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COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2026
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

Warrant Exercise Matter

 

As described in Note 6, during June 2026 the Company issued 3,741,407 shares of common stock upon exercises of Series A-4, A-5, and A-6 Warrants that occurred prior to the date the warrants became exercisable, and certain of those shares were issued without registration or a restrictive legend. The Company may have contractual recourse against the exercising holders. Remedies under evaluation include the return and cancellation of shares, or the repurchase of shares in the open market and their return to the Company for cancellation. The Company may also incur other costs in connection with the matter, including in respect of the previously described registration obligations. As of June 30, 2026, the Company is unable to estimate the amount or range of any reasonably possible loss with respect to this matter, and no liability has been recorded. The Company is evaluating the matter with counsel and will record an accrual or provide further disclosure as facts develop, in accordance with ASC 450.

 

Settlement Agreements

 

In January 2025, Aegis Capital Corp. filed suit against the Company in the U.S. District Court for the Southern District of New York (Case No. 1:25-cv-00080-PKC) asserting breach of a 2024 placement agent agreement. On May 14, 2026, the parties entered into a settlement agreement under which the Company agreed to pay $300,000 — $100,000 initially and five monthly installments of $40,000 through October 2026 — in exchange for mutual releases and dismissal with prejudice, with no admission of liability. The Company recorded a $300,000 charge during the six months ended June 30, 2026. As of June 30, 2026, $160,000 remained payable and was included in accrued expenses.

 

In April 2026, the Company settled counterclaims in a Florida contract action (Laser Photonics, LLC v. Photon Technologies, LLC) for $68,333. The settlement was paid in full and recognized in operating expenses during the six months ended June 30, 2026, and the related action was dismissed with prejudice.