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SUBSEQUENT EVENTS
 3 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 24 – SUBSEQUENT EVENTS

 

Contract Modification and Removal of Minimum Royalty Guarantee

 

On January 6, 2025, the Company and Saagar Govil signed an agreement to revise the purchase price structure and payment terms.

 

 

The Agreement’s Purchase Price provisions was amended to reflect that the Purchase Price will solely consist of the royalties based on the actual revenues generated in the three years following closing. The provision requiring the total sum of royalties to reach a minimum of $820,000, with any shortfall to be paid by Purchaser, was removed from the Agreement due to a downward net working capital adjustment related to the transaction.

 

Additionally, it was agreed that the payment terms due under the royalties shall be as follows commencing on January 1, 2025:

 

●First Year (Jan 2025) Monthly Payment: $10,000
●Second Year (Jan 2026) Monthly Payment: $20,000
●Balloon Payment at the end of the Second Year (12/31/26): Total outstanding royalties

 

This transaction was approved by the Board of Directors with Saagar Govil abstaining from the vote.

 

As of December 31, 2024, management had been engaged in negotiations with Mr. Govil regarding the amendment to the contract, as both parties sought to modify the agreement as stated above. Based on the status of negotiations at year-end and the high likelihood that the modification would be finalized, management determined that it was appropriate to remove the previously recognized royalty receivable of $280,545 from the financial statements as of December 31, 2024.

 

This adjustment reflects additional information about conditions that existed at the balance sheet date and was accounted for as a recognized subsequent event in accordance with ASC 855, Subsequent Events.