NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company has certain financial commitments relating to research and development contracts as of September 30, 2026, as follows:

Legal Proceedings

On April 7, 2026, Craft Capital Management LLC (“Craft”) filed a claim against the Company in FINRA arbitration, alleging, among other things, that the Company breached the right of first refusal provision of an engagement letter dated March 16, 2026 (the “Engagement Letter”). The claim arises from the Company’s termination of the Engagement Letter on March 27, 2026, and the subsequent closing of a private placement offering on March 30, 2026, for gross proceeds of $10,997. Craft is seeking a success fee of $880, common stock warrants valued at $880, monthly late fees, reasonable attorneys’ fees, interest, and other relief. On July 7, 2026, the Company filed counterclaims against Craft alleging fraudulent inducement, breach of contract, and violations of regulatory rules, and seeking declaratory relief. The arbitration proceedings are ongoing.

The Company accounts for loss contingencies in accordance with ASC 450, Contingencies, and recognizes a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has meritorious defenses to Craft’s claims and intends to vigorously defend the matter. Based on management’s assessment of the claims, the Company’s defenses and counterclaims, and the current status of the arbitration proceedings, management has concluded that a loss is reasonably possible but not probable. The Company is unable to reasonably estimate the amount or range of potential loss at this time. Accordingly, no liability has been recorded as of September 30, 2026. The outcome of the arbitration is inherently uncertain, and an unfavorable outcome could have a material adverse effect on the Company’s financial position, results of operations, and cash flows.