What changed in this filing

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Item 1A. Risk Factors

2026-08-11 compared with 2026-05-13 · 62 added, 23 removed, 12 unchanged (88% of the section changed)

1 unchanged sentence

Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026.

changes to such risk factors have occurred during the three months ended March 31, 2026, except as described below:

changes to such risk factors have occurred during the six months ended June 30, 2026, except as described below:

are involved in litigation with Villani, Inc.

5 unchanged sentences

of California asserting claims for false advertising under the Lanham Act, breach of contract, and conversion, and seeking injunctive

Villani has also stated that it intends to initiate an arbitration proceeding against us seeking monetary damages.

arbitration demand has been served to date, we may become subject to additional claims, damages, costs, or other remedies in connection

with any such proceeding.

connection with the litigation, Villani sought a temporary restraining order (“TRO”) and preliminary injunction against

On May 6, 2026, the Court denied the TRO in part related to a breach of contract and conversion claims and granted the TRO in

part on the false or misleading advertising statements, which imposes certain temporary restrictions on specific statements the

Company can make pending further proceedings.

Villani has also requested a preliminary injunction, which, if granted, could extend

or grant new restrictions imposed by the Court during the pendency of any arbitration proceeding or related litigation.

vigorously defend ourselves against these claims;

however, litigation and arbitration proceedings are inherently uncertain, costly,

and time-consuming.

we are not currently restrained from manufacturing, promoting, advertising, using, selling, offering for sale, distributing, or

delivering in commerce any product or regimen containing Spongilla, if Villani were to obtain a preliminary injunction, arbitration

award, or otherwise, we could be restricted or delayed in our ability to market, manufacture, distribute, advertise, sell, or

commercialize certain of our current or planned products, including products containing our Spongilla .

Such restrictions

could disrupt our planned product launches, impair relationships with suppliers, manufacturers, distributors, marketing partners, or

customers, require us to modify our products, branding, formulations, or marketing claims, or otherwise adversely affect our

commercialization strategy.

In addition, defending this matter may require significant management attention and financial resources, result in substantial legal expenses,

divert resources from our business operations and strategic initiatives, and expose us to reputational harm.

relief (the “Lawsuit”).

On June 5, 2026, Villani filed a Statement of Claims with the American Arbitration Association, commencing

arbitration based on the same conduct alleged in the Lawsuit (“Arbitration”).

Villani alleges breach of contract, breach

of the duty of good faith and fair dealing, false advertising under the Lanham Act 15 USC § 1125, violation of California Business

and Professions Code §§ 17200, et seq., and conversion.

Villani seeks money damages in the Arbitration.

connection with the litigation, Villani sought a temporary restraining order (“TRO”) and preliminary injunction in the

On May 6, 2026, the Court denied the TRO in part related to the breach of contract and conversion claims and granted the

TRO in part on the false or misleading advertising statements, which imposed certain temporary restrictions on specific statements

the Company could make pending further proceedings.

On August 5, 2026, the Court denied Villani’s motion for a preliminary

injunction and vacated the injunctive relief granted in the TRO, and the company is not currently subject to any injunctive

restrictions.

In denying the motion, the Court found that questions exist going to the merits of Villani’s breach of contract

claim, but that Villani had not established a likelihood of immediate irreparable harm and that the balance of equities favored the

Villani continues to seek permanent injunctive relief in the Lawsuit and money damages in the Arbitration.

vigorously defending ourselves against these claims;

however, litigation and arbitration proceedings are inherently uncertain,

costly, and time-consuming.

we are not currently restrained from manufacturing, promoting, advertising, using, selling, offering for sale, distributing, or delivering

in commerce any product or regimen containing Spongilla , if Villani were to obtain injunctive relief at a later stage of the Lawsuit,

an arbitration award, or otherwise, we could be restricted or delayed in our ability to market, manufacture, distribute, advertise, sell,

or commercialize certain of our current or planned products, including products containing our Spongilla .

Such restrictions could

disrupt our planned product launches, impair relationships with suppliers, manufacturers, distributors, marketing partners, or customers,

require us to modify our products, branding, formulations, or marketing claims, or otherwise adversely affect our commercialization strategy.

In addition, defending this matter may require significant management attention and financial resources, result in substantial legal

expenses, divert resources from our business operations and strategic initiatives, and expose us to reputational harm.

failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock.

common stock is currently listed on the Nasdaq Capital Market.

Continued listing of a security on Nasdaq Capital Market is conditioned

upon compliance with various continued listing standards.

In the past, we have received notices from Nasdaq’s Listing Qualifications

Department indicating that we had not complied with certain of the Nasdaq Capital Market’s continued listing standards.

have regained compliance for each instance, there can be no assurance that we will continue to maintain compliance with the Nasdaq listing

requirements.

approval of the Securities and Exchange Commission, Nasdaq amended its listing rules on July 22, 2026, to provide that where a

listed company fails to meet the continued listing requirement for market value of listed securities of at least $5 million for 30

consecutive business days, such deficiency will result in immediate suspension and delisting, bypassing typical grace periods and

restricting appeal rights (the “MVLS Requirement”).

On July 29, 2026, the SEC’s Division of Trading and

Markets confirmed that it had received notices of intention to petition the full SEC for review of the approval, which automatically

stayed the order implementing the rule pending further action from the SEC.

This process is pending as of the filing date of this

Quarterly Report on Form 10-Q with no prescribed timeline for SEC action.

As of the time of this filing, our market value of listed

securities is currently below $5 million.

Because we are currently below the $5 million threshold, if and when the

MVLS Requirement becomes effective, we may become subject to immediate suspension and delisting, without any opportunity to

cure, if our market value of listed securities remains below $5 million for 30 consecutive business days.

delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result

of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect

our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers,

and employees and lead to fewer business development opportunities.

Additionally, the market price of our common stock may decline further,

and stockholders may lose some or all of their investment.

the event of a delisting, we anticipate that we would take actions to restore our compliance with the Nasdaq Capital Market or another

national exchange’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common

stock to remain listed on the Nasdaq Capital Market, stabilize our market price, improve the liquidity of our common stock, or prevent

future non-compliance with the Nasdaq Capital Market or another national exchange’s listing requirements.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

2 unchanged sentences

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