NOTE 9 – COMMITMENTS AND CONTINGENCIES

The Company acquires assets still in development and enters R&D arrangements with third parties that often require milestone and royalty payments to the third-party contingent upon the occurrence of certain future events linked to the success of the asset in development. Milestone payments may be required, contingent upon the successful achievement of an important point in the development lifecycle of the pharmaceutical product (e.g., approval of the product for marketing by a regulatory agency). If required by the license agreements, the Company may have to make royalty payments based upon a percentage of the sales of the pharmaceutical products if regulatory approval for marketing is obtained. For the years ended April 30, 2025 and 2024, the company expensed $438,416 and $407,431, respectively, in research and development expenses within the accompanying consolidated statements of operations. There have been no recognized costs related to royalty payments.

There are future royalty payments as follows:

Office Lease

In January 2023, the Company entered into a month-to-month agreement of the Las Vegas office space, commencing on May 1, 2023. Additionally, the Company rents storage space pursuant to a month-to-month agreement in Laguna Hills, California.

Rent expenses for these offices for the years ended April 30, 2025 and 2024 were $28,335 and $29,546, respectively.

With the month-to-month office rental agreements there are no aggregate future minimum lease payments required to be made.

Service Agreements

The Company has entered into several service agreements with independent and related parties pursuant to which services will be provided over a specified period-of-time related to the IND which the FDA has placed on clinical hold. The services include regulatory affairs strategy, advice and follow-up work on the IND and services related to having the clinical hold lifted. The total remaining cost is estimated to be approximately $591,000, of which the related party (SG Austria and its subsidiaries) portion will be approximately $157,000. These amounts take into account some of the cost associated with the work and preclinical studies required to lift the clinical hold.

Settlement of Legal Complaint Agreement

From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. While the outcome of potential claims cannot be predicted with certainty, the Company does not believe that the outcome of any potential claims will have a material adverse effect on our financial condition or operating results.

On May 16, 2025, the Company entered into a settlement and release agreement (“Settlement Agreement”) with H.C. Wainwright & Co., LLC relating to a complaint filed on December 4, 2023, alleging a breach of contract. The Settlement Agreement resolved fully all differences, disputes or claims without admitting any liability, fault or wrongdoing on the part of all parties. The Settlement Agreement required the Company to pay $1.55 million, comprised of an initial payment of $1.25 million and twelve equal payments of $25,000 beginning on the one-month anniversary of the initial payment. On May 16, 2025, the Company also issued warrants “(First Warrant Issuance”) to purchase 343,183 shares of the Company’s common stock with an exercise price of $4.00 per share with a term of five years from the issuance date. The Company has the option to pay $226,254 or issue additional warrants (“Additional Warrants”) to purchase 313,067 shares of the Company’s common stock with an exercise price of $4.00 per share with a term of five years prior to the issuance date of this Annual Report on Form 10-K. The Company elected to issue the additional warrants with an effective date of July 29, 2025.

The Company estimated the fair value of the First Warrant Issuance and the Additional Warrant Issuance as of April 30, 2025 pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 Fair Value Measurement (“ASC 820”). The Company concluded the fair value of the First Warrant Issuance to be $245,000 and the Additional Warrant Issuance to be $224,000. The Company utilized the Black-Scholes-Merton Model to calculate the value of the Warrants issued subsequent to the year ended April 30, 2025. The fair value of the Warrants were estimated as of April 30, 2025, using the fair value of our common stock of $1.24 and was based on the following weighted average assumptions: dividend yield 0%; expected term of 5.0 years; equity volatility of 98%; and a risk-free interest rate of 3.7%.The Company recorded a legal settlement expense of $2,019,000, consisting of $1.55 million payment and the fair value of the two warrant issues totaling $469,000. The Company recorded the $2,019,000 liability as of April 30, 2025 and is included in accrued expenses, see Note 5 – Accrued Expenses.

To the Company’s knowledge there are no legal proceedings pending to which any property of the Company is subject.