NOTE 10 — RELATED PARTY TRANSACTIONS

In connection with the acquisition, Anthony De Luna, the founder and Chief Executive Officer of Flipside AI and, effective April 1, 2026, the Company’s Chief Technology Officer and a member of its board of directors, delivered an Advance Payable Note in favor of the Company in the principal amount of $840,000. The note formalizes personal advances made to him by Flipside AI before the acquisition and was acquired by the Company as an asset in the business combination; the Company has not arranged, extended, maintained or renewed any personal loan to him. The note is non-interest-bearing and is payable in eight quarterly installments of $105,000 due on the first day of each fiscal quarter commencing April 1, 2026, with any remaining balance due at maturity on March 31, 2028. At the issuer’s option each installment may be settled in cash or by the release of shares of the Company’s common stock held in escrow, with the number of shares determined using the greater of the trailing ten-day volume weighted average price or $0.75 per share. If an installment is not received within five business days of its due date, settlement is made automatically from the escrowed shares.

The 1,120,000 shares held in escrow correspond exactly to eight installments at the $0.75 floor, so the amount ultimately recoverable is limited to the value of those shares. The note was recorded at its acquisition-date fair value of $354,996. The installment due April 1, 2026 was not settled in cash and no shares had been released from the escrow account as of June 30, 2026. No interest income was recognized and the carrying value was $354,996 at June 30, 2026. Of that amount, $221,873 is presented in current assets, representing the five installments due on or before June 30, 2027, and $133,123 is presented as non-current. Due from related party consists entirely of this note.

The acquisition-date fair value was determined by weighting two settlement outcomes. Under cash settlement the installments were discounted at a market rate for an unsecured personal obligation. Under share settlement the amount recoverable is limited to the value of the escrowed shares, valued by reference to the share price and the contractual floor. A 20% probability was assigned to cash settlement, supported by an assessment of the obligor’s identifiable resources over the term of the note, and 80% to settlement in shares.

Arcadia was the selling shareholder in the acquisition, holds the seller convertible note described in Note 8, is the lender under the $200,000 loan to TaskAlpha, and received 5,726,000 shares of common stock at closing with a further 1,120,000 shares held in escrow.

Anthony De Luna is the founder and Chief Executive Officer of Flipside AI and, effective April 1, 2026, a director and the Chief Technology Officer of the Company. Under his employment agreement he receives an annual base salary of $175,000, an annual incentive bonus equal to 3% of the Company’s net after-tax income, and a commission equal to 3% of revenues generated by Flipside AI from customers he introduced. Included in the employment contract were terms that provided for a grant of 500,000 performance stock units that vest based on specified market capitalization milestones. Based on the original terms, a grant date has not been established for certain tranches of these units because the market capitalization-based vesting conditions do not sufficiently define the measurement methodology or period necessary to determine whether the applicable thresholds have been achieved. Accordingly, the Company concluded that a mutual understanding of the key terms and conditions of those tranches has not been established and, therefore, no grant-date fair value has been determined under ASC 718. The Company accrued $13,155 in respect of the commission arrangement for the three months ended June 30, 2026.

Deferred wages payable of $145,500 at December 31, 2025 represented compensation deferred by two officers of the Company. An additional $102,000 was accrued during the six months ended June 30, 2026, of which $43,500 was paid in cash in June 2026. The remaining $204,000 was settled on June 30, 2026 through the issuance of shares of common stock to those officers, as described in Note 11. No gain or loss was recognized on the settlement and deferred wages payable was nil at June 30, 2026.

Interest expense on related party balances was $5,589 on the Arcadia loan and $8,543 of accretion on the seller convertible note for the three months ended June 30, 2026.

Flipside AI has borrowings from individuals and related parties, including certain of the shareholders who sold the business to the Company. These borrowings are described in Note 8.