Terms and Conditions

Last Updated and Effective Date: May 25, 2026

These Master Terms and Conditions (the "Terms" or "Agreement") govern your access to and use of the Software-as-a-Service (SaaS) platforms, Web interfaces (including www.candoo.ai and www.formic.ai), Application Programming Interfaces (APIs), and associated proprietary systems operated by Formic AI Ltd.

By executing an Order Form that references these Terms, registering an account, integrating the Boreal API, or otherwise accessing or utilizing the Services, you (the "Customer" or "User") agree to be bound by these Terms. If you are entering into this Agreement on behalf of a company, law firm, government entity, or other legal entity, you represent that you have the authority to bind such entity to these Terms.

Formic AI Ltd. and Customer are individually referred to herein as a "Party" and collectively as the "Parties."

1. DEFINITIONS

"Active User" means an authorized user account registered under Customer's corporate subscription that actively interfaces with the Services within a given monthly billing cycle.
"API" means the Application Programming Interface and associated software development kits (SDKs) and documentation made available by Formic.
"Boreal Architecture" means Formic's proprietary Boreal neuro-symbolic artificial intelligence architecture.
"Customer Data" means all proprietary structured and unstructured data, structured database records, text queries, search parameters, and metadata that Customer uploads, ingests, or processes through the Services.
"Decoupled Cognitive Architecture" means the technical framework developed by Formic wherein natural language generation is decoupled from deterministic semantic retrieval to verify factual accuracy.
"Enabled User" means an authorized individual seat purchased or allocated under a program order form or subscription tier (e.g., as defined in any active Enterprise or Pilot Agreement), authorized to log in and access the platform instance regardless of active usage status.
"Model Output" means the AI response generated by the Services in direct response to the Customer's queries.
"Services" means CanDoo, CanDooPDF, the Formic Engine, the API, and any associated custom cloud-SaaS instances or local "Formic OnSite" (air-gapped) implementations provided by Formic.

2. LICENSING TIERS, ACCESS, AND PROVISIONING

2.1 License Grant

Subject to Customer’s continuous compliance with these Terms and the payment of all applicable fees, Formic hereby grants Customer a non-exclusive, non-transferable, non-sublicensable, revocable, limited-term license during the applicable subscription or pilot term to:

Access and use the cloud-hosted SaaS environments of the Services
Integrate and make programmatic API calls strictly in accordance with the official developer documentation.
Allow its designated Enabled Users or Active Users to access the Services solely for the Customer’s internal business or professional research operations.

2.2 Authorized Deployment Modes

Cloud-SaaS Deployment: The default deployment is a multi-tenant cloud application hosted by Formic across geographically separate server environments.
Formic OnSite (Air-Gapped Deployment): Where explicitly contracted, Formic will deliver a self-contained, offline-compatible containerized installation of the Services to run on Customer-managed infrastructure. Customer's rights under an OnSite deployment are limited strictly to running the compiled container image without accessing, modifying, or exporting the underlying neural weights, model parameters, or source code.

2.3 Account Security & Administration

Customer is solely responsible for maintaining the strict confidentiality of all user credentials, access tokens, and API keys. Customer accepts full liability for all activities, API requests, data ingestion, and fees incurred under its administrative account. Customer must immediately notify Formic at general@formic.ai of any suspected unauthorized access or credential leak.

3. INTELLECTUAL PROPERTY AND PROPRIETARY PROTECTION

3.1 Ownership of the Platform & Architecture

As between the Parties, Formic AI Ltd. retains and reserves all right, title, and interest, including all patent, copyright, trademark, trade secret, and other intellectual property rights, in and to:

The Services;
The Boreal Architecture, any associated models, and all underlying model weights, structures, and configuration files;
All algorithmic systems, computational pathfinding operations, and natural language response mechanisms;
The proprietary Matcher and Compiler, all associated functionality, and all tokenization tree parameters and sentence-level provenance systems.

3.2 Ownership of Customer Data & Model Outputs

Customer Data: Customer retains sole ownership, copyright, and control of all Customer Data uploaded or ingested into the platform. Customer hereby grants Formic a limited, non-exclusive, royalty-free, worldwide license to host, process, and parse Customer Data solely to the extent required to deliver the Services to Customer.
Model Outputs: As between the Parties, Customer owns all rights, title, and copyright in the synthesized text and compiled reports that comprise the Model Outputs. For clarity, while the specific synthesized textual sequence belongs to the Customer, the underlying system software, computational graphs, and indexing logic used to construct such outputs remain the exclusive intellectual property of Formic.

3.3 Strict Proprietary Restrictions & Moat Protection

Customer shall not, and shall not authorize or permit any third party, Enabled User, or Active User to:

Reverse-engineer, decompile, decrypt, disassemble, or extract the source code, neural network architecture, model weights, or symbolic logic of any portion of the Services or Boreal Architecture;
Map, probe, reconstruct, or replicate the Boreal Architecture or any component thereof;
Circumvent, bypass, or disable any security, licensing, cryptographic isolation, or usage-limiting controls embedded within the Services;
Remove, alter, or obscure any patent, trademark, copyright, or confidentiality notices displayed within the Services or on generated outputs.

3.4 Strict Prohibitions: AI Model Training

Prohibited Use Case: Customer is strictly and absolutely prohibited from utilizing the Services or the Boreal Architecture, Customer Data processed through the Services, or any generated Model Outputs (in whole or in part) to train, fine-tune, re-align, benchmark, distill, validate, or develop any foundational, probabilistic, statistical, symbolic, or generative Large Language Model (LLM), AI System, or Knowledge Graph Technology that competes directly or indirectly with the business or proprietary systems of Formic AI Ltd.

4. API INTEGRATION AND B2B PASS-THROUGH COVENANTS

4.1 Downstream EULA Mandate

Where Customer is integrating the API or the Services into an external commercial software product or third-party-facing portal (an "Integration Partner"), Customer must implement and enforce an End User License Agreement (EULA) with each of its end users. Such an EULA must contain:

Intellectual property protection terms that are no less restrictive than those set forth in Section 3 of this Agreement.
An explicit disclaimer stating that Formic AI Ltd. is a third-party technology provider and holds no direct liability, warranty obligations, or support covenants to the end-user.
A binding prohibition on reverse-engineering, model training, and diagnostic benchmarking.

4.2 Vicarious Liability for Integrations

Integration Partner agrees to accept full, unconditional, and vicarious liability to Formic for any breach of intellectual property rights, proprietary restrictions, or data misuse committed by its downstream end-users or clients. Integration Partner shall immediately suspend access for any end-user suspected of violating these terms and cooperate fully with Formic to remediate the violation.

5. FEES, BILLING, AND AUDIT RIGHTS

5.1 Fee Structure

Customer shall pay Formic the fees specified in the applicable program order form, pilot agreement, or subscription dashboard. Fees may be calculated on an Enabled User basis (fixed seat pricing), an Active User basis (utility pricing metered monthly), or on an API fee licensing or revenue share model.

5.2 Payment Terms

All payments are processed securely through QuickBooks and/or Stripe. Formic does not store credit card or raw banking data, retaining only an encrypted QuickBooks and/or Stripe customer identifier linked to the Customer’s administrative dashboard. Unless otherwise specified in an Order Form, all fees are billed in advance on a monthly or annual cycle, are non-refundable, and must be paid in either Canadian Dollars (CAD) or United States Dollars (USD) as specified during checkout or on the Order Form.

5.3 Non-Payment and Suspension

If any payment is overdue by more than fifteen (15) days, Formic reserves the right, without limiting its other legal remedies, to immediately suspend Customer’s access to the Services, API connection endpoints, and indexing databases until all outstanding balances are settled.

5.4 Licensing Audit

Formic reserves the right to electronically audit licensing compliance, including monitoring the total number of Active and Enabled Users in the Customer's tenant workspace. For "Formic OnSite" deployments, Formic may require the Customer to provide a certified system log once per calendar quarter to verify that actual software utilization matches authorized licensing parameters.

6. REPRESENTATIONS, WARRANTIES, AND DISCLAIMERS

6.1 Mutual Representations

Each Party represents and warrants that it has the full legal capacity, corporate power, and authority to enter into and perform its obligations under this Agreement.

6.2 Service Performance Warranty

Formic warrants that during the term of an active subscription, the SaaS Services will perform substantially in accordance with the official, published product specifications under normal operational use. Customer's sole and exclusive remedy for any verified breach of this performance warranty is for Formic to use commercially reasonable efforts to repair or modify the software.

6.3 Technical & AI-Specific Disclaimers

As-Is Baseline: Except as expressly provided in Section 6.2, the Services, the Boreal Architecture, and all generated Model Outputs are provided on an "As-Is" and "As-Available" basis. Formic expressly disclaims all warranties, express, implied, statutory, or otherwise, including warranties of merchantability, fitness for a particular purpose, title, and non-infringement.
The Decoupled Cognition Disclaimer: Customer acknowledges that while Formic's Boreal Architecture utilizes a data structure directly linking factual data to source material, natural language generation relies on integrated Large Language Models. The structural extraction of knowledge is an extremely high-accuracy process, but syntactic fluency and composition are probabilistic. Consequently, Formic only guarantees that Model Ouptuts will be 100% correct and error-free on substantive facts. Formic does not guarantee that Model Outputs will be 100% correct, error-free, or free of unusual syntactic fluency and composition.
Human-in-the-Loop Mandate: Model Outputs are designed solely to accelerate workflows, not to replace human effort and judgment. They do not constitute formal legal advice, regulatory counsel, professional diagnostic findings, or similar regulated work product. Customer agrees that every Model Output must undergo direct human-in-the-loop review by a licensed professional where applicable.

7. LIMITATION OF LIABILITY

7.1 Exclusion of Consequential and Indirect Damages

In no event shall either Party, or their directors, officers, employees, agents, or affiliates, be liable under any contract, negligence, strict liability, or other legal or equitable theory for any indirect, special, incidental, exemplary, punitive, cover, or consequential damages (including, but not limited to, loss of profits, loss of revenue, loss of business, business interruption, loss of reputational standing, or loss, corruption, or compromise of proprietary business data) arising out of or in connection with the Services or these terms, even if advised of the possibility of such damages in advance.

7.2 General Direct Damages Liability Cap

Except for the Critical Exceptions set out in Section 7.3 and the Security Super-Cap set out in Section 7.4, the maximum aggregate liability of Formic AI Ltd. for all claims, losses, costs, jury awards, attorney fees, and damages of any kind arising under or related to this agreement, whether in contract, tort (including negligence), or otherwise, shall not exceed the actual monetary fees paid by Customer to Formic in the twelve (12) months immediately preceding the event giving rise to the applicable claim.

7.3 Uncapped Liability Carve-Outs

The limitations and exclusions of liability set forth in Sections 7.1 and 7.2 shall not apply to:

A Party's breach of its confidentiality obligations under any active Mutual Non-Disclosure Agreement (MNDA) executed between the Parties.
Customer's violation of the Proprietary Restrictions, IP protections, or AI Model Training Prohibitions set forth in Section 3 of this Agreement.
A Party's fraud, willful misconduct, gross negligence, or intentional violation of applicable Canadian or international law.

7.4 Security and Privacy Super-Cap

For any verified, direct damages caused by a data security breach, unauthorized third-party infrastructure access, or catastrophic database leakage originating solely from Formic’s gross negligence or direct failure to maintain standard logical tenant boundaries as outlined in the Privacy Policy, Formic's maximum aggregate liability shall be subject to an elevated "Super-Cap" of $2,000,000 CAD (Two Million Canadian Dollars). This Super-Cap replaces and supersedes the general 12-month liability cap set forth in Section 7.2, but remains subject to the exclusion of consequential damages set forth in Section 7.1.

8. INDEMNIFICATION

8.1 Customer Indemnity

Except where explicitly prohibited by law, Customer shall defend, indemnify, and hold harmless Formic AI Ltd. and its directors, officers, agents, employees, subsidiaries, and affiliates from and against any third-party actions, claims, losses, damages, liabilities, and expenses (including reasonable legal fees and court costs) arising out of:

Customer's unauthorized use of the Services or API;
Customer's direct violation of these Terms;
The deployment or reliance upon Model Outputs in professional environments without human-in-the-loop validation, where such deployment directly causes economic or legal harm to a third party.

8.2 Formic Intellectual Property Indemnity

Formic shall defend, indemnify, and hold Customer harmless from and against any third-party claims or lawsuits alleging that the core Boreal Architecture or Services directly infringes a valid patent or copyright. If a claim of infringement is made or, in Formic's reasonable opinion, is likely to be made, Formic may, at its sole option:

Procure the right for the Customer to continue using the Services;
Replace or modify the infringing components to make them non-infringing while maintaining substantial specifications;
If options (1) and (2) are not commercially viable, terminate the Agreement and refund any prepaid, unused fees.

9. TERM, TERMINATION, AND RETENTION

9.1 Term and Auto-Renewal

Unless otherwise specified in an active Order Form, subscription agreements shall commence on the date of account registration and continue on a monthly or annual auto-renewing basis. Either Party may terminate the subscription upon thirty (30) days' written notice to the other Party.

9.2 Termination for Cause

Either Party may terminate this Agreement immediately for cause if:

The other Party commits a material breach of this Agreement and fails to cure such breach within fifteen (15) days of receiving formal written notice; or,
The other Party becomes insolvent, enters bankruptcy, liquidation, or assigns its assets for the benefit of creditors.

9.3 Data Retention and Certificate of Deletion

Upon formal termination of the Customer’s subscription:

30-Day Retention Buffer: Formic will securely retain the Customer's database indices, file uploads, and project graphs for a strict safety window of thirty (30) days from the effective date of termination. During this period, Customer may request a standard export of its original Customer Data.
Permanent Deletion: Upon the expiration of the 30-day buffer, Formic shall permanently destroy, overwrite, and delete all Customer Data and associated search index maps across its production and backup systems.
Certificate of Deletion: For enterprise tiers, Customer's corporate officers may submit a formal request to Formic’s Privacy Officer at general@formic.ai for a binding, written Certificate of Deletion certifying that all Customer data has been permanently and securely destroyed.

10. GENERAL LEGAL PROVISIONS

10.1 Governing Law and Forum

This Agreement, and all disputes arising out of or related to it, shall be governed exclusively by the laws of the Province of Ontario and the federal laws of Canada applicable therein, without giving effect to any conflict of law principles. The Parties explicitly submit to the exclusive personal jurisdiction of the provincial and federal courts located in the City of Toronto, Ontario, for the adjudication of any judicial proceedings.

10.2 Severability

If any provision of these Terms is found by a court of competent jurisdiction to be inconsistent, invalid, or unenforceable under applicable laws, such provision shall be deemed modified to the minimum extent necessary to make it valid and enforceable, or severed if modification is impossible. The remaining provisions of this Agreement shall remain in full force and effect.

10.3 Entire Agreement

This Agreement, together with any executed Order Forms or active Program Agreements, constitutes the entire, integrated agreement between the Parties regarding Customer's use of the Services and supersedes all prior or contemporaneous discussions, MNDAs, pilot drafts, oral agreements, and marketing materials.

10.4 Notices and Communications

All formal legal notices under this Agreement must be sent in writing to:

Formic: Formic AI Ltd., Attn: Legal Department, 475 Lauder Avenue, York, ON, M6E 3J3, Canada (with a copy via email to daniel@formic.ai).
Customer: To the primary email address or physical mailing address designated during account registration or within the applicable Order Form.