NOTE 15. RELATED PARTY TRANSACTIONS

The Company was spun off from Former Parent on September 13, 2024. Prior to the Spin-Off, the Company did not operate as a stand-alone entity. Following the Spin-Off, the Company and the Former Parent operate as separate, publicly traded companies, though they remain related parties due to common ownership history and ongoing agreements.

Allocation of General Corporate Expenses

HCMC provided human resources, accounting, payroll processing, legal and other managerial services to the Company prior to the Spin-Off. Following the Spin-Off, HCWC and HCMC entered into a TSA, under which both companies agreed to provide certain transitional services to one another to ensure smooth separation. These services were provided on a transitional basis and were expected to continue for a period of up to one year following the Spin-Off.

Management adopted a proportional cost allocation method to allocate HCMC expenses to the Company. The allocation method calculated the appropriate share of overhead costs to the Company based on management’s estimate that the sum of management time and resources spent managing the Company was approximately equal to the amount of time and resources spent managing HCMC and its subsidiaries. As a result, 50% of HCMC overhead on a weighted average basis was allocated to the Company based on the fact that management spent an equal amount of time managing HCMC and the Company. The Company believed the allocation methodology used was reasonable and had been consistently applied, and resulted in an appropriate allocation of costs incurred. However, these allocations were not necessarily indicative of the cost had the Company been a stand-alone entity or of future services.

Settlement of Related Party Receivable

On December 31, 2025, the Company entered into a Stock Purchase and Satisfaction of Debt Agreement with HCMC, pursuant to which the Company settled an outstanding $4.0 million intercompany receivable by accepting 43,889,786,222 shares of HCMC common stock. Upon settlement, the related party receivable was derecognized and the Company recorded an investment in HCMC accounted for under the equity method (see Note 11 - Investment In Other Entity-Related Party). As of December 31, 2025, the due from related party balance was $0.

Subsequent Activity – Due from Related Party

As of June 30, 2026, the Company had a due from related party balance of approximately $0.2 million, representing temporary advances to HCMC for transition purposes under the Transition Services Agreement. On August 10, 2026, in connection with the termination of the TSA effective January 1, 2026, this balance will be settled in the normal course of business.

Agreements with HCMC

The Company entered into several agreements with the Former Parent that, among other things, effect the separation and govern the relationship of the parties following the Spin-Off. These agreements include:

Under the terms of the Transition Services Agreement, HCMC provided to the Company, on a transitional basis, certain services or functions, including information technology, accounting, human resources, and payroll functions. On August 10, 2026, the TSA was terminated with an effective date of January 1, 2026. Consideration and costs for the transition services were determined using several billing methodologies as described in the agreements, including customary billing and pass-through billing. Costs for transition services provided by the former parent are recorded within the Condensed Consolidated Statements of Operations based on the nature of the services.

Termination of Transition Services Agreement

On August 10, 2026, the Company and HCMC entered into a Termination Agreement, which formally terminated the TSA effective as of January 1, 2026. The Termination Agreement provides for a mutual release of any liability or obligation under the TSA from and after the effective date. As a result, no further services will be provided by HCMC to the Company under the TSA, and all outstanding balances thereunder will be settled in the normal course of business.