13. Commitments and Contingencies

License Agreement – On March 19, 2022, Impact BioMedical entered into a License Agreement (“Equivir License”) with a third-party (“Licensee”) where the Licensor is granted the right, amongst other things, to develop, commercialize, and sell the Company’s Equivir technology. In exchange, the Licensee shall pay the Company a royalty of 5.5% of net sales. Under the terms of the Equivir Agreement, the Company shall reimburse the Licensee for 50% of the development costs provided that the development costs shall not exceed $1,250,000. As of September 30, 2026 and December 31, 2025, a liability of $0 has been recorded in relation to the Equivir License.

Royalty Agreement - On August 15, 2018, the Impact BioMedical entered into Royalty Agreement with Chemia Corporation (“Chemia”) pursuant to which Chemia transferred to the Company all of its right to 3F (Functional Fragrance Formulation). This agreement has a 20-year term and is automatically renewed for a period of 1 year unless mutually agreed upon by both parties. 3F consists of 3F Mosquito Repellant and 3F Anti-Viral formulations. Based on the Royalty Agreement, the Company should cover all the costs to prepare and finalize necessary patent application and other intellectual property related to 3F. Chemia agreed to support the Company in efforts leading to development of 3F intellectual property and it is licensing. Based on Royalty Agreement any payments received from development, sales, licensing or transfer of 3F technology will be paid 50% to the Company and 50% to Chemia. On November 27, 2018, Company and Chemia signed an Addendum to Royalty Agreement (“Addendum”), according to which the Company granted Chemia a royalty-based limited license for purposes of making and selling fragrances embodying the 3F technology. Based on the Addendum, Chemia should pay the Company 5% of net sales in royalty. On November 8, 2019, both companies entered into Amendment no.1 to Royalty Agreement, based on which certain expenses borne by the Company towards patent application and licensing should be reimbursed to the Company before any royalty payments are made. For the nine months ended September 30, 2026 and 2025, there were no reimbursements or royalties paid to the Company and the Company cannot be assured that Chemia’s efforts will end up in any future sales of the technology.

Employment Agreements – Impact BioMedical has an employment agreement with it CEO Frank Heuszel in which Mr. Heuszel’s agreement contains a mandatory bonus clause of $150,000 for the first year of the employment term, beginning September 2024, $100,000 for the second year of the employment term, beginning September 2025, and $100,000 for the third year of the employment term, beginning September 2026. As of September 30, 2026, approximately $96,000 and $100,000 is accrued for year one and year two of Mr. Heuszel’s bonus, respectively. As of December 31, 2025, approximately $96,000 is accrued for year one of Mr. Heuszel’s bonus and $25,000 for the second year of Mr. Heuszel’s bonus.

Contingent Litigation Payments – The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing, enforcement and patent law. These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis. In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company’s actual collection of funds. The Company accrues contingent fees when it is probable that the milestones will be achieved, and the fees can be reasonably estimated. As of September 30, 2026 and December 31, 2025, the Company had not accrued any contingent legal fees pursuant to these arrangements.

On February 2, 2026, a putative securities class action lawsuit, Julianne Louie v. Picard Medical, Inc., et al., Case No. 3:26-cv-01024-RFL, was filed in the United States District Court for the Northern District of California in connection with the initial public offering of Picard Medical, Inc. Sentinel Brokers Company, Inc. (“Sentinel”), an indirectly majority-owned subsidiary of the Company, was named as an underwriter defendant. Plaintiffs filed an amended complaint on July 28, 2026. On October 13, 2026, Sentinel and the other underwriter defendants filed a motion to dismiss Count I of the amended complaint with prejudice. The motion remains pending. Based on currently available information, management does not believe an unfavorable outcome is probable. However, the ultimate outcome of the litigation remains uncertain, and the Company is unable to reasonably estimate a potential loss or range of loss at this time.

On April 13, 2026, a putative securities class action lawsuit, Leyber Gabriel Briones, et al. v. Syla Technologies Co., Ltd., et al., Index No. 154747/2026, was filed in the Supreme Court of the State of New York, County of New York, in connection with certain initial public offerings. Impact BioMedical Inc. (“Impact”), a majority-owned subsidiary of the Company, was named among numerous defendants. As of the date of this filing, Impact has not been formally served with process. Based on currently available information, management believes the allegations against Impact lack sufficient factual support and does not believe an unfavorable outcome is probable. However, the ultimate outcome of the litigation remains uncertain, and the Company is unable to reasonably estimate a potential loss or range of loss at this time.