NOTE 25 – RELATED PARTY TRANSACTIONS

All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors.

On August 12, 2022, the Company entered into an engagement letter with Adnant, LLC (“Adnant”) pursuant to which Adnant provides executive level consulting and related business support and services related to the Company’s present and future challenges and opportunities (the "Engagement"). As compensation for the Adnant’s continued services and on achieving identified performance objectives as described in the engagement letter, Adnant is entitled to receive fees of $0.15 million monthly subject to the Company having available a cash balance greater than or equal to $1.20 million following payment of the fee and a performance bonus award subject to achievement of the performance objectives as set forth in more detail in the engagement letter. Effective April 1, 2023, Adnant is entitled to receive monthly fees of $0.20 million as compensation for Adnant’s continued services through September 30, 2023. The Engagement, as amended on June 30, 2023 (the "A&R Engagement Letter"), provides Adnant with the option to convert accrued and unpaid service fees into shares of Common Stock of the Company. In addition to the monthly fee described above, a performance based award of $2.50 million shall be payable to Adnant in shares of Common Stock based upon the achievement of the performance bonus award objectives set forth in the A&R Engagement Letter and the continued performance of Adnant towards obtaining such performance bonus award objectives. A transaction bonus award of $1.25 million is also available to Adnant subject to a change of control event approved by the Board of Directors with a value equal to or greater than $40.00 million in the aggregate. On December 29, 2023, the Board approved an extension of Adnant's continued services on a month-to-month basis under the terms of the A&R Engagement Letter. During the year ended  December 31, 2023, the Company incurred engagement fees totaling $2.68 million and issued 961,783 shares of Common Stock under the performance bonus award valued at $1.91 million. During the year ended December 31, 2024, the Company incurred engagement fees totaling $2.51 million. As of December 31, 2024 and 2023, total amounts due to Adnant were $1.18 million and $4.35 million, respectively, and included in "Accounts Payable & Accrued Liabilities" on the consolidated balance sheet.

In January 2023, the Company entered into Securities Purchase Agreements with certain investors, including Sabas Carrillo, the Company’s Chief Executive Officer, Patty Chan, the Company’s Chief Financial Officer, James Miller, the Company's former Chief Operating Officer, and Robert Baca, the Company’s Chief Legal Officer. On December 30, 2024,  the Series V Preferred Stock and warrants issued in connection with the 2023 Private Placement were amended. Refer to "Note 15 - Stockholders' Deficit" for further information on the 2023 Private Placement.

On January 3, 2023, the Company entered into a sublease agreement with Adnant for use of the office building located in Downey, California as the Company's corporate headquarters. The lease term commenced on February 1, 2023 and expires on May 31, 2025, upon which the sublease shall automatically continue on a month-to-month basis thereafter. Total rent expense incurred with the related party was $0.13 million and $0.13 million for the years ended  December 31, 2024 and 2023, respectively. 

On December 31, 2024, the Company entered into a Debt Conversion Agreement wherein total amounts due to Adnant totaling $6.17 million was converted into 3,808,559 shares of Common Stock at a price per share of $1.62 as repayment of accounts payable and the performance bonus award. 

During the year ended  December 31, 2023, a member of the Company's Board forfeited 9,000 shares of the Company's Common Stock to the Company for no cash value. Refer to "Note 15 - Stockholders' Deficit" for further information.

During the year ended  December 31, 2023, the Company's CEO advanced the Company $0.20 million for working capital needs, which has been repaid as of December 31, 2023.