NOTE 16. COMMITMENTS AND CONTINGENCIES

Joint Development and License Agreement

On April 27, 2026, the Company entered into a Joint Development and License Agreement (the “JDA”) with Kopin Corporation, to collaborate on the development and commercialization of Kopin’s interface for GPU-to-GPU connectivity. Under the JDA, the Company has committed to pay Kopin up to $15,000,000 for the development of the Project Technology through achievement of a successful prototype demonstration (a “Successful Demo”), payable in installments under a time-based funding schedule. The Company has also agreed to maintain at least $5,000,000 of funds in a segregated account to cover development plan needs.

During the six months ended June 30, 2026, the Company made a nonrefundable advance payment of $5,000,000 to Kopin for future research and development services under the JDA. The advance has been capitalized and is included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheets, and is recognized as research and development expense as Kopin performs the related development services. As of June 30, 2026, the unamortized balance of the advance was $4,372,070. For the three and six months ended June 30, 2026, the Company recognized $669,892 in research and development expense related to the JDA.

In consideration for Kopin’s grant of the license to the project technology, the Company issued to Kopin shares of the Company’s Series J Convertible Preferred Stock. The Series J Convertible Preferred Stock is recorded in temporary equity (mezzanine equity), including a related anti-dilution liability, and is described further in Note 8. Stockholders’ Equity.

Following achievement of a Successful Demo, the parties have agreed to negotiate in good faith for one year toward a production plan for deployment of the project technology, which could require additional payments by the Company of approximately $15,000,000 to $25,000,000. This obligation is contingent on achievement of a Successful Demo and is not currently committed.

Supply Agreement

Concurrently with the JDA, the Company entered into a Commercial Supply Agreement (the “Supply Agreement”) with Kopin under which Kopin appointed the Company as the exclusive seller of any products incorporating the project technology to end users worldwide (subject to certain exceptions). The Company is required to purchase its entire requirements for such products from Kopin, subject to certain exceptions, for an initial term of four years with automatic one-year renewal periods unless either party provides notice of non-renewal.

The Company does not believe it is probable that a liability has been incurred in connection with the JDA or Supply Agreement as of June 30, 2026, and no amounts have been accrued. Should the Company fail to fulfill its funding or other obligations under the JDA or Supply Agreement, it could be required to assign its rights in the project technology to Kopin or have other obligations accelerate, which could be material.