NOTE 6. PROMISSORY NOTE AND INTEREST

On July 20, 2022, the Company entered into a 2-year promissory note of $13,000 with a related party to finance the acquisition of patent licenses used in its drone business. On July 20, 2024, the promissory note was extended with a maturity date of July 17, 2027. The promissory note bears interest of 12%. During the three and six months ended June 30, 2026, related interest expense of $303 and $688 respectively (2025 – $389 and $774) was recorded as finance cost.

On June 10, 2026, the Company and Compass North entered into a note termination agreement pursuant to which the promissory note was terminated and all amounts owing were deemed paid in full. The carrying amount of $19,078 at that date, comprising principal and accrued interest, was credited to additional paid-in capital as a capital contribution from the controlling shareholder. As of June 30, 2026, the balance of the promissory note was $nil (December 31, 2025 – $18,388). See note 9.