What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-13 · 204 added, 214 removed, 667 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

September 30,

Current Assets:

49 unchanged sentences

For the Three Months Ended

For the Six Months Ended

$ 7,073 $ 5,024 $ 10,467 $ 9,168

For the Nine Months Ended

September 30,

Services and other

5,957 8,091 12,297 16,232

13,030 13,115 22,764 25,400

Cost of sales

5,298 3,510 7,602 6,703

Services and other

2,715 2,817 5,692 6,145

Total cost of sales

8,013 6,327 13,294 12,848

5,017 6,788 9,470 12,552

Operating expenses:

Sales and marketing expenses

1,156 1,665 2,403 3,130

General and administrative expenses

5,192 4,531 9,120 8,906

Impairment of software asset

Total operating expenses

6,348 6,196 11,523 12,036

Operating (loss) income

( 1,331 ) 592 ( 2,053 ) 516

Other expenses (income):

Interest expense, including amortization of debt discount

513 513 834 1,176

Interest expense

Gain on settlement of contingent consideration

- - ( 4,775 ) -

Gain on change in fair value of contingent consideration

- ( 408 ) - ( 1,012 )

Loss (gain) on change in fair value of contingent consideration

Loss on debt extinguishment

- 1,059 - 1,059

Other (income) expense

( 1 ) 18 264 ( 17 )

Other expense (income)

Total other expenses (income)

512 1,182 ( 3,677 ) 1,206

Net (loss) income before income taxes

( 1,843 ) ( 590 ) 1,624 ( 690 )

Benefit (provision) for income taxes

26 ( 25 ) ( 73 ) ( 34 )

Net (loss) income

$ ( 1,817 ) $ ( 615 ) $ 1,551 $ ( 724 )

Basic (loss) earning per common share

$ ( 0.17 ) $ ( 0.06 ) $ 0.15 $ ( 0.07 )

Diluted (loss) earning per common share

$ ( 0.17 ) $ ( 0.06 ) $ 0.15 $ ( 0.07 )

Weighted average shares outstanding - basic

10,496 10,447 10,471 10,434

Weighted average shares outstanding - diluted

10,496 10,447 10,568 10,434

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities:

Net income (loss)

$ 1,551 $ ( 724 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities

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

Depreciation and amortization

6 unchanged sentences

Gain on settlement of contingent consideration

Impairment of software asset

Loss on extinguishment of debt

4 unchanged sentences

Accounts payable

( 207 ) ( 2,630 )

Accrued expenses and other current liabilities

1 unchanged sentence

Customer deposits

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Investing activities

Purchases of property and equipment

( 109 ) ( 8 )

Capitalization of labor for software development

( 1,155 ) ( 1,487 )

Net cash used in investing activities

( 1,264 ) ( 1,495 )

Financing activities

Proceeds from borrowings under revolving credit facility

18,334 13,860

Repayment of borrowings under revolving credit facility

( 15,285 ) ( 41 )

Settlement of contingent consideration

2 unchanged sentences

Principal payments on finance leases

( 26 ) ( 21 )

Net cash provided by (used in) financing activities

Increase (decrease) in cash and cash equivalents

( 468 ) 1,176

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$ 569 $ 4,086

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except shares)

Three Months Ended June 30, 2025

Balance as of March 31, 2025

10,446,659 $ 104 $ 83,252 $ ( 53,486 ) $ 29,870

Stock-based compensation

- - 1,249 - 1,249

Shares issued to directors as compensation

72,273 1 140 - 141

- - - ( 1,817 ) ( 1,817 )

Three Months Ended September 30, 2025

Balance as of June 30, 2025

10,518,932 $ 105 $ 84,641 $ ( 55,303 ) $ 29,443

Six Months Ended June 30, 2025

Stock-based compensation

Balance as of September 30, 2025

Nine Months Ended September 30, 2025

Balance as of December 31, 2024

10,446,659 $ 104 $ 82,210 $ ( 56,854 ) $ 25,460

Stock-based compensation

- - 1,251 - 1,251

Shares issued to directors as compensation

72,273 1 140 - 141

Issuance of warrants

- - 1,040 - 1,040

- - - 1,551 1,551

Balance as of September 30, 2025

Three Months Ended September 30, 2024

Balance as of June 30, 2024

10,518,932 $ 105 $ 84,641 $ ( 55,303 ) $ 29,443

Three Months Ended June 30, 2024

Balance as of March 31, 2024

10,446,659 $ 104 $ 82,200 $ ( 53,455 ) $ 28,849

Stock-based compensation

- - - ( 615 ) ( 615 )

Balance as of June 30, 2024

10,446,659 $ 104 $ 82,203 $ ( 54,070 ) $ 28,237

Six Months Ended June 30, 2024

Balance as of September 30, 2024

Nine Months Ended September 30, 2024

Balance as of December 31, 2023

10,409,027 $ 104 $ 82,073 $ ( 53,346 ) $ 28,831

Stock-based compensation

Shares issued to employees pursuant to the Retention Bonus Plan

37,632 - 124 - 124

- - - ( 724 ) ( 724 )

Balance as of June 30, 2024

10,446,659 $ 104 $ 82,203 $ ( 54,070 ) $ 28,237

Balance as of September 30, 2024

See accompanying notes to condensed consolidated financial statements.

21 unchanged sentences

2014 - 15, Disclosure of Uncertainties about an Entity ’ s Ability to Continue as a Going Concern (Subtopic 205 - 40 ) ( “ ASU 205 - 40 ” ) , the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued.

As of June 30, 2025, the Company has an accumulated deficit of $ 55,303 and positive working capital of $ 84 .

For the three months ended June 30, 2025, the Company generated an operating loss of $ 1,331 and positive net cash flows from operations of $ 773 .

As of September 30, 2025, the Company had an accumulated deficit of $ 63,165 and positive working capital of $ 526 .

For the three months ended September 30, 2025, the Company generated an operating loss of $ 7,270 .

Net cash used by operating activities for the nine months ended September 30, 2025 was $ 834 .

On March 14, 2025, the Company successfully resolved its contingent consideration obligations related to the Reflect merger, reducing the short-term liability burden and eliminating a material uncertainty that had existed in prior periods.

The Company remains reliant on improved cash flow generation, revenue growth, or access to external financing to fund operations and meet upcoming debt service obligations, including required amortization under the Promissory Note beginning October 2025 and its debt service obligations under its current Credit Agreement .

I n response to these conditions, the Company continues to evaluate its available options for amending its debt facilities or accessing the capital markets via equity financing.

These plans are in development but are not yet finalized, are subject to external market conditions, and involve elements outside of the Company’s control.

Therefore, they cannot be deemed probable to occur within one year after the date of issuance of the Condensed Consolidated Financial Statements.

The Company has concluded that due to its projected liquidity needs and uncertainty surrounding the successful execution of its plans, substantial doubt about the Company’s ability to continue as a going concern exists over the twelve months subsequent to the date of issuance of the Condensed Consolidated Financial Statements .

The Company remained reliant on improved cash flow generation, revenue growth, or access to external financing to fund operations and meet upcoming debt service obligations, including required amortization under the Promissory Note beginning October 2025 and its debt service obligations under its current Credit Agreement .

As part of ongoing liquidity management, the Company has pursued several strategic alternatives including debt refinancing and capital market transactions.

While management had substantially advanced these initiatives as of September 30, 2025, they were not completed until after the period.

Based on conditions existing at September 30, 2025, management concluded that substantial doubt existed about the Company's ability to continue as a going concern within one year after the date of issuance of the Condensed Consolidated Financial Statements.

On November 6, 2025, the Company completed a refinancing of its senior debt facilities, and on November 7, 2025, the Company completed the acquisition of DDC Group International, Inc.

and related financing arrangements.

Management believes these actions are likely to significantly improve the Company’s liquidity, scale, and overall financial condition.

Our ability to generate positive net income and cash flows from operations is reliant on the successful integration and operation of this newly acquired business and therefore the financial impacts of this acquisition were not fully known at the time of the Company's going-concern assessment.

Management believes the completion of these transactions and the planned integration and operating plan for the newly acquired business present the opportunity to mitigate the conditions giving rise to substantial doubt regarding the Company’s ability to continue as a going concern in future periods.

However, there can be no assurance that these efforts will be successful.

The Condensed Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

21 unchanged sentences

Cash and cash equivalents consist of cash on deposit in financial institutions, in both the United States and Canada.

The Company does not hold any investments that qualify as cash equivalents as of June 30, 2025.

As of June 30, 2025, the Company had approximately $ 482 in cash that was held in a Canadian financial institution.

The Company does not hold any investments that qualify as cash equivalents as of September 30, 2025.

As of September 30, 2025, the Company had approximately $ 184 in cash that was held in a Canadian financial institution.

The Company does not believe the balance presents a material concentration of credit risk, as the cash is held with a reputable financial institution.

24 unchanged sentences

The allowance for credit losses is included in accounts receivable, net in the accompanying Condensed Consolidated Balance Sheets.

The Company had the following activity for its allowance for credit losses for the six months ended June 30, 2025 and 2024:

The Company had the following activity for its allowance for credit losses for the nine months ended September 30, 2025 and 2024:

September 30,

Balance as of beginning of period

1 unchanged sentence

Write-offs charged against the allowance

( 200 ) ( 1 )

Balance as of end of period

Inventories are stated at the lower of cost or net realizable value, determined by the first -in, first -out (FIFO) method, and consist of the following:

September 30,

Raw materials

15 unchanged sentences

Diluted weighted average shares outstanding includes outstanding common shares and potential dilutive common shares outstanding in accordance with the treasury stock method.

Shares reserved for outstanding stock options and warrants totaling 7,290,816 and 6,219,800 at June 30, 2025 and 2024 , respectively, were excluded from the computation of earning (loss) per share for the six months ended June 30, 2025 and 2024, as the exercise prices on those options and warrants were higher than the Company’s average market price during the period and therefore anti-dilutive.

Shares reserved for outstanding stock options and warrants totaling 7,858,316 and 6,219,800 at June 30, 2025 and 2024 , respectively, were excluded from the computation of loss per share for the three months ended June 30, 2025 and 2024, as those options and warrants were anti-dilutive.

Shares reserved for outstanding stock options totaling 1,891,013 and warrants totaling 5,364,802 at September 30, 2025 , were excluded from the computation of loss per share for the three and nine months ended September 30, 2025, as the exercise prices on those instruments were higher than the Company’s average market price during the period and therefore anti-dilutive.

In addition, 560,000 outstanding stock options were excluded from the computation of loss per share for the three and nine months ended September 30, 2025, as the company was in a net loss position, and their inclusion would have been anti-dilutive.

Shares reserved for outstanding stock options totaling 1,632,242 and warrants totaling 4,587,002 at September 30, 2024, were excluded from the computation of loss per share for the nine months ended September 30, 2024, as the exercise prices on those instruments were higher than the Company’s average market price during the period and therefore anti-dilutive.

Shares reserved for outstanding stock options totaling 1,632,242 and warrants totaling 1,731,499 at September 30, 2024, were excluded from the computation of earning per share for the three months ended September 30, 2024, as the exercise prices on those instruments were higher than the Company’s average market price during the period and therefore anti-dilutive.

Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates.

2 unchanged sentences

The Company accounts for uncertain tax positions utilizing an established recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

We had no uncertain tax positions as of June 30, 2025 and December 31, 2024.

We had no uncertain tax positions as of September 30, 2025 and December 31, 2024.

Goodwill and Intangible Assets

22 unchanged sentences

The Company applies ASC 606 for revenue recognition.

The following table disaggregates the Company’s revenue by major source for the three and six months ended June 30, 2025 and 2024 :

The following table disaggregates the Company’s revenue by major source for the three and nine months ended September 30, 2025 and 2024 :

September 30,

(in thousands)

65 unchanged sentences

As a result of the Settlement Agreement, the Company derecognized the previously recorded contingent consideration liability related to the Merger of $ 12,815 and recorded the fair value of the settlement consideration of $ 8,040 , which included $ 3,000 in cash, the $ 4,000 Promissory Note, and Settlement Warrants with a fair value of $ 1,040 .

The Company recognized a gain on settlement of $ 4,775 during the six months ended June 30, 2025 in the Condensed Consolidated Statement of Operations.

The Company recognized a gain on settlement of $ 4,775 during the nine months ended September 30, 2025 in the Condensed Consolidated Statement of Operations.

In conjunction with entering into the Settlement Agreement and related documents, the Company entered into a Consent Agreement dated March 14, 2025 with First Merchants Bank, among others (the “Consent Agreement”), pursuant to which (among other things) First Merchants Bank, the senior secured lender under the Company’s credit facility, agreed to waive certain negative covenants under the Company’s credit facility that may have otherwise been implicated by the transactions contemplated by the Settlement Agreement.

1 unchanged sentence

SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

Six Months Ended

Nine Months Ended

September 30,

Supplemental non-cash investing and financing activities

13 unchanged sentences

Intangible Assets

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

Intangible assets consisted of the following at September 30, 2025 and December 31, 2024:

September 30,

Technology platform

$ 7,140 $ 3,464 $ 7,140 $ 3,041

Purchased and developed software

14,932 6,141 13,780 5,006

Customer relationships

13,910 4,997 13,910 4,350

Trademarks and trade names

1,260 948 1,260 852

37,242 15,550 36,090 13,249

Accumulated amortization

15,550 13,249

Net book value of amortizable intangible assets

$ 21,692 $ 22,841

For the three months ended June 30, 2025 and 2024 , amortization of intangible assets charged to operations was $ 1,165 and $ 878 , respectively.

For the six months ended June 30, 2025 and 2024 , amortization of intangible assets charged to operations was $ 2,301 and $ 1,668 , respectively.

For the three months ended September 30, 2025 and 2024 , amortization of intangible assets charged to operations was $ 1,171 and $ 1,081 , respectively.

For the nine months ended September 30, 2025 and 2024 , amortization of intangible assets charged to operations was $ 3,472 and $ 2,749 , respectively.

During the three months ended September 30, 2025, the Company recognized an impairment charge of $ 5,712 related to a proprietary software platform capitalized as an intangible asset under ASC 350 - 40.

The impairment was recorded after management determined that expected future cash flows associated with the platform were not sufficient to recover its carrying amount, primarily due to uncertainty regarding the renewal of an existing software license agreement.

The uncertainty arose in September 2025 when the customer communicated that it was unable to renew its license agreement with the Company due to budget constraints, representing a triggering event under ASC 350 - 40.

The impairment charge was measured as the excess of the asset’s carrying amount over its estimated fair value, which was determined using an income approach based on expected discounted cash flows and Level 3 inputs in accordance with ASC 820.

The impairment charge is presented within operating expenses in the Condensed Consolidated Statements of Operations.

Goodwill represents the excess of the purchase price paid by the Company over the fair value of net assets acquired by the Company.

Goodwill is subject to an impairment review at a reporting unit level, evaluated on an annual basis at September 30 of each fiscal year, when an event occurs, or circumstances change that would indicate potential impairment.

Goodwill is subject to an impairment review at the reporting unit level, evaluated on an annual basis at September 30 of each fiscal year, or more frequently if events occur or circumstances change that indicate potential impairment.

The assessment may be performed quantitatively or qualitatively.

The Company has only one reporting unit, and therefore the entire goodwill is allocated to that reporting unit.

The Company has only one reporting unit, and therefore the entire goodwill balance is allocated to that reporting unit.

The Company assesses the carrying value of goodwill at the reporting unit level based on an estimate of the fair value of its reporting unit.

The Company performed its annual impairment of goodwill qualitatively in 2024 to determine whether it is more likely than not that the fair value of our reporting unit is below its carrying amount.

Using the qualitative approach, the Company reviews macroeconomic conditions, industry and market conditions and entity specific factors, including strategies and financial performance for potential indicators of impairment.

Based on the Company’s assessment, we determined that the fair value of our reporting unit exceeded its carrying value, and accordingly, the goodwill associated with the reporting unit was not considered to be impaired at September 30, 2024.

During the three months ended March 31, 2025, the Company identified a triggering event during the quarter due to a sustained decline in the Company’s stock price and resulting market capitalization falling below the carrying value of its reporting unit.

As a result, the Company performed a quantitative goodwill impairment test as of March 31, 2025.

The fair value of the reporting unit was estimated using a combination of the market approach and income approach (discounted cash flow method).

The market approach considered valuation multiples of comparable public companies and recent industry acquisition activity.

The income approach involved discounted projected cash flows based on management’s expectations of future performance, including historical trends, recent revenue growth, backlog, and customer acquisition activity.

The valuation reflected assumptions regarding future operating results, terminal growth, and a discount rate reflecting the Company’s weighted-average cost of capital and risk profile.

Based on this analysis, the Company concluded that the fair value of the reporting unit exceeded its carrying amount, and therefore, no goodwill impairment charge was recorded in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2025.

No indicators of impairment were identified during the three months ended June 30, 2025.

The Company recognizes that any changes in our projected 2025 results could potentially have a material impact on our assessment of goodwill impairment.

The Company performed its annual goodwill impairment assessment as of September 30, 2025, using a qualitative evaluation to determine whether it was more likely than not that the fair value of the reporting unit was below its carrying amount.

In performing the qualitative assessment, management considered relevant factors such as macroeconomic conditions, industry and market trends, overall financial performance, and changes in the Company’s operations or strategy.

Based on this assessment, management concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount, and therefore no goodwill impairment was recognized as of September 30, 2025.

The Company recognizes that any changes in its projected results could potentially have a material impact on the assessment of goodwill impairment.

The Company will continue to monitor the actual performance of its operations against expectations and assess indicators of possible impairment.

The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty, and complexity.

Should any indicators of impairment occur in subsequent periods, the Company will be required to perform an analysis in order to determine whether goodwill is impaired.

Should any indicators of impairment occur in subsequent periods, the Company will be required to perform an analysis to determine whether goodwill is impaired.

Debt for the Company consists of the following:

September 30,

Debt Instrument

3 unchanged sentences

Revolving Credit Facility

$ 16,093 $ 13,044 See below

Promissory Note

Total debt, gross

20,093 13,044

Deferred financing costs

Total debt, net

19,901 12,801

Current portion

Total long-term debt, net

$ 19,310 $ 12,801

Revolving Credit Facility

Credit Facilities

On May 23, 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) with First Merchants Bank (the “Bank”).

16 unchanged sentences

≥ 3.00 to 1.00

The effective interest rate at June 30, 2025 was 7.94 %.

The effective interest rate at September 30, 2025 was 7.74 %.

The Company pays accrued interest monthly on the first day of each successive calendar month.

1 unchanged sentence

Deferred financing costs are being amortized as interest expense over the respective debt instrument period, 36 months.

The Company had $ 16,093 in outstanding borrowings under the revolving credit facility as of June 30, 2025.

The Company had $ 18,163 in outstanding borrowings under the revolving credit facility as of September 30, 2025.

Total availability under the revolving facility was $ 3,937 .

As of June 30, 2025, the Company was in compliance with all applicable debt covenants.

On November 6, 2025 ( the “Refinancing Date”), the Company and certain of its subsidiaries (collectively, the “Borrowers”), entered into a new Credit Agreement (the “New Credit Agreement”) with the other loan parties signatory thereto (the “Loan Parties”), the financial institutions or other entities from time to time parties thereto (the “Lenders”) and First Merchants Bank, an Indiana bank, as Agent for the Lenders (“Agent”).

The New Credit Agreement amends and restates in its entirety the existing Credit Agreement dated as of May 23, 2024, as amended.

The New Credit Agreement provides the Borrowers with a $ 36,000 term loan (the “Term Loan”) and a $ 22,500 revolving credit facility (the “Revolver”), subject to the terms and conditions set forth in the New Credit Agreement.

The Term Loan and Revolver are further subject to the terms of the Term Loan Promissory Notes and Revolving Credit Promissory Notes executed in favor of the Lenders on the Refinancing Date.

Due to the timing of the refinancing, there was no covenant reporting requirement applicable for September 30, 2025.

Future financial covenant reporting will commence as of December 31, 2025.

Promissory Note

11 unchanged sentences

The Promissory Note includes a default interest provision that increases the stated interest rate to 17 % in the event of nonpayment or other specified defaults.

The effective interest rate at June 30, 2025 was 14 %.

The effective interest rate at September 30, 2025 was 14 %.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

Based on the history of losses of the Company, there continues to be a full valuation allowance against the net deferred tax assets of the Company with a definite life.

For the three months ended June 30, 2025 we reported a tax benefit of $ 26 .

We reported tax expense of $ 25 for the three months ended June 30, 2024.

For the six months ended June 30, 2025 and 2024, we reported tax expense of $ 73 and $ 34 , respectively.

At June 30, 2025 , the net deferred tax liabilities were $ 142 after valuation allowance, compared to net tax liabilities of $ 133 at December 31, 2024.

The Company had outstanding warrants accounted for as equity instruments in the Company’s Condensed Consolidated Financial Statements totaling 5,364,802 and 4,587,002 at June 30, 2025 and December 31, 2024, respectively.

The weighted average exercise price of the outstanding warrants was $ 4.66 and $ 4.90 at June 30, 2025 and December 31, 2024, respectively.

The weighted average remaining contractual life of the outstanding warrants was 3.06 and 3.11 years at June 30, 2025 and December 31, 2024, respectively.

For the three and nine months ended September 30, 2025 the Company recorded an income tax benefit of $ 82 and $ 9 , respectively.

For the three and nine months ended September 30, 2024, the Company recorded income tax expense of $ 192 and $ 226 , respectively.

At September 30, 2025 , the Company had net deferred tax liabilities of $ 132 after consideration of the valuation allowance, compared to net tax liabilities of $ 133 at December 31, 2024.

The Company had outstanding warrants accounted for as equity instruments in the Company’s Condensed Consolidated Financial Statements totaling 5,364,802 and 4,587,002 at September 30, 2025 and December 31, 2024, respectively.

The weighted average exercise price of the outstanding warrants was $ 4.66 and $ 4.90 at September 30, 2025 and December 31, 2024, respectively.

The weighted average remaining contractual life of the outstanding warrants was 2.81 and 3.11 years at September 30, 2025 and December 31, 2024, respectively.

On March 14, 2025, as part of the contingent consideration settlement described in Note 5 , the Company issued to the former Reflect stockholders, in their capacities as selling stockholders and not as outside investors, the Settlement Warrants to purchase their pro rata share of an aggregate of 777,800 shares of the Company’s common stock at an exercise price equal to $ 3.25 per share, subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications.

18 unchanged sentences

Performance Vesting Options

240,000 4.92 $ 7.59 240,000 $ 7.59

Market Vesting Options

733,334 6.96 $ 3.00 733,334 $ 3.00

Performance Vesting

3 unchanged sentences

Balance, December 31, 2024

733,334 3.00 591,897 $ 9.57 240,000 $ 7.59

- - 945,500 2.39 - -

Forfeited or expired

- - ( 17,217 ) 29.56 - -

Balance, June 30, 2025

733,334 3.00 1,520,180 $ 4.88 240,000 $ 7.59

The weighted average remaining contractual life for options exercisable is 5.79 years as of June 30, 2025 .

Balance, September 30, 2025

The weighted average remaining contractual life for options exercisable is 5.65 years as of September 30, 2025 .

Employee Awards

15 unchanged sentences

As a result of the amendment and corresponding vesting, the Company recognized stock compensation expense of $ 1,149 during the three months ended June 30, 2025.

On July 3, 2025, the Company granted 575,000 restricted stock options under the Plan.

The restricted stock options vest in three equal installments over a period of three years, subject to continued service through the applicable vesting dates.

On July 3, 2025, the Company granted 575,000 restricted stock units under the Plan.

The restricted stock units vest in three equal installments over a period of three years, subject to continued service through the applicable vesting dates.

The grant date fair value of the restricted stock units was estimated at $ 3.30 per share based on the closing price of the Company’s common stock on the grant date.

The Company expects to recognize stock-based compensation expense of approximately $ 1,898 over the requisite service periods.

Stock-based compensation expense recognized for the issuance of stock options for the three months ended June 30, 2025 and 2024, of $ 1,249 and $ 3 , respectively, was included in general and administrative expense in the Condensed Consolidated Financial Statements.

Stock-based compensation expense recognized for the issuance of stock options for the six months ended June 30, 2025 and 2024, of $ 1,251 and $ 6 , respectively, was included in general and administrative expense in the Condensed Consolidated Financial Statements.

At June 30, 2025 , there was $ 1,713 in unrecognized compensation expense related to unvested share-based awards for employees, which is expected to be recognized over a weighted-average period of approximately 2.84 years.

On September 15, 2025, the Company granted stock options to purchase an aggregate of 15,000 shares of common stock to employees under the Plan.

The options have an exercise price of $ 2.31 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94 %, expected term of 6.5 years, risk-free interest rate of 3.75 %, dividend yield of 0 %, and the Company’s stock price of $ 2.31 as of the valuation date.

The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 Compensation - Stock Compensation , based on the grant-date fair value of the options.

Stock-based compensation expense recognized for the three and nine months ended September 30, 2025 and 2024 was $ 308 and $ 1,559 , and $ 3 and $ 9 , respectively, and is included within general and administrative expense in the Condensed Consolidated Statements of Operations.

At September 30, 2025, unrecognized compensation cost related to unvested share-based awards totaled $ 3,278 , which is expected to be recognized over a weighted-average period of approximately 2.67 years.

SEGMENT REPORTING

17 unchanged sentences

Significant Customers

We had two customers that accounted for 29 % and 11 % of accounts receivable at June 30, 2025 and one customer that accounted for 16 % of accounts receivable at December 31, 2024.

We had one customer that accounted for 20 % of revenue for the three months ended June 30, 2025 , compared to four customers that accounted for 13 %, 13 %, 11 %, and 10 % of revenue for the three months ended June 30, 2024 .

We had two customers that accounted for 13 %, and 12 % of revenue for the six months ended June 30, 2025 , compared to three customers that accounted for 13 %, 12 %, and 10 % of revenue for the six months ended June 30, 2024 .

The Company had two customers that accounted for 28 % and 11 % of accounts receivable at September 30, 2025 and one customer that accounted for 16 % of accounts receivable at December 31, 2024.

No customer accounted for more than 10% of revenue for the three months ended September 30, 2025 , compared to two customers that accounted for 14 % and 12 %, of revenue for the three months ended September 30, 2024 .

No customer accounted for more than 10% of revenue for the nine months ended September 30, 2025 , compared to one customer that accounted for 12 % of revenue for the nine months ended September 30, 2024 .

Significant Vendors

We had two vendors that accounted for 29 % and 13 % of outstanding accounts payable at June 30, 2025 , and two vendors that accounted for 27 % and 10 % of outstanding accounts payable at December 31, 2024.

The Company had one vendor that accounted for 50 % of outstanding accounts payable at September 30, 2025 , and two vendors that accounted for 27 % and 10 % of outstanding accounts payable at December 31, 2024.

SUBSEQUENT EVENTS

On October 15, 2025, the Company entered into a Share Purchase Agreement with its wholly owned subsidiary, 1001372953 Ontario Inc., and Cineplex Entertainment Limited Partnership to acquire all of the issued and outstanding shares of DDC Group International, Inc.

(“DDC”), including its subsidiaries Cineplex Digital Media Inc.

and Cineplex Digital Media U.S.

(collectively, the “CDM Business”).

The total purchase price is approximately CAD $ 70,000 or USD $ 42,761 , subject to customary adjustments.

The acquisition was completed on November 7, 2025.

On October 15, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors to issue 30,000 shares of a newly designated Series A Convertible Preferred Stock (the “Preferred Stock”) for aggregate gross proceeds of $ 30,000 , which has a stated value of $ 1,000 per share (the “Stated Value”)(the “Offering”).

The Offering was completed on November 6, 2025.

The Preferred Stock will accrue dividends for a period of five years from and after the issuance date (the “Guaranteed Term”) at a rate of 5.25 % per year on the Stated Value, which will be payable in cash at the Company’s option after the Guaranteed Term.

To the extent that, during the Guaranteed Term, (i) the Company undergoes any liquidation, dissolution, winding up, or “Fundamental Transaction” (as defined in the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the “Certificate of Designations”)), or (ii) the Company elects to effect a mandatory conversion under circumstances permitted by the rights and preferences of the Preferred Stock (each, a “Make Whole Event”), then, immediately prior to the effective time of such Make Whole Event, the amount of dividends accrued on the Preferred Stock will automatically be increased by an amount equal to any additional dividends that would have otherwise accrued on the Preferred Stock between the date of the Make Whole Event and the end of the Guaranteed Term (the “Make Whole Payment”), and the dividends will thereafter cease to accrue.

Each share of Preferred Stock is convertible at the option of the holder into shares of the Company’s common stock (“Conversion Shares”) at a rate (the “Conversion Rate”) calculated by dividing (i) the Stated Value plus an amount per share equal to dividends accrued and unpaid through the date of determination (including, if applicable, any Make Whole Payment) (the “Liquidation Preference”), by (ii) a conversion price of $ 3.00 , subject to customary adjustment in the event of stock splits, stock dividends, and similar events (the “Conversion Price”), subject to certain conversion limitations set forth in the Certificate of Designations.

Holders of Preferred Stock are entitled to vote on an as-converted basis with holders of the Company’s common stock (after taking into the account the applicable conversion limitations).

The Company used net proceeds of the Offering to fund a portion of the purchase price to acquire the CDM Business.

The New Credit Agreement amends and restates in its entirety the existing Credit Agreement dated as of May 23, 2024, as amended.

The Term Loan and Revolver are further subject to the terms of the Term Loan Promissory Notes and Revolving Credit Promissory Notes executed in favor of the Lenders on the Refinancing Date.

On November 10, 2025, the Compensation Committee of the Board of Directors approved a transaction bonus in the amount of $ 270 payable to Richard Mills, Chief Executive Officer, for his services in connection with the New Credit Agreement, Offering and acquisition of the CDM Business.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

84 unchanged sentences

All dollar amounts reported in Results of Operations are in thousands, except share and per-share information.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

The tables presented below compare our results of operations and present the results for each period and the change in those results from one period to another in both dollars and percentage change.

For the three months

ended June 30,

ended September 30,

Cost of sales

1 unchanged sentence

General and administrative expenses

Impairment of software asset

Total operating expenses

1 unchanged sentence

Other expenses (income):

Interest expense, including amortization of debt discount

Gain on change in fair value of contingent consideration

Loss on debt extinguishment

Other (income) expense

Interest expense

Loss on change in fair value of contingent consideration

Other expense (income)

Total other expenses (income)

Net loss before income taxes

Net (loss) income before income taxes

Benefit (provision) for income taxes

Sales decreased $85, or 1%, for the three months ending June 30, 2025 as compared to the same period in 2024.

Hardware revenues were $7,073, an increase of $2,049, or 41%, for the three months ending June 30, 2025 as compared to the same period in 2024.

The increase in hardware revenues was primarily driven by purchases from customers in our QSR and sports and entertainment verticals, who procured hardware in advance of scheduled deployments anticipated in the second half of 2025.

Sales decreased $3,895, or 27%, for the three months ending September 30, 2025 as compared to the same period in 2024.

Hardware revenues were $4,168, a decrease of $1,073, or 20%, for the three months ending September 30, 2025 as compared to the same period in 2024.

The decrease in hardware revenues was primarily driven by a significant sports and entertainment installation in the prior year that did not occur in 2025.

Services and other revenues were $6,379, a decrease of $2,822 or 31%.

Installation services revenue decreased $799, or 39% for the three months ending June 30, 2025 as compared to the same period in 2024, due to fewer deployments in the period.

Installation services revenue decreased $1,802, or 62% for the three months ending September 30, 2025 as compared to the same period in 2024, due to fewer deployments in the period.

Managed services revenue, which includes the Company’s SaaS subscription services, were $4,456, a decrease of $429, or 9%, as compared to the same period in 2024, as a result of reductions in the quantity of licenses subject to software subscriptions on our platforms driven by a single customer which insourced a portion of their hosted environment.

Other services revenue decreased $972, or 81% for the three months ending June 30, 2025 as compared to the same period in 2024, as a result of the Company exiting media sales effective October 1, 2024.

Gross profit margin was 39% and 52% for the three months ending June 30, 2025 and 2024, respectively.

Hardware gross margin decreased 5%, as a result of scheduled deployments utilizing hardware with less favorable margins.

Other services revenue decreased $591, or 42% for the three months ending September 30, 2025 as compared to the same period in 2024, as a result of the Company exiting media sales effective October 1, 2024.

Gross profit margin was 45% and 46% for the three months ending September 30, 2025 and 2024, respectively.

Hardware gross margin increased 6% as a result of deployments utilizing hardware with more favorable margins due to the Company’s purchasing power.

Services and other gross margin decreased 3% as a result of a reduction in our SaaS subscription services and our exit from media sales effective October 1, 2024.

1 unchanged sentence

Sales and marketing expenses generally include the salaries, taxes, and benefits of our sales and marketing personnel, as well as trade show activities, travel, and other related sales and marketing costs.

Sales and marketing expenses decreased by $509, or 31%, for the three-month period ended June 30, 2025 as compared to the same period in 2024, driven primarily by decreases of (1) $452 in fixed and variable salaries, taxes and benefits of our sales and marketing personnel, and (2) $39 in trade show and marketing activities.

Sales and marketing expenses decreased by $153, or 10%, for the three-month period ended September 30, 2025 as compared to the same period in 2024, driven primarily by a decreases of $265 in fixed and variable salaries, taxes and benefits of our sales and marketing personnel, partially offset by an increase of $111 related to an increased investment in trade show and marketing activities during the quarter.

General and Administrative Expenses

General and administrative expenses increased by $661 or 15%, for the three months ending June 30, 2025 as compared to the same period in 2024.

The increase was primarily driven by a $1,339 rise in stock-based compensation expense for employees and directors.

Excluding stock-based compensation, general and administrative expenses decreased by $678, reflecting the impact of various cost containment efforts.

These included a $485 reduction in fixed and variable salaries, benefits, and payroll taxes for general and administrative personnel, as well as broad-based savings achieved across multiple spending categories.

The Company implemented a number of low-cost restructuring measures and targeted vendor spend reductions, none of which were individually material, but which collectively contributed to a more efficient back-office cost structure.

These actions were further supported by the retirement of legacy software platforms and the transition to a unified ERP system, which has enabled modest improvements in workflow efficiency and systems integration.

General and administrative expenses increased by $1,036 or 26%, for the three months ending September 30, 2025 as compared to the same period in 2024.

The increase was driven by (1) a $331 rise in stock-based compensation expense for employees and directors and (2) $766 in expenses related to deal and transaction costs incurred in relation to the announced acquisition of Cineplex Digital Media, which is expected to close in the fourth quarter of 2025.

Impairment of software asset

During the three months ended September 30, 2025, the Company recognized a non-cash impairment charge of $5,712 related to a proprietary software platform capitalized as an intangible asset under ASC 350-40.

The impairment loss was measured as the excess of the asset’s carrying amount over its estimated fair value, which was determined using an income approach based on discounted cash flows and Level 3 inputs under ASC 820.

The impairment did not impact cash flows or liquidity, but it did result in a significant increase in total operating expenses for the three months ended September 30, 2025 compared to the same periods in 2024.

Interest Expense

See Note 8 Debt to the Condensed Consolidated Financial Statements for a discussion of the Company’s debt and related interest expense obligations.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

The tables presented below compare our results of operations and present the results for each period and the change in those results from one period to another in both dollars and percentage change.

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

Cost of sales

1 unchanged sentence

General and administrative expenses

Impairment of software asset

Total operating expenses

1 unchanged sentence

Other expenses (income):

Interest expense, including amortization of debt discount

Interest expense

Gain on settlement of contingent consideration

3 unchanged sentences

Total other expenses (income)

Net income (loss) before income taxes

Net loss before income taxes

Provision from income taxes

Net income (loss)

Sales decreased $2,636, or 10%, for the six months ending June 30, 2025 as compared to the same period in 2024.

Hardware revenues were $10,467, an increase of $1,299, or 14%, for the six months ending June 30, 2025 as compared to the same period in 2024.

Sales decreased $6,531, or 16%, for the nine months ending September 30, 2025 as compared to the same period in 2024.

Hardware revenues were $14,635, an increase of $226, or 2%, for the nine months ending September 30, 2025 as compared to the same period in 2024.

The increase in hardware revenues was primarily driven by purchases from customers in our QSR and sports and entertainment verticals.

Services and other revenues were $18,676, a decrease of $6,758 or 27%.

Installation services revenue decreased $1,364, or 32% for the six months ending June 30, 2025 as compared to the same period in 2024, due to fewer deployments in the period.

Installation services revenue decreased $3,166, or 45% for the nine months ending September 30, 2025 as compared to the same period in 2024, due to fewer deployments in the period.

Managed services revenue, which includes the Company’s SaaS subscription services, were $13,187, a decrease of $1,319, or 9%, as compared to the same period in 2024, as a result of reductions in the quantity of licenses subject to software subscriptions on our platforms driven by a single customer which insourced a portion of their hosted environment.

Other services revenue decreased $1,681, or 70% for the six months ending June 30, 2025 as compared to the same period in 2024, as a result of the Company exiting media sales effective October 1, 2024.

Gross profit margin was 42% and 49% for the six months ending June 30, 2025 and 2024, respectively.

Hardware gross margin remained consistent at 27%.

Other services revenue decreased $2,272, or 60% for the nine months ending September 30, 2025 as compared to the same period in 2024, as a result of the Company exiting media sales effective October 1, 2024.

Gross profit margin was 43% and 48% for the nine months ending September 30, 2025 and 2024, respectively.

Hardware gross margin increased 2% as a result of deployments utilizing hardware with more favorable margins due to the Company’s purchasing power, combined with increased pricing on certain hardware-only purchases by customers.

Services and other gross margin decreased 6% as a result of a reduction in our SaaS subscription services and our exit from media sales effective October 1, 2024.

1 unchanged sentence

Sales and marketing expenses decreased by $727, or 23%, for the six-month period ended June 30, 2025 as compared to the same period in 2024, driven primarily by decreases of (1) $583 in fixed and variable salaries, taxes and benefits of our sales and marketing personnel, and (2) $118 in trade show and marketing activities.

Sales and marketing expenses decreased by $880, or 19%, for the nine-month period ended September 30, 2025 as compared to the same period in 2024, driven primarily by decreases of (1) $839 in fixed and variable salaries, taxes and benefits of our sales and marketing personnel, and (2) $41 in trade show and marketing activities.

General and Administrative Expenses

General and administrative expenses increased by $214 or 2%, for the six months ending June 30, 2025 as compared to the same period in 2024.

The increase was primarily driven by a $1,338 rise in stock-based compensation expense for employees and directors.

Excluding stock-based compensation, general and administrative expenses decreased by $1,124, reflecting the impact of various cost containment efforts.

General and administrative expenses increased by $1,249 or 10%, for the nine months ending September 30, 2025 as compared to the same period in 2024.

The increase was primarily driven by (1) a $1,669 rise in stock-based compensation expense for employees and directors and (2) $766 in expenses related to deal and transaction costs incurred in relation to the announced acquisition of Cineplex Digital Media, which is expected to close in the fourth quarter of 2025.

Excluding stock-based compensation and deal and transaction expenses, general and administrative expenses decreased by $1,186, reflecting the impact of various cost containment efforts.

These included a $700 reduction in fixed and variable salaries, benefits, and payroll taxes for general and administrative personnel, as well as broad-based savings achieved across multiple spending categories.

1 unchanged sentence

Impairment of software asset

During the nine months ended September 30, 2025, the Company recognized a non-cash impairment charge of $5,712 related to a proprietary software platform capitalized as an intangible asset under ASC 350-40.

The uncertainty arose in September 2025 when the customer communicated that it was unable to renew their license agreement due to budget constraints, representing a triggering event under ASC 350-40.

The impairment did not impact cash flows or liquidity, but it did result in a significant increase in total operating expenses for the nine months ended September 30, 2025 compared to the same periods in 2024.

Interest Expense

3 unchanged sentences

Other expenses (income)

The Company recognized $264 in other expenses for the six months ending June 30, 2025 , consisting primarily of (1) $120 in legal expenses incurred in connection with the contingent consideration settlement and (2) $136 in severance-related expenses in connection with the termination of certain employees as part of a cost-reduction initiative.

The Company recognized $408 in other expenses for the nine months ending September 30, 2025 , consisting primarily of (1) $121 in legal expenses incurred in connection with the contingent consideration settlement and (2) $283 in severance-related expenses in connection with the termination of certain employees as part of a cost-reduction initiative.

Summary Unaudited Quarterly Financial Information (Non-GAAP)

20 unchanged sentences

GAAP net (loss) income

Interest expense:

Amortization of debt discount

Other interest, net

Interest expense, net

Depreciation/amortization:

5 unchanged sentences

Gain on settlement of contingent consideration

Loss on debt extinguishment

Stock-based compensation - Director grants

Deal & transaction expenses

Loss on impairment of software asset

Other (income) expense

1 unchanged sentence

Liquidity and Capital Resources

As of June 30, 2025, we had an accumulated deficit of $55,303 and positive working capital of $84.

For the three months ended June 30, 2025, the Company generated an operating loss of $1,331 and positive net cash flows from operations of $773.

We remain dependent on improving cash flows from operations, securing additional sources of liquidity, or both, to fund ongoing operations to meet our financial obligations, including our debt obligations under our current Credit Agreement.

As of September 30, 2025, we had an accumulated deficit of $63,165 and positive working capital of $526.

For the three months ended September 30, 2025, the Company generated an operating loss of $7,270.

During the nine months ended September 30, 2025, the Company used $834 of net cash in operating activities.

Going Concern

1 unchanged sentence

However, these plans have not been finalized, are subject to market conditions, and in some respects are outside of our control.

Therefore, they cannot be deemed probable as of June 30, 2025.

Therefore, they cannot be deemed probable as of September 30, 2025.

As a result of the matters discussed above, including our losses, current liquidity level and projected capital needs, we have concluded that management’s plans do not alleviate substantial doubt about our ability to continue as a going concern within one year after the issuance date of the Condensed Consolidated Financial Statements included in this Report.

12 unchanged sentences

Operating Activities

The net cash provided by operating activities during the six months ended June 30, 2025 was $773, compared to net cash provided by operating activities of $4,206 for the same period in 2024.

During the six month period ending June 30, 2025, the Company generated net income of $1,551, which included a $4,775 gain on settlement of contingent liability, and depreciation and amortization expense (including amortization of stock compensation expense) of $3,748.

The Company generated $118 in cash due to changes in operating assets and liabilities, primarily due to decreases in inventory partially offset by decreases in accrued expenses.

The net cash used by operating activities during the nine months ended September 30, 2025 was $834, compared to net cash provided by operating activities of $4,750 for the same period in 2024.

During the nine month period ending September 30, 2025, the Company generated a net loss of $6,311, which included a $4,775 gain on settlement of contingent liability, depreciation and amortization expense (including amortization of stock compensation expense) of $5,308, and impairment expense of software asset of $5,712.

The Company used $1,054 in cash due to changes in operating assets and liabilities.

Investing Activities

Net cash used in investing activities during the six months ended June 30, 2025 was $1,264, compared to $1,495 during the same period in 2024.

We currently do not have any material commitments for capital expenditures as of June 30, 2025.

Net cash used in investing activities during the nine months ended September 30, 2025 was $1,973, compared to $2,302 during the same period in 2024.

We currently do not have any material commitments for capital expenditures as of September 30, 2025.

Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2025 was $23, compared to net cash used in financing activities of $1,535 for the same period in 2024.

Net cash provided by financing activities during the six month period ended June 30, 2025 is primarily the result of net proceeds of $3,049 from borrowings and payments under the Company’s revolving credit facility, partially offset by $3,000 in cash payments made to former Reflect stockholders pursuant to the Settlement Agreement.

Revolving Credit Facility

On May 23, 2024, we entered into a Credit Agreement (the “Credit Agreement”) with First Merchants Bank (the “Bank”).

The Credit Agreement provides us with a $22,100 secured revolving credit facility, with an uncommitted accordion feature that provides for additional borrowing capacity of up to $5,000, subject to the Bank’s approval and other customary terms and conditions set forth in the Credit Agreement.

The Credit Agreement was amended effective March 31, 2025 to temporarily modify our Senior Funded Debt to EBITDA covenant, allowing a ratio of less than 4.0 to 1 through June 30, 2025 and less than 3.75 to 1 thereafter.

The Credit Agreement matures in May 2027 and requires us to pay the entire unpaid principal balance upon maturity.

The Credit Agreement also includes customary events of default, including the occurrence of a material adverse effect, which could accelerate repayment of outstanding amounts at the Bank’s discretion.

The revolving credit facility accrues interest at a floating rate equal to the 1-month SOFR, plus 0.11%, plus a floating margin ranging from 2.00% to 3.50% that adjusts quarterly, depending upon our Senior Funded Debt to EBITDA Ratio.

The effective interest rate at June 30, 2025 was 7.94%.

Net cash provided by financing activities during the nine months ended September 30, 2025 was $2,084, compared to net cash used in financing activities of $4,490 for the same period in 2024.

Net cash provided by financing activities during the nine month period ended September 30, 2025 is primarily the result of net proceeds of $5,119 from borrowings and payments under the Company’s revolving credit facility, partially offset by $3,000 in cash payments made to former Reflect stockholders pursuant to the Settlement Agreement.

Credit Facilities

On May 23, 2024, we entered into a Credit Agreement (the “Prior Credit Agreement”) with First Merchants Bank (the “Bank”).

The Prior Credit Agreement provided us with a $22,100 secured revolving credit facility, with an uncommitted accordion feature that provides for additional borrowing capacity of up to $5,000, subject to the Bank’s approval and other customary terms and conditions set forth in the Prior Credit Agreement.

The Prior Credit Agreement was amended effective March 31, 2025 to temporarily modify our Senior Funded Debt to EBITDA covenant, allowing a ratio of less than 4.0 to 1 through June 30, 2025 and less than 3.75 to 1 thereafter.

The Prior Credit Agreement matured in May 2027 and required us to pay the entire unpaid principal balance upon maturity.

The Prior Credit Agreement also included customary events of default, including the occurrence of a material adverse effect, which could accelerate repayment of outstanding amounts at the Bank’s discretion.

The revolving credit facility accrued interest at a floating rate equal to the 1-month SOFR, plus 0.11%, plus a floating margin ranging from 2.00% to 3.50% that adjusted quarterly, depending upon our Senior Funded Debt to EBITDA Ratio.

The effective interest rate at September 30, 2025 was 7.74%.

We pay accrued interest monthly on the first day of each successive calendar month.

We had $16,093 in outstanding borrowings under the revolving credit facility as of June 30, 2025.

We had $18,163 in outstanding borrowings under the revolving credit facility as of September 30, 2025.

Total availability under the revolving facility was $3,937.

Effective June 30, 2025, we entered into a second amendment to the Credit Agreement that modifies the borrowing base margin over time, decreasing from 95% to 90% on September 30, 2025 and to 85% on October 31, 2025.

These changes may reduce our future borrowing availability under the facility.

Effective June 30, 2025, we entered into a second amendment to the Prior Credit Agreement that modifies the borrowing base margin over time, decreasing from 95% to 90% on September 30, 2025 and to 85% on October 31, 2025.

On November 6, 2025, we amended and restated the Prior Credit Agreement (the “New Credit Agreement”), pursuant to which the Company obtained a $36,000 term loan and a $22,500 secured revolving credit facility.

See Note 14 Subsequent Events to the Condensed Consolidated Financial Statements for a description of the New Credit Agreement.

Promissory Note

8 unchanged sentences

The principal balance of the Promissory Note (together with accrued but unpaid interest on such amounts) may be prepaid in whole or in part at any time prior to maturity, subject to our payment of a make-whole amount, which approximates the foregone interest the holders would have earned through the maturity date, based on a comparison to a benchmark “yield maintenance treasury rate.” The make-whole payment is equal to the aggregate monthly payments of interest on the prepayment amount that would be due after the prepayment date and through the maturity date, using the percentage, if any, by which the applicable interest rate exceeds a prescribed “yield maintenance treasury rate.”

We had outstanding warrants accounted for as equity instruments in our Condensed Consolidated Financial Statements totaling 5,364,802 and 4,587,002 at June 30, 2025 and December 31, 2024, respectively.

The weighted average exercise price of the outstanding warrants was $4.66 and $4.90 at June 30, 2025 and December 31, 2024, respectively.

The weighted average remaining contractual life of the outstanding warrants was 3.06 and 3.11 years at June 30, 2025 and December 31, 2024, respectively.

We had outstanding warrants accounted for as equity instruments in our Condensed Consolidated Financial Statements totaling 5,364,802 and 4,587,002 at September 30, 2025 and December 31, 2024, respectively.

The weighted average exercise price of the outstanding warrants was $4.66 and $4.90 at September 30, 2025 and December 31, 2024, respectively.

The weighted average remaining contractual life of the outstanding warrants was 2.81 and 3.11 years at September 30, 2025 and December 31, 2024, respectively.

On March 14, 2025, as part of the negotiated settlement of our contingent consideration obligations related to the Reflect merger, we issued to the former Reflect stockholders the Settlement Warrants to purchase their pro rata share of an aggregate of 777,800 shares of our common stock at an exercise price equal to $3.25 per share, subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications.

3 unchanged sentences

expected volatility of 94%, expected term of 6 years (matching the exercise term), risk-free interest rate of 4.15%, dividend yield of 0%, and our stock price of $1.88 as of the valuation date.

On October 15, 2025, we entered into a Securities Purchase Agreement with certain accredited investors to issue 30,000 shares of a newly designated Series A Convertible Preferred Stock (the “Preferred Stock”) for aggregate gross proceeds of $30,000, which has a stated value of $1,000 per share (the “Stated Value”)(the “Offering”).

The Offering was completed on November 6, 2025.

See Note 14 Subsequent Events to the Condensed Consolidated Financial Statements for a description of the Offering and the Preferred Stock.

Off-Balance Sheet Arrangements

During the three and six months ended June 30, 2025, we did not engage in any off-balance sheet arrangements set forth in Item 303(a)(4) of Regulation S-K.

During the three and nine months ended September 30, 2025, we did not engage in any off-balance sheet arrangements set forth in Item 303(a)(4) of Regulation S-K.

Quantitative and Qualitative Disclosures about Market Risk

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. Financial Statements