, and Shares Issued

The Company had outstanding obligations to former directors and related parties arising primarily from accrued compensation, notes, and advances. During the year ended January 31, 2026, these balances were settled through the issuance of common stock.

In aggregate, the Company settled approximately $996,002 of obligations to former related parties during the year ended January 31, 2026, through the issuance of approximately 1,422,861 shares of common stock at a stated price of $0.70 per share.

For accounting purposes, the fair value of the shares issued was approximately $377,058, based on a price of $0.265 per share. Accordingly, the Company recognized a gain on settlement of former related party obligations of approximately $618,944, representing the difference between the carrying value of the liabilities extinguished and the fair value of the common stock issued.

Current Related Parties – Amounts Owing, Settled, and Shares Issued

Executive Compensation and Advances – Michael Rountree

Advances made by Mr. Rountree to fund the Company’s operations were made in his capacity as an executive officer with an expectation of repayment and were recorded as liabilities. The settlement of these advances, and of accrued compensation owing to Mr. Rountree, through the issuance of common stock on the same terms accepted by unrelated creditors was accounted for as an extinguishment of debt under ASC 470-50, with the resulting gain recognized in the statement of operations and no amount treated as a capital contribution. See the Company’s accounting policy for related party debt settlements above.

The Company has an executive employment arrangement with Michael Rountree, pursuant to which he serves in executive roles including Chief Executive Officer and Chief Financial Officer. Under the terms of the agreement, Mr. Rountree is entitled to an annual base salary of $250,000, which accrues when not paid.

The Company recorded compensation expense of $250,000 for each of the years ended January 31, 2026 and 2025. As of January 31, 2026, accrued and unpaid compensation totaled $1,690,000. On January 31, 2026, the Company settled accrued compensation in full through the issuance of 2,414,286 shares of common stock at a stated price of $0.70 per share.

In addition, Mr. Rountree advanced funds to the Company to support operating activities. As of January 31, 2025, outstanding advances totaled $322,883. During the year ended January 31, 2026, the Company settled a total of $337,480 of advances through the issuance of 482,115 shares of common stock at a stated price of $0.70 per share.

The Company also settled amounts due related to licensing arrangements totaling $12,794 through the issuance of 18,277 shares of common stock at a stated price of $0.70 per share.

In aggregate, the Company settled a total of approximately $2,040,274 of accrued compensation, advances, and other related party obligations with Mr. Rountree through the issuance of approximately 2,914,677 shares of common stock at a stated price of $0.70 per share.

For accounting purposes, the fair value of the shares issued was approximately $772,390, based on a price of $0.265 per share. Accordingly, the Company recognized a gain on settlement of approximately $1,267,884.

Notes Payable – Rountree Consulting

The Company has historically received funding from Rountree Consulting, Inc., a company controlled by Michael Rountree, in the form of promissory notes issued over multiple periods. These notes bear interest at a rate of 1% per annum and are generally due within nine months of issuance.

Immediately prior to settlement on January 31, 2026, the total outstanding balance of principal and accrued interest related to these notes was $4,333,229 (January 31, 2025 – $3,935,565). On January 31, 2026, the Company settled the outstanding balance in full through the issuance of 6,190,326 shares of common stock at a stated price of $0.70 per share.

In aggregate, the Company settled $4,333,229 of obligations through the issuance of common stock. For accounting purposes, the fair value of the shares issued was approximately $1,640,437, based on a price of $0.265 per share. Accordingly, the Company recognized a gain on settlement of approximately $2,692,792.

Other

On January 28, 2021, the Company entered into indemnification agreements with Michael Rountree, A. Carl Mudd, and S. Randall Oveson in their capacities as officers and/or directors. Under these agreements, the Company has agreed to indemnify such individuals to the fullest extent permitted by applicable law for claims and liabilities arising from their service to the Company.