What changed in this filing

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Item 1. Legal Proceedings

2026-08-12 compared with 2026-05-13 · 35 added, 26 removed, 16 unchanged (79% of the section changed)

5 unchanged sentences

Except as set forth below, we

are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial

are currently not aware of any such legal proceeding or claims that we believe will have a material adverse effect on our business, financial

condition or operating results.

5 unchanged sentences

Thompson alleges that he entered into an employment agreement

and addendum thereto with us.

He alleges that we failed to provide him with restricted preferred stock and separation compensation

allegedly owed to him under those agreements, and he alleges that we have improperly continued to defer payment of accrued salary and

other compensation he claims to be owed.

The complaint asserts claims for breach of contract, breach of the implied covenant of good faith

and fair dealing, and unjust enrichment.

Thompson alleges damages in an unspecified amount in excess of $15,000 under each of

those claims.

Thompson also seeks declaratory relief regarding compensation that he claims to be owed and regarding the validity

of a conversion agreement between him and our company.

and addendum thereto with us, and that we failed to provide him with restricted preferred stock and separation compensation allegedly

owed to him under those agreements, and he alleges that we have improperly continued to defer payment of accrued salary and other compensation

he claims to be owed.

The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing,

and unjust enrichment.

Thompson alleges damages in an unspecified amount in excess of $15,000 under each of those claims.

Thompson also seeks declaratory relief regarding compensation that he claims to be owed and regarding the validity of a conversion agreement

between him and our company.

Pursuant to the conversion agreement, Mr.

Thompson agreed to cancel

$2,352,994 in deferred compensation owed to him in exchange for receiving 588,249 shares of common stock from us.

Thompson contends

in the complaint that he revoked the conversion agreement or that it is otherwise unenforceable and, in the alternative, seeks its reformation

to provide that it was contingent on the successful uplisting of our stock to the Nasdaq Stock Market.

The complaint also asserts a claim

for accounting, seeking inspection of our books, records, and accounts.

The complaint also seeks an award of attorneys’ fees

We intends to vigorously defend against Mr.

Thompson’s claims.

Although we believe we have meritorious defenses to those

claims, we are unable to reasonably estimate the potential loss or range of loss, if any, that may result from this matter because the

case is in its preliminary stages and the outcome of litigation is inherently uncertain.

It is possible that an adverse outcome could

have a material adverse effect on our business, financial condition, results of operations, cash flows, and prospects.

Thompson agreed to cancel $2,352,994 in deferred compensation

owed to him in exchange for receiving 588,249 shares of common stock from us.

Thompson contends in the complaint that he revoked

the conversion agreement or that it is otherwise unenforceable and, in the alternative, seeks its reformation to provide that it was contingent

on the successful uplisting of our stock to the Nasdaq Stock Market.

The complaint also asserts a claim for accounting, seeking inspection

of our books, records, and accounts.

The complaint also seeks an award of attorneys’ fees and costs.

On May 21, 2026, we filed a motion to dismiss

Thompson’s complaint, arguing, among other things, that the employment agreement contains a prelitigation mediation requirement

Thompson did not satisfy before filing suit.

Thompson opposed the motion and filed a countermotion for partial summary judgment,

contending that he is entitled to separation package compensation totaling $1,350,000 under the addendum to the employment agreement.

On July 17, 2026, the court entered an order that granted our motion to dismiss without prejudice, dismissed the countermotion without

prejudice, and dismissed the case without prejudice so that the parties may submit to mediation for 60 days before commencing any claims

for breach of the employment agreement.

In that order, the court found that the addendum to the employment agreement did not remove the

prelitigation mediation requirement but, rather, expressly preserved it.

Thompson re-file a lawsuit asserting

the same claims he asserted in the dismissed lawsuit, we intend to vigorously defend against those claims.

Although we believe we would

have meritorious defenses to such claims, we are unable to reasonably estimate the potential loss or range of loss, if any, that may result

from the litigation of such claims because the outcome of litigation is inherently uncertain.

It is possible that an adverse outcome in

such litigation, if it were to be commenced, could have a material adverse effect on our business, financial condition, results of operations,

cash flows, and prospects.

RISK FACTORS.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings