Note 10 - Revenue Recognition - Manako Technology License and Distribution Agreement

On May 28, 2026, the Company entered into the TLDA with Manako, under which Manako granted the Company a non-exclusive, non-transferable, sublicensable license during the License Term to market, demonstrate, sell, and distribute Manako’s Score AI computer vision platform (the “Platform”) to enterprise customers in the United States and Canada (the “Territory”). The TLDA has an initial one-year term beginning May 28, 2026, which automatically renews for successive 12-month periods unless either party gives at least 60 days’ prior notice of non-renewal. The Platform is a computer vision technology that operates on Bittensor Subnet 44, an external, third-party-operated blockchain subnet not controlled by the Company or, following certain governance actions described below, entirely by Manako.

The Company contracts directly with Territory end-customers under customer agreements (the "Customer Agreements") it negotiates, controls pricing within Manako’s established pricing floor, and is primarily responsible for first-level customer support and overall fulfillment of the customer relationship, while Manako retains ownership of the underlying platform intellectual property and provides second-level support. Applying the indicators of control in ASC 606-10-55-36 through 55-40, the Company concluded it acts as principal in Customer Agreements it enters into directly, and recognizes gross net revenue ("Net Revenue") from those arrangements as it satisfies its performance obligation of providing access to and use of the Platform together with first-level support. In consideration for the license and rights granted under the TLDA, the Company pays Manako a revenue share equal to a certain percentage of Net Revenue (the "Revenue Share"), which the Company records as a variable, usage-based cost of revenue rather than as a reduction of revenue. Net revenue is defined generally as gross revenue received from customers under Customer Agreements, less refunds, credits, applicable taxes, and third-party payment processing fees.

Where Manako instead enters into a direct customer agreement with a Territory customer that was sourced by the Company, is a previously agreed Company-named account, or was closed with the Company’s material involvement, Manako pays the Company a referral fee equal to a certain percentage of the customer contract value. Where Manako sources, leads, and closes a Territory opportunity directly without the Company’s material involvement (subject to customary exclusions for Manako’s pre-existing relationships), Manako pays the Company a market development fee equal to a certain percentage of the first twelve months of the customer contract value, provided the Company has maintained an active Territory commercial program. The Company recognizes referral fees and market development fees received from Manako as revenue when earned under the applicable provisions of the TLDA. 

The commercial terms of the TLDA, including Manako’s obligation to make the Platform available and the Company’s obligation to pay the Revenue Share, did not become operative until the Company funded the SAFE investment described in Note 5 - Investment in Manako Labs Ltd. on May 29, 2026.

As of June 30, 2026, the Company has not recognized any revenue or associated Revenue Share cost of revenue under Customer Agreements entered into pursuant to the TLDA.

Subnet Disruption Event. Because the Platform operates on Bittensor Subnet 44, its availability depends on the continued operation of that third-party network. The TLDA defines a “Subnet Disruption Event” to include the suspension or material reduction of network emissions to Subnet 44, adverse governance actions affecting Subnet 44, deregistration or forced migration of Subnet 44, or material disruption to the arrangements between Manako and the other parties that operate or support Subnet 44. During any Subnet Disruption Event, Manako’s platform-availability obligations and the Company’s obligation to pay the Revenue Share are both suspended, and if a Subnet Disruption Event continues for more than 20 consecutive days, the Company may terminate the TLDA immediately upon written notice.