NOTE 9 – COMMITMENTS AND CONTINGENCIES

License Agreements

In 2022 and 2023, we entered into various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide. These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at the option of the Company during the fifth year (i.e., 2027 and 2028).

The aggregate future minimum payments due under these license agreements are as follows:

The Company recognized $226,539 and $146,634 of expense related to all license agreements for the three months ended June 30, 2026 and 2025, respectively. The Company recognized $435,039 and $279,970 of expense related to all license agreements for the six months ended June 30, 2026 and 2025, respectively.

Long-Term Payment Plan for Information Technology System and Services

The Company entered into a long-term payment plan agreement with Oracle for the payment of costs related to the implementation of the Company’s new ERP system (which went live in April 2025) and related cloud services. Under this agreement, the Company is obligated to make payments of $4,035 per month through July 2027. As of June 30, 2026, the Company’s remaining obligation under this arrangement was $52,459, of which $48,424 is included within Accounts payable and accrued expenses in the accompanying condensed balance sheet, and $4,035 is reflected within Non-Current Liabilities in the accompanying condensed balance sheet.

Leases

Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by a related party (see Note 8). We consider our current office space adequate for our current operations.

Other Commitments

See related party management services agreement discussed in Note 8.

Legal Matters

We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.

International Trade and Tariffs

Beginning in April 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These developments negatively impacted our results of operations during the year ended December 31, 2025. Management has taken various actions to mitigate the negative impacts of tariffs on our financial results; these actions have been largely successful thus far. However, the current international geopolitical climate related to tariffs is fluid and continues to evolve, and we cannot provide any assurance that actions that have been taken by management or that may be taken by management in the future will be successful in future periods. As such, we cannot predict with certainty the ultimate impacts that international trade and tariff developments may have on our business and financial results in the future, but those impacts could be material.

In February 2026, the U.S. Supreme Court issued a ruling invalidating some of the tariffs imposed by the U.S. government. The Company has submitted claims for refunds of certain tariffs previously paid by the Company totalling approximately $125,000, and the Company plans to file additional claims for refunds totalling approximately $136,000 in the future. However, significant uncertainty remains as to the timing and amount that will ultimately be received from such claims. Accordingly, no amounts related to such claims for potential refunds have been recognized in the Company’s condensed financial statements for the three and six months ended June 30, 2026.