NOTE 11. CONTRACTS AND AGREEMENTS

Director Compensation

During the six months ended June 30, 2026, director agreements for non-employee members of our Board consisted of an annual cash fee of $20,000 ($5,000 per quarter) and issuance of 13,334 shares per annum of Common Stock (3,334 shares per quarter).

During the six months ended June 30, 2025, our previous director agreements for non-employee members of our Board consisted of an annual cash fee of $48,000 ($12,000 per quarter), with the exception of the audit committee chairperson, whose annual cash fee was $54,600 ($13,650 per quarter). Non-employee Director compensation also included an annual issuance of 6,667 shares of Common Stock.

Agreement for the Purchase and Sale of Future Receipts

Effective November 18, 2025, we entered into an agreement with Agile Capital Funding, LLC (“Agile”) pursuant to which we sold to Agile 15% of the proceeds of each future sale made by us (the “Future Receipts”) until Agile received an aggregate of $447,300 (the “Purchased Amount”). As consideration for the Purchased Amount, Agile paid us a purchase price of $315,000, less an origination fee of $15,000, for net proceeds of $300,000. Although the agreement was structured as a sale of future receipts, we determined that the arrangement has the economic characteristics of a borrowing and have accordingly accounted for it as debt under ASC 470-10-25.

The $132,300 excess of the Purchased Amount over the gross proceeds received was recorded as a debt discount presented as a direct reduction of the carrying value of the liability on the Consolidated Balance Sheet and was amortized as interest expense over the expected repayment period on a pro rata basis of monthly receipts. Weekly payments of $15,975, commencing December 3, 2025, were debited from our bank account and reconciled monthly against 15% of actual Future Receipts for the period.

The agreement was secured by a security interest in all of our present and future accounts receivable, evidenced by a UCC-1 financing statement, supported by a corporate guaranty of performance. The agreement contained a covenant prohibiting us from entering into any additional financing arrangements relating to our future receipts or accepting any cash advance from any other funding source while any balance remains outstanding. The agreement provided for prepayment in whole at our option at specified payoff amounts, with credit applied for payments already made.

As of June 30, 2026, the gross remaining balance under the agreement was $0, compared to $367,425 as of December 31, 2025, reflecting full repayment during the current period. During the six months ended June 30, 2026, we recognized $113,191 of interest expense related to this arrangement, which is included in our Consolidated Statements of Operations.