NOTE 21 – COMMITMENTS AND CONTINGENCIES

Other Commitments

The Company, through its SSI-India subsidiary, occupies office, manufacturing, and assembly space in Gurugram, Haryana (India) under a lease agreement entered into in March 2021, with monthly payments of $23,921 plus applicable taxes. This lease expires in March 2030. Effective June 01, 2023, SSI-India subsidiary signed another lease agreement for occupying an additional space in Gurugram, to further expand its manufacturing and assembly capacity. This lease provides for a monthly payment of $15,290 plus taxes and expires on May 31, 2032, subject to further renewal on mutually acceptable terms. Further effective from August 1, 2024 SSI-India subsidiary signed another lease agreement for occupying an additional space in Gurugram, to further expand its operations. This lease provides for a monthly payment of $8,500 plus taxes and expires on July 31, 2030. In May 2025, the Company signed another lease agreement for occupying an additional space for warehouse purposes in Gurugram which provides for monthly payment of $3,264 plus taxes and expires in March 2030. SSI-India leased a residential property to provide residential accommodation. This lease provides for a monthly payment of $20,673 plus taxes.

Contingencies

The Company’s Indian Subsidiary namely “Sudhir Srivastava Innovations Private Limited” has received the draft assessment order dated November 29, 2023 under section 144C(1) related to proposed transfer pricing adjustment of $521,329 to the returned income for the assessment year 2021-22, primarily on account of Rejection of the segmental margins computed by the Company and adoption of entity-level margins; and Modification of the filters applied by the Company in the selection of comparable companies.

Further, the Company had filed its objections before the Dispute Resolution Panel (DRP). The DRP, vide its directions dated August 28, 2024, granted partial relief of $16,413 on account of rectification in the operating margins of the comparable companies. Accordingly, the Transfer Pricing adjustment was reduced to $504,916. Subsequently, the Company has filed an appeal before the Income Tax Appellate Tribunal (ITAT) on the remaining disputed issues and the said case is pending for hearing before the ITAT. The Management believes that its position will more likely than not be sustained upon final examination by the tax authorities and accordingly has not accrued any liabilities with respect to this matter in its condensed consolidated financial statements.

Subsequently, the Company has filed an appeal before the Income Tax Appellate Tribunal (ITAT) on the remaining disputed issues. As informed by the Management, the matter is pending adjudication before the ITAT. The Company believes that its position will more likely than not be sustained upon final examination by the tax authorities and accordingly has not accrued any liabilities with respect to these matters in its condensed consolidated financial statements.