NOTE 17 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were issued and has determined that no other subsequent events exist, except as noted below.

License Agreement and Equity Grants related to Leah Kateb

On July 1, 2025, the Company, through its wholly-owned subsidiary Skylar, entered into a License Agreement with BlueUTA-I, LLC (“BlueUTA”) and recording artist Leah Kateb. Pursuant to the agreement, Skylar was granted exclusive rights to use the artist’s likeness and trademarks in connection with the manufacture, marketing, and sale of certain consumer products.

In consideration of services to be provided under the License Agreement, the Company approved the issuance of (i) 2,000,000 options to BlueUTA to purchase shares of the Company’s Class A common stock under the Company’s 2023 Equity Incentive Plan, and (ii) 3,000 Class B Units (profits interests) of Skylar, subject to time- and performance-based vesting conditions, which, if fully realized would represent 30% of Skylar’s current outstanding membership interests. The Class B Units have participation rights in the event of a change of control of Skylar.

Gibraltar Loan – Amendment and Forbearance Agreement

The Company and its lender entered into an amendment and waiver to the Loan and Security Agreement, waiving (i) specified defaults therein, (ii) allowing additional permitted liens relating to the Company’s credit cards and credit card processing services as set forth therein, and (iii) adjusting certain financial and reporting covenants. Additionally, the Company and its lender entered into a forbearance agreement, effective July 18, 2025, with its lender related to its revolving loan facility (the “Forbearance Agreement”). The Forbearance Agreement acknowledges the existence of certain continuing events of default and provides that, subject to specified conditions, the lender will forbear from exercising remedies related to those defaults through September 16, 2025. The forbearance period may be extended to October 16, 2025 and November 15, 2025, respectively, if the Company meets minimum EBITDA thresholds of $300,000 for the periods ending July 31, 2025 and August 31, 2025. The Forbearance Agreement does not constitute a waiver of any defaults, and the lender reserves all rights and remedies under the loan documents.

Letter of Intent

On July 29, 2025, the Company announced the execution of a non-binding exclusive Letter of Intent to acquire its contract manufacturers, collectively referred to as The Starco Group. The Starco Group is a middle market private label and co-packing manufacturer operating three facilities across the US with a focus on personal care, household, food and beverage products. The proposed transaction aims to provide shareholders a business that will have greater scale on revenue and efficiencies on margin, through vertical integration for many of its brands. Under the proposed transaction, the Company would be renamed “STARCO” and create two main operating subsidiaries, Starco Brands and Starco Manufacturing. Each will operate as separate business units under the public STARCO umbrella which will continue to be led by Ross Sklar, the Chairman & CEO.

Amendment to Consolidated Secured Promissory Note

On August 13, 2025, in connection with certain conditions and obligations of the Forbearance Agreement, Ross Sklar was obligated by the lender to contributed two tranches of capital, each an amount of $500,000, for a total aggregate contribution of $1,000,000 (the “Capital Contributions”) to Company for related party financing subordinate to the Company’s senior indebtedness. In recognition of the Capital Contributions, the Company. Ross Sklar, and Gibraltar Business Capital, entered into Amendment Number Two to the Consolidated Promissory Note, which acknowledges increased the outstanding principal of $1,000,000 subject to the Consolidated Promissory Note.