What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 245 added, 52 removed, 284 unchanged (51% of the section changed)

3 unchanged sentences

(Dollars in thousands, except par value)

March 31, 2025

June 30, 2025

December 31, 2024

1 unchanged sentence

Cash and cash equivalents

Restricted cash

Receivables, net of allowance of $ 267 and $ 405

11 unchanged sentences

Accrued liabilities

Short-term note payable

Deferred product revenue

15 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of goods sold

Gross profit (loss)

Operating expenses:

4 unchanged sentences

Operating loss

Interest income (expense)

Interest (expense)

Other income, net

Loss before income taxes

Provision (benefit) for income taxes

Provision for income taxes

Basic weighted average shares outstanding

10 unchanged sentences

(Dollars in thousands, except per share amounts)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization expense

3 unchanged sentences

Change of inventory to net realizable value

Non-cash interest expense

Gain on sale of capitalized assets

7 unchanged sentences

Operating lease liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

6 unchanged sentences

Cash flows from financing activities:

Proceeds from sale of stock

Proceeds from issuance of convertible note

Net proceeds from equity-based compensation programs

Proceeds from sale of shares

Net cash provided by financing activities

Dividend Payment

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

7 unchanged sentences

The following is a summary of supplemental cash flow activities:

Three months ended March 31,

Six months ended June 30,

Cash paid for income taxes

9 unchanged sentences

Going Concern:

As of March 31, 2025, our cash and cash equivalents were approximately $ 961 compared to $ 1,417 as of December 31, 2024.

Our working capital was $ 13,537 as of March 31, 2025.

Net cash used in operating activities was $ 1,439 for the three months ended March 31, 2025, a decrease of $ 1,796 compared to $ 433 of cash provided by operating activities for the three months ended March 31, 2024.

The decrease in cash is mainly due to a decrease in cash collected from receivables.

These and other conditions raise substantial doubt about continuing as a going concern.

We will need to complete one or more strategic transactions or raise additional working capital to continue our normal and planned operations.

As of June 30, 2025 , our cash and cash equivalents were approximately $ 2.8 million compared to $ 1.4 million as of December 31, 2024.

Our working capital was $ 9.4 million as of June 30, 2025 .

Net cash used in operating activities was ($ 2.6 ) million for the six months ended June 30, 2025 , compared to ($ 2.7 ) million of cash used in operating activities for the six months ended June 30, 2024 .

The consistency in the usage of cash is primarily due to a decrease in sales and ongoing operational challenges.

These and other conditions raise substantial doubt about our ability to continue

as a going concern.

We will need to complete one or more strategic transactions , including the pursuit of an Asset Sale

(defined as the sale of all or substantially all of our current assets and

operations), generate additional revenue through inventory sales,

or raise additional working capital to continue our normal and planned operations.

We will need to generate and sustain significant revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.

2 unchanged sentences

Our efforts to grow our business may be costlier than we expect, and we may not be able to generate sufficient revenue to offset our increased operating expenses.

We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays and other unknown events.

Accordingly, substantial doubt exists about our ability to continue as a going concern and we cannot assure you that we will achieve sustainable operating profits as we continue to expand our business and otherwise implement our growth initiatives.

In February 2025, the Company raised $ 1,000 in a private placement transaction.

We may be unable to complete a strategic transaction within a reasonable timeframe, on attractive terms or at all, and market conditions, including the historical volatility in our common stock will likely limit our ability to raise capital on favorable terms, or at all, and the terms of any public or private offerings of debt or equity securities likely would be significantly dilutive to existing stockholders.

We may incur significant losses in the future for several reasons, including unforeseen expenses, difficulties, complications and delays and other unknown events.

Accordingly, substantial doubt exists about our ability to continue as a going concern and we cannot assure you that we will achieve sustainable operating profits as we continue to operate our business and otherwise implement our growth initiatives.

In February 2025, the Company raised $ 1.0 million in a private placement transaction.

On June 20, 2025, the Company entered into a Note Purchase Agreement with First Finance Ltd., pursuant to which First Finance Ltd.

purchased $ 3.0 million aggregate principal amount of convertible notes, providing restricted proceeds intended for working capital, potential warrant repurchases, and operational needs as we pursue the Asset Sale.

In connection with this financing, we are required to use reasonable best efforts to complete the Asset Sale within 180 days of issuing Class A Redeemable Preferred Stock as a dividend to common stockholders (which occurred July 18, 2025 - see Note13), with net proceeds from any Asset Sale to be distributed pro rata to holders of such preferred stock.

Additionally, on June 20, 2025, we implemented a reduction in force affecting a significant portion of our workforce to scale operations and reduce expenses in alignment with the Asset Sale pursuit, which may result in short-term severance and related costs estimated at approximately $ 1.9 million and are expected to be incurred primarily in the third quarter of 2025.

On June 24, 2025, we regained compliance with Nasdaq's minimum bid price requirement following our 1-for-15 reverse stock split .

We may be unable to complete the Asset Sale or other strategic transactions within a reasonable timeframe, on attractive terms or at all, and market conditions, including the historical volatility in our common stock, will likely limit our ability to raise capital on favorable terms, or at all, and the terms of any public or private offerings of debt or equity securities likely would be significantly dilutive to existing stockholders.

There is no set timetable for the overall process given the anticipated timelines for different strategic alternatives may vary, and there can be no assurance that this process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms or at all.

The Company’s ability to continue as a going concern is dependent on the outcome of these uncertainties.

The Company’s ability to continue as a going concern is dependent on the outcome of these uncertainties, including successful inventory sales, additional investments, or the completion of long-term asset sales.

As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date these consolidated financial statements are issued.

The consolidated financial statements as of March 31, 2025 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months after these financial statements are issued, and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

The consolidated financial statements as of June 30, 2025 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months after these financial statements are issued, and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

3 unchanged sentences

All significant inter-company accounts and transactions have been eliminated.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

These accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and are not audited.

Certain information and footnote disclosures that are usually included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been either condensed or omitted in accordance with SEC rules and regulations.

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of March 31, 2025 and December 31, 2024 , the results of operations for the three months ended March 31, 2025 and 2024 , and the cash flows for the three months ended March 31, 2025 and 2024 .

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for a full-year period.

The accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of June 30, 2025 and December 31, 2024 , the results of operations for the three and six months ended June 30, 2025 and 2024 , and the cash flows for the six months ended June 30, 2025 and 2024 .

The results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results for a full-year period.

These interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Reverse Stock Split:

The Company completed a 1-for-15 reverse stock

split of the Company's issued and outstanding common stock, par value $ 0.001

per share, effective at 5:00 p.m.

Eastern Time on June 9, 2025.

common stock began trading on a split-adjusted basis on the Nasdaq Capital

Market on June 10, 2025, under the symbol "CLRO" and a new CUSIP number

of 18506U203.

The reverse stock split was primarily intended to increase the

per share market price of the common stock in order to regain compliance with

the minimum bid price requirement for continued listing on the Nasdaq Capital

As a result of the reverse stock split, every 15 shares of issued and

outstanding common stock were automatically combined into one share, with no

fractional shares issued (any fractional interests were rounded up to the next

whole share).

The reverse stock split did not change the par value of the

common stock or the authorized number of shares but reduced the number of

issued and outstanding shares from approximately 26.0 million to approximately

1.7 million, with proportional adjustments to outstanding stock options,

warrants, and shares reserved under equity incentive plans.

For additional details,

refer to the Company's Current Report on Form 8-K filed with the SEC on June 2,

2025, including the press release attached as Exhibit 99.1 thereto.

All share and per-share amounts in these

condensed consolidated financial statements and related notes have been

retroactively adjusted to reflect the reverse stock split for all periods

Restricted Cash

The Company includes restricted cash with cash

and cash equivalents when reconciling the beginning-of-period and end-of-period

total amounts shown on the statement of cash flows, in accordance with ASU

Restricted cash as of June 30, 2025, consists of $ 1,678 in remaining

proceeds from a $ 3,000 convertible note issued to First Finance Ltd.

20, 2025 (with no restricted cash balance as of March 31, 2025).

are subject to enforceable contractual restrictions per the disbursement schedule

in Schedule 8.5 of the Note Purchase Agreement, which allocates proceeds to

specific uses such as advisory fees, warrant holder payments, legal and audit

expenses, staff costs (e.g., board fees, accounting staff, operations/sales

staff bonuses), shutdown costs for foreign subsidiaries, and severance/PTO for

employee layoffs.

The funds are held in a segregated account and released only

upon meeting specified milestones, with penalties for non-compliance.

the quarter ended June 30, 2025, $ 1,322 was disbursed for severances, deal

fees, legal fees, and compliance fees, resulting in the ending restricted cash

Full disbursement of the remaining restricted cash is expected by

November 2025 as additional milestones are achieved.

Restricted cash is

classified as a current asset on the balance sheet and included in the total

cash, cash equivalents, and restricted cash balances in the statement of cash

Changes in restricted cash are not presented as separate cash flows but

are reconciled in this note.

This classification and presentation provide

transparency regarding the Company's liquidity, as the restricted funds are not

available for general corporate purposes.

Significant Accounting Policies:

The significant accounting policies were described in Note 1 to the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2024 .

There have been no changes to these policies during the quarter ended March 31, 2025 that are of significance or potential significance to the Company.

There have been no changes to these policies during the quarter ended June 30, 2025 that are of significance or potential significance to the Company.

Recent accounting pronouncements:

5 unchanged sentences

The adoption of this ASU did not change the way the Company evaluates its reportable segments and, as a result, did not have a material impact on the Company’s segment-related disclosures.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

ASU 2023 - 09 , Income Taxes (Topic 740 ):

31 unchanged sentences

The following table disaggregates the Company’s revenue into primary product groups:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Audio conferencing

1 unchanged sentence

The following table disaggregates the Company’s revenue into major regions:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

North and South America

10 unchanged sentences

The following table sets forth the computation of basic and diluted loss per common share:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Basic weighted average shares outstanding

6 unchanged sentences

Intangible Assets

Intangible assets as of March 31, 2025 and December 31, 2024 consisted of the following:

Intangible assets as of June 30, 2025 and December 31, 2024 consisted of the following:

Estimated useful lives (years)

March 31, 2025

June 30, 2025

December 31, 2024

4 unchanged sentences

Total intangible assets, net

The amortization of intangible assets for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

The amortization of intangible assets for three and six months ended June 30, 2025 and 2024 was as follows:

Three months ended June 30,

Six months ended June 30,

Amortization of intangible assets

4 unchanged sentences

2025 (Remainder)

Inventories, net of reserves, as of March 31, 2025 and December 31, 2024 consisted of the following:

March 31, 2025

Inventories, net of reserves, as of June 30, 2025 and December 31, 2024 consisted of the following:

June 30, 2025

December 31, 2024

5 unchanged sentences

We expect to sell the above inventory, net of reserves, at or above the stated cost and believe that no loss will be incurred on its sale, although there can be no assurance of the timing or amount of any sales.

Net loss incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

Net loss incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory

Net loss incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory for three and six months ended June 30, 2025 and 2024 was as follows:

Three months ended June 30,

Six months ended June 30,

Net loss (recovery) incurred on valuation of inventory at lower of cost or net realizable value and write-off of obsolete inventory

Rent expense is recognized on a straight-line basis over the period of the lease taking into account future rent escalation and holiday periods.

Rent expense for three months ended March 31, 2025 and 2024 was as follows:

Three months ended March 31,

Rent expense for three and six months ended June 30, 2025 and 2024 was as follows:

Three months ended June 30,

Six months ended June 30,

The Company occup ies a 1,350 square-foot facility in Gainesville, Florida under the terms of an operating lease expiring in F ebruary 2028 .

12 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Three months ended March 31,

Six months ended June 30,

Cash paid for amounts included in the measurement of lease liabilities

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

March 31, 2025

June 30, 2025

December 31, 2024

5 unchanged sentences

Weighted average discount rate for operating leases

The following represents maturities of operating lease liabilities as of March 31, 2025 :

The following represents maturities of operating lease liabilities as of June 30, 2025 :

Years ending December 31,

4 unchanged sentences

(Unaudited - Dollars in thousands, except per share amounts)

Convertible Notes Payable

On June 25, 2025, the Company filed a Current Report on Form 8-K disclosing several material events.

On June 20, 2025, the Company entered into a Note Purchase Agreement with First Finance Ltd., pursuant to which First Finance Ltd.

purchased $ 3,000,000 aggregate principal amount of convertible notes in a private placement exempt from registration under Section 4 (a)( 2 ) of the Securities Act of 1933 , as amended.

The convertible notes accrue interest at 10 % per annum and are mandatorily convertible into shares of newly designated Class B Convertible Preferred Stock upon the issuance of Class A Redeemable Preferred Stock as a dividend to common stockholders (which occurred July 18, 2025 –

see Note 13).

The Class B Convertible Preferred Stock is further convertible into common stock at a conversion price of the lower of:

(i) the closing price (as reflected on Nasdaq.com);

or (ii) the average closing price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding June 20, 2025 (subject to adjustment for stock splits, dividends, and similar events).

First Finance Ltd.

is also granted an option to purchase up to an additional $ 2,000,000 of Class B Convertible Preferred Stock.

The proceeds from the convertible notes are restricted to a specified disbursement schedule.

In accordance with the note provisions, interest expense was computed for the days the note was in place during the end of June.

This interest was added to the loan balance as of June 30, 2025 in the amount of $ 8 , resulting in a total note payable balance of $ 3,008 being reported on the balance sheet

For additional details, refer to the Company's Current Report on Form 8-K filed with the SEC on June 25, 2025, including the Certificates of Designation attached as Exhibits 3.1 and 3.2 , the Note Purchase Agreement attached as Exhibit 10.1 , and the Convertible Note attached as Exhibit 10.2 thereto.

Composition of Notes Payable

Interest Rate

Maturity Date

June 30, 2025

December 31, 2024

Convertible Note

June 30, 2025

Total Notes Payable

Schedule of Future Maturities of Notes Payable

Year ending December, 31

Remainder of 2025

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Shareholders' Equity

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Common stock and additional paid-in capital

21 unchanged sentences

(Dollars in thousands, except per share amounts)

Amendments to Certificate of Incorporation and

Reverse Stock Split

At the special meeting of stockholders held on May 30,

2025, stockholders approved amendments to the Certificate of Incorporation to:

(i) increase the authorized number of shares of common stock from 50,000,000 to

150,000,000 ;

(ii) authorize 50,000,000 shares of "blank check"

preferred stock;

(iii) effect a reverse stock split at a ratio between 1-for-10

and 1-for-15, with the exact ratio to be determined by the Board of Directors ;

and (iv) eliminate the prohibition on stockholder action by written consent and

to allow such actions.

Following stockholder approval, on June 4, 2025, the

Company filed a Certificate of Amendment to its Certificate of Incorporation to

effect these changes, including the selection of a 1-for-15 reverse stock split

ratio , which became effective at 5:00 p.m.

Eastern Time on June 9, 2025.

common stock began trading on a split-adjusted basis on the Nasdaq Capital

Market on June 10, 2025, under the symbol "CLRO" and a new CUSIP

number of 18506U203.

The reverse stock split was primarily intended to increase

the per share market price of the common stock in order to regain compliance

with the minimum bid price requirement for continued listing on the Nasdaq

Capital Market.

As a result of the reverse stock split, every 15 shares of issued

and outstanding common stock were automatically combined into one share, with

no fractional shares issued (any fractional interests were converted to one

whole share).

The reverse stock split did not change the par value of the

common stock but reduced the number of issued and outstanding shares from

approximately 26.0 million to approximately 1.7 million, with proportional

adjustments to outstanding stock options, warrants, and shares reserved under

equity incentive plans.

All share and per-share amounts in these condensed

consolidated financial statements and related notes have been retroactively

adjusted to reflect the reverse stock split for all periods presented.

For additional details, including the Certificate of Amendment, refer to the Company's Current Report on Form

8-K filed with the SEC on June 2, 2025, including the press release attached as

Exhibit 99.1 and the Certificate of Amendment attached as Exhibit 3.1 thereto.

Preferred Stock Designations and Related Matters

In connection with the transaction mentioned in Note 7,

on June 24, 2025, the Company filed Certificates of Designation with the State

of Delaware authorizing up to 2,069,066 shares of Class A Redeemable Preferred

Stock and 5,100 shares of Class B Convertible Preferred Stock.

Redeemable Preferred Stock, which ranks senior to common stock and is

redeemable upon an Asset Sale (defined as the sale of all or substantially all

of the Company's current assets and operations, which the Company is required

to pursue using reasonable best efforts within 180 days of issuance), was issued on July 18, 2025 as a dividend to holders of common stock and common stock equivalents of record as of July 11, 2025.

Net proceeds from any Asset Sale will be

distributed pro rata to holders of Class A Redeemable Preferred Stock.

Class B Convertible Preferred Stock ranks senior to common stock and other

equity (except Class A Redeemable Preferred Stock), with specific rights

including dividends, voting (on an as-converted basis), and liquidation

Additionally, effective June 20, 2025, the Board of

Directors was expanded from four to five members, with Eric Boehnke and

Youngsun Park (a/k/a Sunny Park), nominees of First Finance Ltd., appointed as

directors to serve until the next annual meeting or until their successors are

elected and qualified.

Neither appointee has any material arrangements or

family relationships with the Company requiring disclosure under Item 404(a) of

Regulation S-K, and they will receive standard director compensation.

For additional details, refer to the Company's Current

Report on Form 8-K filed with the SEC on June 25, 2025, including the

Certificates of Designation attached as Exhibits 3.1 and 3.2, the Note Purchase

Agreement attached as Exhibit 10.1, and the Convertible Note attached as

Exhibit 10.2 thereto.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Share-based Compensation

2 unchanged sentences

The Company uses the Black-Scholes option pricing model to determine the fair value of share-based payments granted under the guidelines of ASC Topic 718 .

A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2025 , is as follows:

A summary of the stock option activity under the Company’s plans for the six months ended June 30, 2025 , is as follows:

Number of shares

3 unchanged sentences

Canceled or expired

Options outstanding at March 31, 2025

Options exercisable at end of March 31, 2025

As of March 31, 2025 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 88 , which will be recognized over a weighted average period of 1.35 years.

Options outstanding at June 30, 2025

Options exercisable at end of June 30, 2025

As of June 30, 2025 , the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $ 66 , which will be recognized over a weighted average period of 1.23 years.

Share based compensation expense has been recorded as follows:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of goods sold

6 unchanged sentences

The full domestic valuation allowance was recorded as management concluded that it is more likely than not that these deferred tax assets are not realizable due to the Company's recent pre-tax losses and other sources of negative evidence.

Provision for income taxes for the three months ended March 31, 2025 mostly represents income tax expense (benefit) recorded for jurisdictions outside the United States.

The Company had approximately $ 969 of uncertain tax positions as of March 31, 2025 .

Provision for income taxes for the six months ended June 30, 2025 mostly represents income tax expense (benefit) recorded for jurisdictions outside the United States.

The Company had approximately $ 969 of uncertain tax positions as of June 30, 2025 .

Due to the inherent uncertainty of the underlying tax positions, it is not possible to forecast the payment of this liability for any particular year, therefore, it is reflected in other long-term liabilities.

6 unchanged sentences

Because the Company operates as one operating segment, financial segment information, including expense and asset information, can be found in the consolidated financial statements.

Restructuring and Other Charges

On June 20, 2025, the Company implemented a reduction in force affecting

a significant portion of its workforce as part of operational scaling in

connection with the pursuit of the Asset Sale, while continuing sales,

inventory management, customer support, and public reporting obligations.

result in severance and related costs estimated at approximately $ 1.9 million

and are expected to be incurred primarily in the third quarter of 2025.

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

Subsequent Events

On June 30, 2025, the Company filed a Current Report on Form 8-K announcing that its Board of Directors had declared a one -time special stock dividend on the Company's issued and outstanding shares of common stock, par value $ 0.001 per share, and any common stock equivalents with dividend rights (the “Special Stock Dividend”).

The Special Stock Dividend consisted of one share of the Company's Class A Redeemable Preferred Stock, par value $ 0.001 per share, for every issued and outstanding share of common stock and common stock equivalent.

The record date for the Special Stock Dividend was July 11, 2025, and the dividend was paid on July 18, 2025, to stockholders of record as of the record date.

This Special Stock Dividend is part of the Company's ongoing strategic process to pursue an Asset Sale (defined as the sale of all or substantially all of the Company's current assets and operations), with the Class A Redeemable Preferred Stock to be redeemed for 100 % of the net proceeds from any such Asset Sale upon its completion.

No additional dividends are authorized or contemplated at this time, and future dividends remain at the discretion of the Board of Directors.

For additional details, refer to the Company's Current Report on Form 8-K filed with the SEC on June 30, 2025, including the press release attached as Exhibit 99.1 thereto.

Following the issuance of the Special Stock Dividend, on July 21, 2025, the aggregate $ 3,025 outstanding principal amount and accrued interest under the convertible note issued to First Finance Ltd.

on June 20, 2025 automatically converted into 3,026 shares of Class B preferred stock pursuant to the terms and conditions of the Note Purchase Agreement described under Note 7 – Convertible Notes Payable.

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. Financial Statements