NOTE 12. SUBSEQUENT EVENTS

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events from June 30, 2026, through August 11, 2026, the date these unaudited consolidated financial statements were available to be issued. Other than the continuing matters described below, no subsequent events have been identified that would require recognition or disclosure in these unaudited consolidated financial statements.

Eva Defense Inc. and Eva Live Inc. Services Agreement

On August 5, 2026, the Company executed a Service Agreement with Eva Defense Inc. and Eva Live Inc. (Nasdaq: GOAI), the parent of Eva Defense Inc., each with its principal place of business in Las Vegas, Nevada, under which the Company will act as service provider for the EVA Defense Resilient Communications Drone Program. The agreement provides for a fixed monthly fee of $100,000 payable on or before the first day of each month for twelve months, from August 5, 2026 through July 31, 2027, an aggregate of $1,200,000, which the agreement states constitutes a firm and non-cancelable commitment. Eva Defense Inc. and Eva Live Inc. are jointly and severally liable for all obligations under the agreement. Termination for convenience is not permitted, and repudiation or termination without cause obligates the counterparties to pay an early termination charge equal to the aggregate monthly fees that would otherwise have become due through July 31, 2027. Performance is scheduled to commence on August 5, 2026. This is the Company’s first revenue-generating customer contract. Because the agreement was executed and performance commences after June 30, 2026, no revenue receivable, or contract asset, has been recognized in these unaudited consolidated financial statements. Management has concluded that the Company acts as principal in the arrangement under ASC Topic 606 and expects to present revenue on a gross basis beginning in the third quarter of 2026. See Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Critical Accounting Policies and Estimates.”

Ascendant AI LLC Subcontract

On August 5, 2026, the Company executed a General Services Agreement with Ascendant AI LLC under which Ascendant will perform the development services required for the Company's performance of the EVA Defense Resilient Communications Drone Program described above. This agreement is separate from, and in addition to, the June 22, 2026, General Services Agreement with Ascendant covering WaveDrone development described in Notes 7 and 8. The agreement provides for a fixed equal monthly fee for twelve months beginning August 5, 2026, an aggregate of $960,000. Ascendant is a related party of the Company because Mr. Craig Nehrkorn, the Company’s Chief Executive Officer and director, serves as Ascendant’s Managing Partner. No amount was due or payable under this agreement at June 30, 2026. See Note 7 — Related Party Transactions.

Continuing Patent Prosecution

The Company’s patent counsel, Amsel IP Law (Mr. Jason Amsel; matter reference BLMR-001P), is continuing to advise the Company regarding prosecution and protection of the WaveDrone patent rights described in Note 8. No event has occurred between June 30, 2026, and August 11, 2026, that, in management’s view, indicates impairment of the related WaveDrone intangible asset.

Registered Offering

The Company’s Registration Statement on Form S-1 (File No. 333-292164) was declared effective by the SEC on June 29, 2026, prior to the balance sheet date; see Note 3. The registered offering of 125,000 shares of common stock at $2.00 per share is being conducted on a self-underwritten, best-efforts basis. As of August 11, 2026, the Company had not sold any shares or received any proceeds under the registered offering.