NOTE 10. Commitments and Contingencies

Legal Contingencies

On February 8, 2022, the Company was notified of a potential lawsuit related to the termination of our Advisory Panel Membership agreement with Taylor Black Wealth, Ltd. (“Taylor”). The Company engaged Taylor for assistance with capital raises and was to be partially compensated with stock options, subject to vesting. Taylor claims that the Company terminated the agreement unlawfully and therefore are still entitled to the remaining unvested options which the Company believes to be cancelled. The total number of stock options being contested is 137,473, which are still shown as issued and outstanding in Note 6 “Equity” above.

As disclosed under Note 4, the Employment Agreement between the Company and Dr. Adler was terminated following the Company’s discovery that SAPL and ACL breached material representations and warranties under the Share Exchange. Pursuant to a letter dated December 8, 2025, the Company intends to seek rescission of the Share Exchange and rescind the shares of Company common stock issued to ACL pursuant to the Share Exchange. The Company has also sent notice to Dr. Adler for the termination of the option to purchase common stock issued to Dr. Adler under the Employment Agreement and the termination of such agreement for “cause” as defined under the agreement. Among other material breaches, without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the closing of the Share Exchange and remain encumbered and subject to liens.

Florida Litigation

On January 15, 2026, the Company filed a lawsuit against SAPL and ACL in the United States District Court for the Southern District of Florida. The Company is seeking rescission of the Share Exchange and temporary injunctive relief to prevent SAPL and ACL from transferring the shares of common stock received pursuant to the Share Exchange and damages related thereto. SAPL and ACL have since filed a counterclaim and may bring additional claims.

At this time, the trial is scheduled for July 2027. The Company is unable to predict the outcome of the litigation or estimate the ultimate financial exposure, if any, that may result from the proceedings. An adverse judgment or settlement could have a material adverse effect on the financial condition and results of operations of the Company.

Nevada Litigation

On April 16, 2026, ACL filed a verified shareholder derivative action in the District Court of Clark County, Nevada against the Company’s directors, Charles Faulkner and Simon Wajcenberg, as well as the Company as a nominal defendant. The complaint alleges breaches of fiduciary duty, fraud, violations of the Nevada Securities Act, equity dilution, conversion, unjust enrichment, and civil conspiracy in connection with the Series D Preferred Stock issuance, executive compensation, and SEC filings. The relief sought includes compensatory and punitive damages, disgorgement, injunctive relief, appointment of a receiver, and a judicial declaration that the Series D Preferred Stock issuance was invalid. The Company and its directors moved to dismiss the case. On July 9, 2026, the court heard arguments and granted dismissal of the lawsuit. A formal order of dismissal was entered on August 10, 2026.