NOTE 5 – SOFTWARE LICENSING OBLIGATION

In October 2023, the Company entered into a software licensing agreement with Oracle America, Inc. (“Oracle”) for its NetSuite Enterprise Resource Planning (ERP) software (“NetSuite”). The Company agreed to license NetSuite for 36 months and utilize Oracle’s professional services to assist in the implementation of NetSuite. The cost of the license fee was $102,000 and professional services were fixed at $34,000, for an aggregate cost of $136,000. Per the payment terms, no payments were due during the first six months, and thirty monthly payments of $4,513 are due from April 1, 2024 through September 1, 2026.

The Company initially recorded the $136,000 cost as a deferred software licensing asset and liability on the accompanying condensed balance sheets. The deferred software licensing asset is being amortized over the license period. The deferred software licensing balance was $25,000 at December 31, 2025. During the three and six months ended June 30, 2026, the Company recorded amortization expense of $8,000 and $17,000, respectively, resulting in a deferred software licensing balance of $8,000 as of June 30, 2026.

During the six months ended June 30, 2026, the Company made payments of $23,000, leaving a software license obligation balance of $14,000 as of June 30, 2026, all of which was due within one year and classified as a current liability. Accordingly, there was no long-term software license obligation outstanding as of June 30, 2026.