What changed in this filing

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Item 1A. Risk Factors

2026-05-12 compared with 2025-11-13 · 146 added, 43 removed, 1 unchanged (99% of the section changed)

Risk Factors.

Except as set forth below, as of the date of this

Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in described in our Form

S-4 filed on January 15, 2025 and Closing Form 8-K filed on June 26, 2025.

Any of these factors could result in a significant or material

adverse effect on our results of operations or financial condition.

Additional risk factors not presently known to us or that we currently

deem immaterial may also impair our business or results of operations.

Business disruptions could have serious

adverse consequences on our future revenue and financial condition and result in losses that may not be covered by insurance.

Our operations, particularly our operations in

Puerto Rico, could be subject to the impact of natural or man-made disasters or other business disruptions, which include, but are not

limited to, earthquakes, hurricanes, typhoons, floods, water shortages, wildfires and fires, blizzards and other extreme weather conditions

as well as power outages, telecommunications, transportation or infrastructure failure, cybersecurity incidents or physical security breaches

related to such catastrophes, public health crises, such as pandemics and epidemics, and geopolitical conflicts, including acts of terrorism,

war and civil disorder.

We carry insurance against certain risks and in such amounts as we believe are customary for businesses of our

However, as the costs and availability of insurance change, we may decide not to be covered against certain losses, including losses

resulting from such natural and man-made disasters or environmental liabilities where, in the judgment of management, the insurance is

not warranted due to cost or availability of coverage or the remoteness of perceived risk.

Furthermore, there are certain types of losses

that are generally not insured because they are either uninsurable or not economically insurable.

Moreover, the cost of insurance has

increased significantly, including as a result of the impact of climate change and inflation, and we may not be able to obtain sufficient

coverage at a reasonable cost to protect us against losses.

Our wholly-owned subsidiary in Puerto Rico

has been granted certain incentives under Act 60 (described below), and the validity of these incentives are conditioned on our continuous

compliance with the terms and conditions of the grant.

Our Puerto Rican subsidiary has been granted various

incentives under Act 60, including a reduced 1% income tax rate on its industrial development income and a 15-year exemption term from

(i) December 23, 2024 for income tax purposes, (ii) January 1, 2024 for real and personal property tax purposes, and (iii) January 1,

2025 for municipal license tax purposes.

The validity of these tax incentives is conditioned on our Puerto Rican subsidiary’s

continuous compliance with the terms and conditions of the grant.

Sales of Equity Securities

and Use of Proceeds.

On June 18, 2025, we consummated the private placement

of 3,323,536 shares of Common Stock for an aggregate purchase price of $13,294,144 (the “Private Placement”).

Following the

closing of the Private Placement, proceeds of the sale of the Common Stock was available for the Company’s working capital purposes

The shares were subsequently registered with the SEC pursuant to our S-1 filing on September 18, 2025.

Defaults Upon Senior Securities

Mine Safety Disclosures.

Not applicable.

As of the date of this Quarterly Report, there have been no material

changes to the risk factors previously disclosed in our Form 10-K filed on March 11, 2026, and our Closing Form 8-K filed on June 26,

2025, other than as provided below.

Any of these factors could have a material adverse effect on our results of operations or financial

Additional risks not currently known to us or that we presently consider immaterial may also adversely affect our business

or results of operations.

The issuance of shares of our Common Stock to White Lion under

the Common Stock Purchase Agreement will dilute the ownership interest of our existing stockholders.

We may sell up to $10,000,000 of our Common Stock to White Lion Capital,

LLC (“White Lion” or the “Selling Securityholder”) under the Common Stock Purchase Agreement.

The shares will

be sold to White Lion at a discount to the then-prevailing market price.

To the extent we sell shares to White Lion under the Common Stock

Purchase Agreement dated April 17, 2026 between us and White Lion (the “Common Stock Purchase Agreement” or “ELOC Agreement”),

additional shares of our Common Stock will be issued, which will result in dilution to the holders of our Common Stock.

In addition, the

lower our stock price is at the time we elect to sell shares, the more shares we would need to issue for any given dollar amount of proceeds,

resulting in greater dilution to our existing stockholders.

Our existing stockholders may experience substantial dilution as a result

of issuances of shares under the Common Stock Purchase Agreement, and such dilution could cause the trading price of our Common Stock

It is not possible to predict the actual number of shares we

will sell to White Lion under the ELOC Agreement, or the actual gross proceeds resulting from those sales.

We may not have access to the

full amount available under the ELOC Agreement.

On April 17, 2026, we entered into the Common Stock Purchase Agreement

with White Lion, pursuant to which White Lion committed to purchase up to $10,000,000 of our Common Stock, subject to certain limitations

and conditions set forth in the Common Stock Purchase Agreement.

The Common Stock that may be issued under the Common Stock Purchase Agreement

may be sold by us to White Lion at our discretion, from time to time, over a period ending December 31, 2028, commencing on the date of

the ELOC Agreement.

We generally have the right to control the timing and amount of any sales of our Common Stock to White Lion under

the ELOC Agreement.

Sales of our Common Stock to White Lion under the ELOC Agreement will depend upon market conditions as well as other

factors to be determined by us.

We may ultimately decide to sell to White Lion all or a portion of the shares of our Common Stock that

may be available pursuant to the ELOC Agreement, or decide to terminate the ELOC Agreement or not sell to White Lion any Common Stock

that may be available for us to sell to White Lion thereunder.

Because the purchase price per share to be paid by the White Lion for

the shares of Common Stock that we may elect to sell to White Lion under the ELOC Agreement will fluctuate based on the market prices

of our Common Stock during the applicable pricing period for each purchase, it is not possible for us to predict the number of Common

Stock that we will sell to White Lion under the ELOC Agreement, the purchase price per share that the White Lion will pay for shares purchased

from us under the ELOC Agreement, or the aggregate gross proceeds that we will receive from those purchases by the White Lion under the

ELOC Agreement.

Although the ELOC Agreement provides that we may sell up to an aggregate

of $10,000,000 of shares of Common Stock to White Lion, only 15,000,000 shares of Common Stock that may be issued to White Lion under

the ELOC Agreement are registered for resale by White Lion.

If we elect to sell to White Lion all of the 15,000,000 shares of Common

Stock registered for resale by White Lion, depending on the market prices of our Common Stock during the applicable pricing period for

each purchase made pursuant to the ELOC Agreement, the actual gross proceeds from the sale of all such shares may be substantially less

than the $10,000,000 total commitment originally available to us under the ELOC Agreement.

In addition, White Lion will not be required to purchase any shares

of Common Stock if such sale would result in White Lion’s beneficial ownership exceeding 4.99% of the then-outstanding voting power

or shares of Common Stock;

provided, that the beneficial ownership limitation may be increased to 9.99% upon the mutual written agreement

of the Company and White Lion, effective not less than sixty-one (61) days after such mutual written agreement.

Any issuance and sale

by us under the ELOC Agreement of a substantial amount of shares of our Common Stock in addition to the 15,000,000 shares of Common Stock

registered for resale by White Lion could cause additional substantial dilution to our stockholders.

The number of shares of Common Stock

ultimately offered for resale by White Lion is dependent upon the number of shares of Common Stock we ultimately sell to White Lion under

the ELOC Agreement.

Our inability to access a portion or the full amount available under the ELOC Agreement, in the absence of any other

financing sources, could have a material adverse effect on our business.

The issuance of certain securities under the Common Stock Purchase

Agreement, the common stock purchase warrant issued to White Lion (the “Commitment Warrant”), and the Note Purchase Agreement

is contingent upon us obtaining stockholder approval pursuant to Nasdaq Rule 5635 (“Stockholder Approval”).

If we do not obtain

the Stockholder Approval, these securities may never become issuable and/or exercisable.

If it becomes necessary for us to issue and sell to White Lion Common

Stock in excess of the exchange cap under the Common Stock Purchase Agreement in order to receive aggregate gross proceeds equal to $10,000,000

under the Common Stock Purchase Agreement, then for so long as the Exchange Cap continues to apply to issuances and sales of Common Stock

under the Common Stock Purchase Agreement, we must first obtain Stockholder Approval.

In addition, no tranche of the convertible notes

may be funded until Stockholder Approval has been obtained.

If we are unable to obtain the required Stockholder Approval, these securities

will not be issuable and/or exercisable, and will have little to no value.

The Company has agreed to use commercially reasonable efforts to duly

call, give notice of, convene, and hold a stockholder meeting (the “Stockholder Meeting”) as soon as reasonably practicable,

but in no event later than May 15, 2026, for the purposes of obtaining Stockholder Approval.

If the Company fails to hold a Stockholder

Meeting by May 15, 2026, it shall pay liquidated damages to White Lion, as more fully described in the Common Stock Purchase Agreement.

In the event Stockholder Approval is not obtained at the first Stockholder Meeting, the Company is obligated to cause an additional Stockholder

Meeting to be held every one hundred eighty (180) days during the period beginning on such date and continuing seven hundred twenty (720)

days thereafter, until Stockholder Approval is obtained.

Investors who buy shares at different times will likely pay different

Pursuant to the ELOC Agreement, we will have discretion, subject to

market demand, to vary the timing, prices, and numbers of shares sold to the White Lion.

If and when we do elect to sell shares of Common

Stock to the White Lion under the ELOC Agreement, after the White Lion has acquired such shares, the White Lion may resell all or a portion

of such shares at any time or from time to time in its discretion and at different prices.

As a result, investors who purchase shares

from the White Lion at different times will likely pay different prices for those shares, and so may experience different levels of dilution

and in some cases substantial dilution and different outcomes in their investment results.

Investors may experience a decline in the value

of the shares they purchase from the White Lion as a result of future sales made by us to the White Lion at prices lower than the prices

such investors paid for their shares.

The sale and issuance of our Common Stock to the Selling Securityholder

will cause dilution to our existing stockholders, and the sale of the shares acquired by the Selling Securityholder, or the perception

that such sales may occur, could cause the price of our Common Stock to decline.

Sales of a substantial number of shares of our Common Stock in the

public market could occur at any time, subject to the restrictions and limitations described below.

If our shareholders sell, or the market

perceives that our shareholders intend to sell, substantial amounts of shares of our Common Stock in the public market following this

offering, the market price of shares of our Common Stock could decline significantly.

The Selling Securityholder can resell up to 51,000,000 shares.

the Selling Securityholder has acquired the shares, the Selling Securityholder may resell all, some, or none of those shares at any time

or from time to time in its discretion.

Therefore, sales to the Selling Securityholder by us could result in substantial dilution to the

interests of other holders of our Common Stock.

Additionally, sales of a substantial number of shares of our Common Stock in the public

market by the Selling Securityholder and/or by our other existing stockholders, or the perception that those sales might occur, could

depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities

in the future at a time and at a price that we might otherwise wish to effect sales.

We have broad discretion in the use of the net proceeds we receive

from the sale of shares to the Selling Securityholder and may not use them effectively.

Our management will have broad discretion in the application of the

proceeds we receive from the Selling Securityholder pursuant to sales of Common Stock under the Common Stock Purchase Agreement, if any,

and you will not have the opportunity as part of your investment decision to assess whether our management is using the proceeds appropriately.

Because of the number and variability of factors that will determine our use of our proceeds from the Selling Securityholder, their ultimate

use may vary substantially from their currently intended use.

The failure by our management to apply these funds effectively could result

in financial losses that could have a material adverse effect on our business and cause the price of our Common Stock to decline.

their use, we may invest the proceeds from the Selling Securityholder in short-term, investment-grade, interest-bearing securities.

investments may not yield a favorable return to our stockholders.

The convertible notes issuable to White Lion will be secured

by substantially all of our assets, and a default could result in White Lion foreclosing on our assets.

Our obligations under the convertible notes will be secured by a security

interest in all of our assets and personal property, including our intellectual property.

If we default under the convertible notes, White

Lion could foreclose on our assets, which could force us to curtail or cease our operations.

White Lion has the right to require us to apply a portion of

our financing proceeds toward repayment of the convertible notes.

Under the terms of the Note Purchase Agreement with White Lion, White

Lion has the right to require us to apply up to 10% of all cash proceeds received from the issuance of securities pursuant to the Common

Stock Purchase Agreement, the exercise of the Commitment Warrant, or the issuance of any other securities of the Company, toward repayment

of the convertible notes.

This could reduce the amount of proceeds available to us for working capital and other corporate purposes.

The exercise price of the Commitment Warrant is subject to full

ratchet anti-dilution adjustment, which could result in additional dilution to our stockholders.

The Commitment Warrant issued to White Lion includes a full ratchet

anti-dilution provision, pursuant to which the exercise price of the Commitment Warrant will be reduced to the effective price per share

of any new issuance of Common Stock or Common Stock equivalents below the then-current exercise price (subject to exceptions for exempt

Because the exercise price is initially set at 99% of the closing sales price of the Common Stock on the trading day prior

to the exercise date and is subject to downward adjustment, any future dilutive issuance by the Company could result in a reduction of

the exercise price and a corresponding increase in the number of shares issuable upon exercise, resulting in additional dilution to our

existing stockholders.

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 1A. Risk Factors