Note 17 – Commitments and contingencies

Contingencies

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Except as disclosed below, the Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. 

Second Confidential Settlement Agreement

The Company and FT Global Capital Inc. (“FTGC”) previously entered into the Confidential Settlement Agreement dated September 22, 2025 (the “Prior Settlement Agreement”), as amended by the Amendment to Confidential Settlement Agreement dated October 31, 2025 (the “Prior Amendment,” and together with the Prior Settlement Agreement, the “Prior Settlement Documents”), which resolved and settled all claims between the Parties, except only (i) the disputes relating to the Company’s financing that occurred on or about October 9, 2025 (the “October Financing”) and (ii) the tail provisions of the Engagement Agreement, consisting of Section 1(C) together with the portions of Sections 1(A) and 1(B) incorporated therein solely for purposes of calculating compensation (the “Tail Provisions”)

On October 13, 2025, FTGC filed a Complaint against the Company in the Supreme Court of the State of New York (FT Global Capital, Inc. v. Zeta Network Group, formerly known as Color Star Technology Co., Ltd., Index No. 659090/2025) (the “2025 Action”). On January 23, 2026 (“Effective Date”), the parties entered into a settlement agreement (“Second Confidential Settlement Agreement”), pursuant to which both parties agreed to modify the Tail Provisions, (ii) resolve any and all disputes between them including disputes relating to the October Financing and the 2025 Action. The settlement payment is $900,000, of which $400,000 shall be paid within three business days after the reception of the fully executed agreement (“First Payment”) and $500,000 shall be paid within sixty days from the Effective Date (“Second Payment”). The Company recognized a loss of $900,000 in the caption of “finance expense” in the accompanying statements of operations in accordance with ASC 450-20.

Pursuant to Second Confidential Settlement Agreement, the parties also agreed that, from the Effective Date through and including September 7, 2026, FTGC shall be entitled to only a cash fee equal to 3.5% of the amount of the gross cash proceeds actually received by the Company at the closing(s) of any tail financing from investors introduced by FTGC. On March 12, 2026, the Company completed SPA 12 (see Note 13) and received approximately $5.4 million gross proceeds. In connection with the financing, FTGC charged the Company a tail fee of $189,000, or 3.5% of the gross cash proceeds received by the Company (“Tail Fee Compensation”). The Company recognized the Tail Fee Compensation as a loss within “finance expense” in the accompanying statements of operations in accordance with ASC 450-20.

As of June 30, 2026, the settlement payment in connection with the October Financing, First Payment, Second Payment, and Tail Fee Compensation have been fully settled.