Rank One Computing Corp Commitments Disclosure
Note 7 – Commitments and Contingencies
Line of Credit
On March 15, 2023, the Company entered into a revolving demand note with a bank that provides for short-term borrowings as needed, subject to the bank’s discretion. The line of credit may be cancelled by either party at any time for any reason by written notice to the other, and is collateralized by the Company’s assets. On December 31, 2025, the agreement was amended to establish a maximum advance of $2,500,000. The amendment also introduced a 0.90% administration fee and a $20,000 closing fee related to the increased limit. The stated interest rate is adjustable, with interest equal to the Prime Rate plus two percent per annum. At December 31, 2025, the total interest rate was at 9.0%. The line of credit balance outstanding as of December 31, 2025, and December 31, 2024, was $1,839,891 and $431,132, respectively.
Litigation
In March, 2026, Eye Corp IT Solutions LLC filed a claim in the High Court of England and Wales (Case No. CL-2026-000062) that named Rank One Computing Corporation and certain other defendants; the Company does not believe it will result in a material adverse effect on its financial condition or results of operations.
The Company is currently not involved in any other litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the company, its common stock, any of the Company’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
From time to time, we may become involved in legal proceedings and claims that arise in the ordinary course of business.
The outcome of litigation is inherently uncertain. An unfavorable resolution of one or more proceedings could materially impact our future business, operating results, or financial condition. In addition, regardless of the outcome, litigation may result in significant costs, diversion of management attention, and other adverse effects.
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.