What changed in this filing

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Item 4. Controls and Procedures

2026-02-12 compared with 2025-11-13 · 25 added, 27 removed, 42 unchanged (55% of the section changed)

3 unchanged sentences

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In connection with the preparation of this Form 10-Q for the three and six months ended September 30, 2025, an evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in and pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on this evaluation, our CEO and CFO have concluded that, as of September 30, 2025, due to the material weaknesses in our internal control over financial reporting described below, our financial reporting controls and procedures were not effective.

results from operations and cash flows for the quarter ended September 30, 2025, and our financial condition as of each such date and have been prepared in conformity with GAAP.

In connection with the preparation of this Form 10-Q for the three and nine months ended December 31, 2025, an evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in and pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on this evaluation, our CEO and CFO have concluded

that, as of December 31, 2025, due to the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective.

Notwithstanding the identified material weakness, management believes the consolidated financial statements included in this Form 10-Q fairly present, in all material respects, our consolidated financial position and consolidated results from operations and cash flows for the quarter ended December 31, 2025, and our financial condition as of each such date and have been prepared in conformity with GAAP.

Management’s Report on Internal Control Over Financial Reporting

17 unchanged sentences

There is no assurance that additional remediation steps will not be necessary.

There were no changes in our internal control over financial reporting during the most recent fiscal quarter that were identified in connection with management’s evaluation required by paragraph (d) of Rules 13d-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitations of the Effectiveness of Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met.

Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

Except as described above with respect to the remediation of the identified material weakness, there were no changes in our internal control over financial reporting during the most recent fiscal quarter that were identified in connection with management’s evaluation required by paragraph (d) of Rules 13d-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATIO N

9 unchanged sentences

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There is substantial doubt about the Company's ability to continue as a going concern, and this may adversely affect the Company's stock price and the Company's ability to raise capital.

In connection with the preparation of these Condensed Consolidated Financial Statements for the three and six months ended September 30, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they become due over the next twelve months from the date of the issuance of the financial statements.

As of September 30, 2025, the Company had cash of $7.7 million and a working capital deficit of $14.2 million.

The Company had net income of $0.8 million and $0.1 million during the three and six months ended September 30, 2025, respectively.

The Exit New Money Notes (as defined in Note 8 – Debt) will mature on December 7, 2025 (see Note 8 – Debt in the Notes to Condensed Consolidated Financial Statements for further discussion).

The Company does not expect to have sufficient internally generated cash, nor does the Company expect that it could obtain sufficient financing through underwritten public offerings, at-the market offerings or other similar methods, to satisfy the obligations of the Exit New Money Notes.

If the Company is unable to repay the obligations of the Exit New Money Notes on the maturity date, it will be in default under the Exit Note Purchase Agreement (as defined in Note 8 – Debt), which may result in, among other things, default interest or an acceleration of all obligations.

It is not certain whether the Company will have, or will be able to obtain, sufficient funds to make any such accelerated payments.

If any outstanding indebtedness under the Exit Note Purchase Agreement is accelerated, the Company’s assets may not be sufficient to repay such indebtedness.

The Company and its advisors are considering various alternatives to address the upcoming maturity of the Exit New Money Notes, which may include issuances of equity or the incurrence of additional indebtedness;

however there can be no assurance that the Company will be successful in refinancing the Exit New Money Notes.

Given the Company’s current cash position, lack of liquidity, short term debt maturity, limits to accessing capital and debt funding options, and current economic and market risks, there exists substantial doubt regarding the Company’s ability to continue as a going concern and its ability to meet its financial obligations as they become due over the next twelve months from the date of issuance of the financial statements as of, and for the period ended September 30, 2025.

The substantial doubt about the Company's ability to continue as a going concern may affect the price of the Company's common stock and the grade of its credit rating, may negatively impact relationships with third parties with whom the Company does business, including customers, vendors and lenders, may impact the Company's ability to raise additional capital or implement its business plan.

There is substantial doubt about our ability to continue as a going concern, and this may adversely affect our stock price and ability to raise capital.

In connection with the preparation of these Condensed Consolidated Financial Statements for the three and nine months ended December 31, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about our ability to meet our obligations as they become due over the next twelve months from the date of the issuance of the financial statements.

As of December 31, 2025, we had cash of $15.2 million and a working capital deficit of $22.9 million.

We had net income of $1.2 million and $1.3 million during the three and nine months ended December 31, 2025, respectively.

The outstanding Exit Roll Up Notes (as defined in Note 8 – Debt) will mature on December 7, 2026 (see Note 8 – Debt in the Notes to Condensed Consolidated Financial Statements for further discussion).

We do not expect to have sufficient internally generated cash, nor do we expect that we could obtain sufficient financing through underwritten public offerings, at-the market offerings or other similar methods, to satisfy the obligations of the Exit Roll Up Notes.

If we are unable to repay the obligations of the Exit Roll Up Notes on the maturity date, we will be in default under the Exit Note Purchase Agreement (as defined in Note 8 – Debt), which may result in, among other things, default interest or an acceleration of all obligations.

It is not certain whether we will have, or will be able to obtain, sufficient funds to make any such accelerated payments.

If any outstanding indebtedness under the Exit Note Purchase Agreement is accelerated, our assets may not be sufficient to repay such indebtedness.

We and our advisors are considering various alternatives to address the upcoming maturity of the Exit Notes, which may include issuances of equity or the incurrence of additional indebtedness;

however there can be no assurance that we will be successful in refinancing the Exit Roll Up Notes.

Given our current cash position, lack of liquidity, short term debt maturity, limits to accessing capital and debt funding options, and current economic and market risks, there exists substantial doubt regarding our ability to continue as a going concern and our ability to meet our financial obligations as they become due over the next twelve months from the date of issuance of the financial statements as of, and for the period ended December 31, 2025.

The substantial doubt about our ability to continue as a going concern may adversely affect the price of our common stock and the grade of our credit rating, may negatively impact relationships with third parties with whom we do business, including customers, vendors and lenders, may impact our ability to raise additional capital or implement its business plan.

The Exit Note Purchase Agreement, as amended, defines an event of default as, among other things, payment default, bankruptcy events, cross defaults, breaches of covenants and representations and warranties, changes of control and judgment defaults.

An event of default, if not waived, could have a material adverse effect on the Company.

In the event the Company fails to meet its obligations to repay the Exit New Money Notes, the collateral agent under the Exit Note Purchase Agreement, may enforce any and all liens and security interests on the collateral the Company has used to secure the Notes and the Company may forfeit its right to such collateral.

An event of default, if not waived, could have a material adverse effect on our business and financial condition.

In the event we fail to meet our obligations to repay the Exit Roll Up Notes, the collateral agent under the Exit Note Purchase Agreement, may enforce any and all liens and security interests on the collateral we used to secure the Notes and we may be required to forfeit our right to such collateral.

There are uncertainties and risks related to the profitability, safety and regulatory environment of AI that could adversely affect our business and operations.

In order to position ourselves to take advantage of growth opportunities, we have made, and may continue to make, investments, strategic acquisitions, mergers, partnership, joint ventures and alliances related to AI-infrastructure and data centers that involve significant risks and uncertainties.

The Company has only recently begun to pursue initiatives in AI related technologies and has not made any sales to AI infrastructure clients.

Some of the Company’s competitors, including competitors that have significantly greater resources, have already successfully generated revenues from AI business lines.

In order to position ourselves to take advantage of growth opportunities, we have made, and may continue to make, investments, strategic acquisitions, mergers, partnerships, joint ventures and alliances related to AI-infrastructure and data centers that involve significant risks and uncertainties.

We only recently began to pursue initiatives in AI related technologies and have not made any sales to AI infrastructure clients.

Some of our competitors, including competitors that have significantly greater resources, have already successfully generated revenues from AI business lines.

AI technologies and their uses are currently evolving rapidly.

If the Company fails to successfully integrate its products in AI infrastructure or develop new products in response to changes in technology or industry standards, or the Company fails to bring product enhancements or new product developments to market quickly enough, the Company’s products could rapidly become less competitive or obsolete for use in the development of AI infrastructure.

If we fail to successfully integrate our products in AI infrastructure or develop new products in response to changes in technology or industry standards or fail to bring product enhancements or new product developments to market quickly enough, our products could rapidly become less competitive or obsolete for use in the development of AI infrastructure.

Thus, the future profitability of any AI-related investments is highly uncertain and such investments may adversely affect our business and operations.

3 unchanged sentences

The amount of energy used for AI has also received significant attention, and it is expected that energy efficiency and sustainability will be critical factors regulating AI data centers.

Any future regulation of AI systems and related activities, including energy efficiency, could adversely affect our business and operations.

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 4. Controls and Procedures