Note 5 - Investment in Manako Labs Ltd.

On May 28, 2026, the “Company entered into a Technology License and Distribution Agreement (the “TLDA”) with Manako Labs Ltd, a company organized under the laws of England and Wales (“Manako”). The TLDA establishes an integration partnership combining Manako’s Score AI computer vision platform operating on Bittensor Subnet 44 and related technologies with the Company’s North American enterprise relationships, commercial infrastructure, and public market credibility. See Note 10 - Revenue Recognition - Manako Technology License and Distribution Agreement for further discussion on the TLDA.

Concurrently with the TLDA, we entered into a Simple Agreement for Future Equity (the “SAFE”) pursuant to which we invested $1.0 million in Manako (the “Manako Investment”), and a related SAFE Side Letter Agreement (the "SAFE Side Letter Agreement") providing us with certain information, key-person notice, and pro rata investment rights. The TLDA’s commercial terms, including Manako’s platform-availability obligations and our revenue-share payment obligations, did not become operative until we funded the full SAFE investment amount, which occurred on May 29, 2026 (the “Commercial Commencement Date”).

Under the SAFE, upon a future qualifying equity financing by Manako, the SAFE will automatically convert into shares of Manako capital stock at a conversion price equal to the lesser of (i) $40,000,000 divided by the number of shares of Manako outstanding immediately prior to such financing on a fully diluted basis, or (ii) 80% of the lowest price per share paid by investors in such financing (i.e., a 20% discount), whichever results in the greater number of shares issued to the Company. The SAFE also entitles the Company to a liquidation-preference-like payment upon a liquidity or dissolution event equal to the greater of the Company’s $1,000,000 investment or its as-converted value, and will automatically convert into Manako ordinary shares on December 1, 2027 (the “Longstop Date”) if no equity financing, liquidity event, or dissolution event has occurred before that date. Pursuant to a related SAFE Side Letter Agreement, Manako granted the Company certain information rights, notice rights regarding changes to Manako’s key personnel, and the right to subscribe for its pro rata share of shares issued in Manako’s next equity financing.

The SAFE requires the Company to receive equity securities (or a cash payment only upon a liquidity or dissolution event that neither party can unilaterally force), and it does not permit routine net cash settlement. The SAFE does not provide the Company with significant influence over Manako — the Company receives no voting rights, board representation, or participating rights over Manako’s operating and financing decisions.

Accordingly, the Company has accounted for the Manako Investment as an equity security without a readily determinable fair value under ASC 321-10-35-2 (the “measurement alternative”). The Manako Investment is initially measured at cost and is subsequently remeasured only for (a) impairment and (b) observable price changes in orderly transactions for identical or similar Manako securities. As of June 30, 2026, the carrying value of the Manako Investment was $1,000,000, and the Company had not identified any observable price changes or indicators of impairment. The Company will continue to monitor Manako’s cash runway, financing activity, and the operational status of the Bittensor Subnet 44 network on which Manako’s platform depends, for indicators of impairment or observable transactions requiring remeasurement in future periods. The Manako Investment is included as an equity investment on the Company’s Condensed Consolidated Balance Sheet.