NOTE 6 - COMMITMENTS, CONTINGENCIES AND LEGAL MATTERS

As at June 30, 2026, the Company has outstanding borrowings under various loan agreements with multiple lenders, most of which are in default. Certain borrowings are secured by the Company’s assets, including equipment and receivables. In the event of default, lenders may have the right to seize collateralized assets.

Steven Barber

As part of the Company’s acquisition of Alternative Medical Solutions Inc. (“AMS”) in 2018, the Company is working with legal counsel to determine whether it has claims against Steven Barber arising from his alleged default under the consulting agreement entered into in connection with the AMS acquisition (the “Consulting Agreement”). In January 2020, the Company received correspondence from counsel for Mr. Barber demanding payment of amounts purportedly due under the Consulting Agreement. The Company has reviewed whether Mr. Barber performed under the terms of the Consulting Agreement and has identified concerns.

No decision on whether to proceed on either of these situations has been reached as at the date of this Report, but the Company does not believe that these situations present a probability of material risk. As at June 30, 2026, the Company has an outstanding payable of $549,780 included in accounts payable and accrued liabilities (December 31, 2025 - $549,780).

Deloitte LLP

On July 18, 2024, Deloitte LLP (“Deloitte”) filed a civil claim in the Alberta Court of Justice alleging a breach of contract. Deloitte was engaged by the Company to assist with fiscal year 2022 finance backfill and diagnostic services and, in accordance with a signed engagement letter dated August 29, 2022, performed those professional services. Deloitte alleges that it fulfilled its responsibilities and delivered its invoices to the Company. The Company acknowledged the satisfactory completion of the services and the amounts billed, but made no further payment as agreed other than an installment payment on April 18, 2024. Deloitte is seeking recovery of the amount owed. As at June 30, 2026, the amount payable for services from Deloitte included in accounts payable and accrued liabilities was $33,305 (December 31, 2025 - $34,530).

Former Executives

Former executives John Cassels and Andrew Steedman (collectively, the “plaintiffs”) have filed a lawsuit against the Company alleging wrongful termination, related misconduct, and unpaid compensation. The plaintiffs seek $3 million in compensatory damages and an additional $3 million in punitive damages. During the six months ended June 30, 2026, the Company participated in a deposition related to the lawsuit, which did not result in any material change in the status of the case. As at June 30, 2026, the Company maintains an accrual of approximately $916,000 for unpaid salaries owed to the plaintiffs for services rendered from April 2019 through June 2023. No additional loss contingency has been recorded because the lawsuit remains in its early stages and the ultimate outcome is uncertain. The Company actively monitors this matter and will update its assessment as additional information becomes available.

Astor Street LLC

The Company issued two promissory notes to Astor Street LLC in January 2021 and granted Astor Street LLC a security interest in all of the Company’s present and after-acquired assets. Astor Street LLC commenced a claim to recover amounts owing of CAD $312,303 in April 2022 and obtained a default judgment of CAD $314,273 in March 2023. On September 30, 2025, Astor Street LLC took steps to seize assets belonging to the Company. The Company is assessing the validity of the claim and default judgment and whether a negotiated resolution is necessary. As at June 30, 2026, amounts payable on the promissory notes to Astor Street LLC included in notes payable were $211,119 (CAD $300,000) (December 31, 2025 - $218,882 (CAD $300,000)).