12. COMMITMENTS AND CONTINGENCIES

On April 13, 2026 a complaint was filed against the Company in the Superior Court of California, County of San Diego. The Plaintiff, who has acquired rights to $398,740 of claims against the Company, is seeking damages in that amount along with attorneys’ fees and costs. On May 14, 2026 the Company and the Plaintiff entered into a Settlement and Mutual Release Agreement (“Agreement”). Pursuant to the terms and conditions of the Agreement following the entry of an Order by the Court after a fairness hearing pursuant to Section 3(a) (10) of the Securities Act of 1933 (the “Securities Act”), and Section 25142 of the California Corporations Code (the “Corporations Code”) and the delivery by the Plaintiff and the Company of the Stipulation of Dismissal in settlement of the Claims, the Company shall issue and deliver to the Plaintiff shares of its Common Stock or Series A Preferred Stock (the “Settlement Shares”) in one or more tranches as necessary, and subject to adjustment and ownership limitations as set forth in the Agreement, sufficient to generate proceeds such that the aggregate Remittance Amount equals the Claim Amount. The Remittance Amount shall mean sixty five percent (65%) of Net Proceeds of the sale of Settlement Shares. On July 10, 2026, after a Fairness Hearing, the Superior Court of California issued an order approving issuance of the Settlement Shares pursuant to Section 3(a) (10) of the Act and Section 25142 of the Corporations Code.