BONK, INC. Commitments Disclosure

Note 15 - Commitments and Contingencies

 

The Company entered into an office lease Effective July 1, 2021, which was terminated on August 11, 2025. The primary term of the lease was five years with one renewal option for an additional three years. Minimum annual lease payments for the primary term and one renewal are as follows:

 Schedule of Minimum Annual Lease Payments

Primary Period		Amount				Amount During Renewal Period		Amount
July 1 to June 30, 2022		$	180,456			July 1 to June 30, 2027		$	240,662
July 1 to June 30, 2023		$	201,260			July 1 to June 30, 2028		$	247,882
July 1 to June 30, 2024		$	224,330			July 1 to June 30, 2029		$	255,319
July 1 to June 30, 2025		$	229,312
July 1 to June 30, 2026		$	233,653

 

Under ASC 842, the Company recorded a Right of Use Asset (“ROU”) and an offsetting lease liability of $870,406 representing the present value of the future payments under the lease calculated using an 8% discount rate (the current borrowing rate of the company). The ROU and lease liability are amortized over the five-year life of the lease.

 

The unamortized balances as of December 31, 2025 were ROU asset of $18,570 and a current portion of the lease liability of $23,544. At December 31, 2024, the unamortized balances were ROU asset of $299,722, the current portion of the lease liability was $212,964 and non-current portion of the lease liability was $114,148.

 

On August 12, 2025, the Company terminated its corporate office for a lease termination fee of $126,878 resulting in a loss of $107,162.

 

The Company recognized rent expense of $200,255 and $267,735 for the lease during the twelve months ended December 31, 2025 and 2024, respectively.

 

Legal Proceedings

 

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

 

 

On September 5, 2023, “Sabby” Volatility Warrant Master Fund Ltd. filed a lawsuit against the Company in the federal district court for the Southern District of New York case captioned Sabby Volatility Warrant Master Fund Ltd. v. Jupiter Wellness, Inc., No.1:23-cv-07874-KPF (the “Litigation”). Sabby’s initial complaint in the Litigation alleges that the Company’s delayed spin-off and distribution of the common stock of “SRM” Entertainment. Inc. give rise to claims of breach-of-contact, promissory estoppel, and negligent misrepresentation. On November 10, 2023, Jupiter sought judicial permission to move to dismiss Sabby’s complaint, arguing that Sabby had no legal right to the delayed distribution occurring on the original record date, and that regardless, no law requires the Company to compensate Sabby for the costs of covering its short position against the Company. The Litigation was dismissed with prejudice by the federal district court for the Southern District of New York on September 23, 2024. On October 10, 2024, Sabby filed an appeal of the Southern District’s dismissal to the United States Court of Appeals for the Second Circuit. In or around March of 2025, Sabby was successful in its appeal to the Second Circuit and the lower court’s ruling was overturned as to Sabby’s breach of contract claim – Sabby’s remaining claims were dismissed. On or about July 1, 2025, the Second Circuit denied the Company’s petition for reconsideration. The Company intends to vigorously defend itself against Sabby’s claims and does not believe that the Litigation’s ultimate disposition or resolution will have a material adverse effect on the Company’s financial position, results of operations or liquidity.

 

On February 9, 2024, “Sabby” Volatility Warrant Master Find Ltd. sued the Company in the federal district court for the Southern District of New York, case captioned, Sabby Volatility Warrant Master Fund Ltd. v. Safety Shot, Inc., No. 1:24-cv-920-NRB (the “Litigation”). Sabby’s initial complaint alleges that the Company has improperly refused to honor Sabby’s exercise of a Warrant to acquire 2,105,263 shares of common stock. On March 8, 2024, Sabby filed an amended complaint. The Company answered the amended complaint. Sabby seeks “liquidated and compensatory damages in an amount to be proven at trial,” including compensatory damages “estimated to be at least $750,000,” liquidated damages “estimated to be at least $600,000,” specific performance, attorneys’ fees, expenses and costs. The Company does not believe that the Litigation’s ultimate disposition or resolution will have a material adverse effect on the Company’s financial position, results of operations or liquidity. The Company has made an offer of $1.5 million to settle this matter.

 

On January 16, 2025, Carla Olson, on behalf of herself and a putative class of similarly situated individuals, filed a Class and Representative Action against Yerbaé, LLC, in the Superior Court of the State of California for the County of San Diego, alleging, among other things, violations of various provisions of the California Labor Code, the Industrial Welfare Commissions Wage Order No. 4 and the Private Attorneys General Act (the “Litigation”). The Plaintiff alleges, among other things, that Yerbaé willfully misclassified brand ambassadors as independent contractors rather than employees and seeks to recover, among other things, unpaid wages, meal and rest break premiums, expense reimbursements and statutory penalties. The parties have agreed to participate in a mediation on December 15, 2025. The Company does not believe that the Litigation’s ultimate disposition or resolution will have a material adverse effect on the Company’s financial position, results of operations or liquidity.

 

On September 3, 2025, the Company has reached a settlement with Brian John, the former CEO of Jupiter Wellness, whereby Mr. John had an alleged claim for certain shares of SRM (TRON) stock (the “Settlement”). As part of the settlement, the Company agreed to give Mr. John 100,000 shares of its TRON stock. In turn, Mr. John has agreed to register 500,000 shares of the Company’s Caring Brand shares. The Settlement contains customary mutual releases of all potential claims that the parties may have against each other and covenants not to sue.

 

On or about July 29, 2025, the Company settled a dispute with Iroquois Master Fund, Ltd. and Iroquois Capital Investment Group (collectively “Iroquois”) whereby the Company agreed to pay Iroquois $2.5 million in exchange for a full release of all claims by Iroquois. (the “Dispute”). The Dispute stemmed from Iroquois alleged ownership and attempt to do a cashless exercise of certain Company stock warrants.

 

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.