Note 11. Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. The Company has not recorded any amounts for loss contingencies as of June 30, 2026. The Company records legal expenses associated with such contingencies as incurred. On June 10, 2026, a purported securities class action complaint was filed against the Company and certain of its officers in the United States District Court for the Southern District of California. The complaint alleges violations of the federal securities laws and seeks damages, costs, and other unspecified relief. No lead plaintiff has been appointed, and no class has been certified. The Company believes the claims are without merit and intends to defend the matter vigorously.

The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of the Company’s management and other resources that would otherwise be engaged in other activities. If the Company is unable to prevail in any such legal proceedings, its business, results of operations, liquidity, and financial condition could be adversely affected.