What changed in this filing

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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 950 added, 690 removed, 1206 unchanged (58% of the section changed)

7 unchanged sentences

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting (as defined in Rule 13a-15(f) ender the Exchange Act) includes those policies and procedures that:

Internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management (with the participation of the CEO and CAO) conducted an evaluation of the effectiveness of Company’s internal control over financial reporting based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Management conducted an evaluation of the effectiveness of Company’s internal control over financial reporting based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management concluded that Company’s internal control over financial reporting was effective as of December 31, 2024.

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The following table sets forth the names and ages, as of the date of this prospectus, and titles of the individuals who will serve as our executive officers and members of our Board as of March 27, 2025:

President, Chief Executive Officer and Chairman of the Board

Gary Williams

Chief Accounting Officer and VP of Finance

Director (1)(3)

Nathaniel Bradley

President, Chief Executive Officer and Board member

Chief Financial Officer and Chairman of the Board

Kimberly Briskey

Director (2)(3)

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Executive Officers

Brett Moyer, Chief Executive Officer, President and Director and Chairman.

Nathaniel Bradley, Chief Executive Officer, Director.

Bradley, age 49, has served as Chief Executive Officer and sole member of the board of Data Vault since October 2018, and as Chief Executive Officer of Intellectual Property Network, Inc.

since January 2008.

Prior to joining Data Vault, Mr.

Bradley served as Chief Technology Officer of Parallax Health Sciences, Inc.

between 2018 and 2021.

Bradley holds no public company directorships other than with the Company and has only held the aforementioned position in the Company during the previous five years.

Bradley earned a bachelor’s degrees in business administration and marketing from the University of Phoenix.

The Company believes that Mr.

Bradley’s extensive experience as an inventor across diverse fields such as Internet broadcasting, mobile advertising, behavioral healthcare, blockchain, cybersecurity, AI, and data science gives him the qualifications and skills to serve as a director.

Brett Moyer, Chief Financial Officer and Chairman of the Board .

Brett Moyer is a founding member of the Company and has served as the President and Chief Executive Officer of the Company and as a member of its Board since August 2010.

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Moyer is qualified to serve on the Board because of his extensive experience as an executive with technology and electronic companies.

Gary Williams, Chief Accounting Officer and Vice President of Finance.

Gary Williams has served as Chief Accounting Officer since September 9, 2019 and as Vice President of Finance since the Company’s founding in August 2010.

Williams previously served as Secretary and Chief Financial Officer since the Company’s founding in August 2010 until September 9, 2019.

In addition, Mr.

Williams served as the Chief Financial Officer of Quantum3D, Inc., a training and simulation technology company, from November 2012 to September 2016.

Prior to joining the Company, Mr.

Williams served as secretary, vice president of finance and chief financial officer of Focus Enhancements Inc., a developer and marketer of proprietary video technology, from January 2001 to July 2010, when the videography and semiconductor businesses of the company were purchased by VITEC Multimedia, Inc.

and the Company, respectively.

Williams served as controller, vice president of finance, chief financial officer and secretary of Videonics Inc., a publicly traded company in the consumer electronics business, from February 1995 to January 2001, when Videonics merged with Focus Enhancements, Inc.

From July 1994 to January 1995, Mr.

Williams served as controller for Western Micro Technology, a publicly traded company in the electronics distribution business.

From January 1990 to June 1994, Mr.

Williams worked in public accounting for Coopers & Lybrand LLP.

Williams is a certified public accountant, inactive, and received a Bachelor’s Degree in Business Administration, with an emphasis in Accounting, from San Diego State University.

Lisa Cummins.

Lisa Cummins has been a member of the Board since June 2019.

Cummins currently serves as Chief Financial Officer for Ayar Labs, a venture backed startup that is developing an optical based “chiplet” to provide high speed, high density & low power to replace traditional electrical based input/output.

She joined Ayar Labs in January 2019 after overseeing a successful sale of Penguin Computing, a private equity backed company, to Smart Global Holdings in June 2018.

Prior to that, from May 2007 to October 2012, she served as Chief Financial Officer at Adept Technology, a Nasdaq publicly traded global robotics company, where she oversaw investor relations, led the Sarbanes-Oxley Act of 2002, as amended, compliance, completed multiple acquisitions, and secured bank and equity financing including a secondary public offering.

Cummins is a certified public accountant, inactive, earned a Business Economics degree from the University of California Santa Barbara and a Masters in Business Administration from St.

Mary’s College.

Kimberly Briskey, Director

Kimberly Briskey has been a member of the Board since June 2024.

Briskey currently serves as Brand CFO of Eddie Bauer at SPARC Group LLC, where she leads a finance and accounting team managing an $800M multichannel business.

She joined SPARC Group LLC in August 2020.

Previously, she served as Sr.

Director of DTC Finance and Company Planning at SPARC Group LLC.

She has expertise in financial planning, long-range budgeting, and operational oversight.

Her extensive experience includes senior roles at Lucky Brand, Beyond Yoga, J Brand, and GUESS?

INC., driving financial efficiencies and profitability across various retail and e-commerce channels.

Briskey holds a Bachelor of Science in Global Business and Marketing from Arizona State University and a Professional Designation in Product Development from the Fashion Institute of Design and Merchandising.

The Company believes that Ms.

Cummins is qualified to serve on the Board because of her over 25 years of experience as a growth-oriented financial executive in global high-tech organizations.

Briskey is qualified to serve on the Board because of her years of experience as a growth-oriented financial executive in global organizations.

Gilbert has been a member of the Board since April 2015.

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Involvement in Certain Legal Proceedings

In 2015, Quantum3D, Inc.

(“Quantum3D”), a company of which Mr.

Williams had been serving as chief financial officer, as a result of his prior experience in corporate restructuring, was placed into an assignment for the benefit of creditors.

Williams continued to serve as chief financial officer during Quantum3D’s restructuring and negotiated a sale in September 2016.

On July 9, 2021, the U.S.

District Court in the Southern District of New York entered a final judgment against Parallax Heath Sciences, Inc., Paul Arena and Nathaniel Bradley (collectively, the “Defendants”) pursuant to a civil lawsuit filed by the SEC against the Defendants (SDNY 1:21-cv-05812).

Bradley settled the civil lawsuit without admitting or denying any allegations.

Pursuant to the judgment, Mr.

Bradley was (a) permanently enjoined from violating Section 17(a)(3) of the Securities Act, (b) barred for a period of three years from engaging in certain activities involving “penny stocks” as defined in Rule 3a51-1 under the Exchange Act, and (c) required to pay a civil penalty of $40,000.

On October 29, 2019, DionyMed Brands Inc., a British Columbia company which Mr.

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Our directors hold office until the next Annual Meeting of Stockholders and until each of their respective successors are elected and qualified or until each of their earlier resignation or removal, or if for some other reason they are unable to serve in the capacity of director.

Our Board currently consists of eight (8) members:

Brett Moyer, Lisa Cummins, David Howitt, Dr.

Gilbert, Helge Kristensen, Sriram Peruvemba, Robert Tobias and Wendy Wilson.

Our Board currently consists of nine (9) members:

Nathaniel Bradley, Brett Moyer, David Howitt, Dr.

Gilbert, Helge Kristensen, Sriram Peruvemba, Robert Tobias, Wendy Wilson and Kimberly Briskey.

All of our directors will serve until our next annual meeting of stockholders and until their successors are duly elected and qualified or until their earlier resignation or removal.

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Our Board affirmatively determined that Dr.

Gilbert, Sriram Peruvemba, Lisa Cummins, Robert Tobias and Wendy Wilson are “independent directors,” as that term is defined in the Marketplace Rules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”).

Gilbert, Sriram Peruvemba, Kimberly Briskey, Robert Tobias and Wendy Wilson are “independent directors,” as that term is defined in the Marketplace Rules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”).

Under the corporate governance rules of Nasdaq, our Board must be composed of a majority of “independent directors.” Additionally, subject to certain limited exceptions, our audit, compensation, and nominating and corporate governance committees also must be composed of all independent directors.

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Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, our Board has determined that (a) the following members of our Board have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director:

Brett Moyer, Helge Kristensen and David Howitt, and (b) other than such directors, each of our directors is “independent” as that term is defined under the Nasdaq Rules.

Nathaniel Bradley, Brett Moyer, Helge Kristensen and David Howitt, and (b) other than such directors, each of our directors is “independent” as that term is defined under the Nasdaq Rules.

In making this determination, our Board considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our shares of common stock by each non-employee director.

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Gilbert and Mr.

Tobias satisfy the independence standards for the Board’s compensation committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes and (ii) Mr.

Gilbert and Ms.

Cummins satisfy the independence standards for the Board’s nominating and corporate governance committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes.

Tobias satisfy the independence standards for the Board’s compensation committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes and (iii) Mr.

Tobias and Dr.

Gilbert satisfy the independence standards for the Board’s nominating and corporate governance committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes.

Board Meetings and Attendance

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Annual Meeting Attendance

The Company held its 2023 Annual Meeting of Stockholders on January 30, 2024, after it was initially convened and adjourned on December 15, 2023.

The Company held its 2024 Annual Meeting of Stockholders on December 20, 2024.

Stockholder Communications with the Board

Stockholders wishing to communicate with the Board, the non-management directors, or with an individual Board member may do so by writing to the Board, to the non-management directors, or to the particular Board member, and mailing the correspondence to:

c/o Brett Moyer, Chief Executive Officer, WiSA Technologies, Inc., 15268 NW Greenbrier Pkwy, Beaverton, OR 97006.

c/o Nathaniel Bradley, Chief Executive Officer, Datavault AI Inc., 15268 NW Greenbrier Pkwy, Beaverton, OR 97006.

The envelope should indicate that it contains a stockholder communication.

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Our Board has an audit committee, a compensation committee and a nominating and corporate governance committee.

Each Board committee has a charter, which is available on our website at https://ir.wisatechnologies.com/corporate-governance/governance-documents .

Each Board committee has a charter, which is available on our website at https://ir.datavaultsite.com/corporate-governance/governance-documents .

Information contained on our website is not incorporated herein by reference.

1 unchanged sentence

As of March 27, 2025, the members of such committees are:

Audit Committee – Lisa Cummins*(1), Sriram Peruvemba and Wendy Wilson

Audit Committee – Kimberly Briskey*(1), Sriram Peruvemba and Wendy Wilson

Compensation Committee – Sriram Peruvemba*, Dr.

Gilbert and Robert Tobias

Nominating and Corporate Governance Committee – Robert Tobias*, Lisa Cummins and Dr.

Nominating and Corporate Governance Committee – Robert Tobias* and Dr.

* Indicates Committee Chair

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The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act.

The members of our Audit Committee are Lisa Cummins, Sriram Peruvemba and Wendy Wilson, each of whom are “independent” within the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq rules.

The members of our Audit Committee are Kimberly Briskey, Sriram Peruvemba and Wendy Wilson, each of whom are “independent” within the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq rules.

Our Board has determined that Ms.

Cummins shall serve as the “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

Briskey shall serve as the “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

In addition, Ms.

Cummins serves as Chairperson of our Audit Committee.

Briskey serves as Chairperson of our Audit Committee.

● The Audit Committee oversees our corporate accounting and financial reporting process and oversees the audit of our financial statements and the effectiveness of our internal control over financial reporting.

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● reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

Moyer, our Principal Executive Officer, President and Chairman of the Board, does not participate in the determination of his own compensation or the compensation of directors.

Bradley, our Principal Executive Officer, does not participate in the determination of his own compensation or the compensation of directors.

However, he makes recommendations to the Compensation Committee regarding the amount and form of the compensation of the other executive officers and key employees, and he often participates in the Compensation Committee’s deliberations about such persons’ compensation.

Oliva, formerly our Principal Financial Officer, assisted the Compensation Committee in its deliberations regarding executive officer, director and employee compensation, prior to his resignation as Principal Financial Officer on July 11, 2023.

No other executive officers participate in the determination of the amount or the form of the compensation of executive officers or directors.

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Nominating and Corporate Governance Committee

The members of our Boards nominating and corporate governance committee (“Nominating and Corporate Governance Committee”) are Robert Tobias, Dr.

Gilbert and Lisa Cummins, each of whom are “independent” within the meaning of the Nasdaq rules.

The members of our Board’s nominating and corporate governance committee (“Nominating and Corporate Governance Committee”) are Robert Tobias and Dr.

Gilbert, each of whom are “independent” within the meaning of the Nasdaq rules.

In addition, each member of our Nominating and Corporate Governance Committee qualifies as a “non-employee director” under Rule 16b-3 of the Exchange Act.

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There have been no material changes to the procedures by which security holders may recommend nominees to the Board.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons and entities who beneficially own more than ten percent (10%) of any class of the Company’s registered equity securities to file with the SEC the initial reports of ownership and reports of changes in ownership of common stock.

The Company’s officers, directors and greater than ten percent (10%) beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file.

Specific due dates for such reports have been established by the SEC, and the Company is required to disclose in this Report any failure to file reports by such dates during the fiscal year ended December 31, 2024.

During such fiscal year, we believe that all reports required to be filed by such persons pursuant to Section 16(a) of the Exchange Act were filed on a timely basis, with the exception of the reports listed in the table below:

Number of Late Reports

EOS Technology Holdings Inc..

EOS Technology Holdings Inc.’s Form 3 and Form 4 were not filed on a timely basis, due to technical delays in obtaining EDGAR codes.

Choi’s Form 3 was not filed on a timely basis, due to technical delays in obtaining EDGAR codes.

Nathaniel Bradley

Bradley’s Form 3 and Form 4 were not filed on a timely basis, due to technical delays in obtaining EDGAR codes.

Code of Business Conduct and Ethics

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We have also adopted a code of business conduct and ethics that applies to our directors.

Both codes of business conduct and ethics are available on our website at https://ir.wisatechnologies.com/governance-docs.

Both codes of business conduct and ethics are available on our website at https://ir.datavaultsite.com/corporate-governance/governance-documents.

The information contained in or accessible through the foregoing website is not incorporated herein by reference and is intended for informational purposes only.

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Executive Compensation.

The Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times.

We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates.

The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date).

During the year ended December 31, 2024, there were no equity grants made to our executive officers during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the Securities and Exchange Commission.

Summary Compensation Table for Fiscal Years 2024 and 2023

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Name and Principal Position

President and Chief Executive Officer

George Oliva (3)

Former Chief Financial Officer and Secretary

Nathaniel Bradley, Chief Executive Officer and Board member(2)

Brett Moyer, Chief Financial Officer and Chairman of the Board(3)

Gary Williams (4)

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(1) Amounts reported in this column do not reflect the amounts actually received by our named executive officers.

Instead, these amounts reflect the aggregate grant date fair value of each restricted stock award (“RSA”) and each RSU granted to the named executive officers during the fiscal years ended December 31, 2023 and 2022, as computed in accordance with Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718.

Instead, these amounts reflect the aggregate grant date fair value of each restricted stock award (“RSA”) and each RSU granted to the named executive officers during the fiscal years ended December 31, 2024 and 2023, as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718.

As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

(2) Cash bonus of $19,250 earned in 2021 and paid to Mr.

Moyer in 2022.

(3) On July 11, 2023, George Oliva resigned as the Principal Financial Officer of the Company and assumed the role of the Senior Vice President of Finance and Strategic Operations of the Company.

Oliva’s last day of employment with the Company was December 1, 2023.

Cash bonus of $13,750 earned in 2021 and paid to Mr.

Oliva in 2022.

Includes cash bonus of $12,500 earned in 2021 that was paid to Mr.

Williams in 2022.

(2) Nathaniel Bradley became the Chief Executive Officer and Board member on December 31, 2024 in connection with the DV Closing on December 31, 2024.

Bradley received no compensation in the year ended December 31, 2024.

(3) On December 31, 2024, Brett Moyer, formerly Chief Executive Officer of the Company, assumed the role of Chief Financial Officer.

Moyer’s change from Chief Executive Officer to Chief Financial Officer was in connection with the DV Closing on December 31, 2024, the Company and Mr.

Moyer entered into the Moyer Employment Amendment.

(4) Gary Williams, resigned from Chief Accounting Officer, VP of Finance on August 23, 2024.

Pursuant to his Severance Agreement executed on November 30, 2024, he received $151,925 in a severance payment on November 30, 2024 for extending his employment to this date.

Executive Employment Agreements and Arrangements

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Moyer agreed to continue to serve as our Chief Executive Officer and President and Mr.

Moyer’s initial annual base salary will be $404,250, which is subject to adjustment approved by the Board.

The Moyer Agreement has an unspecified term and Mr.

Moyer will serve in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Moyer Agreement.

Moyer’s initial annual base salary was $404,250, which was subject to adjustment approved by the Board.

The Moyer Agreement had an unspecified term and Mr.

Moyer served in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Moyer Agreement.

Pursuant to the Moyer Agreement, if Mr.

1 unchanged sentence

Moyer is also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is twelve (12) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Additionally, in the event of a Change in Control (as defined in each of the Moyer Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

Additionally, in the event of a Change in Control (as defined in the Moyer Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

Moyer is also entitled to be made whole for income, employment and excise taxes in the event that payments, benefits and distributions, including the effects of accelerated vesting of equity, would result in the application of the “golden parachute” excise tax under Internal Revenue Code Section 4999.

Effective August 24, 2022, the Company entered into an employment agreement with George Oliva (the “Oliva Agreement”).

Pursuant to the Oliva Agreement, Mr.

Oliva agreed to continue to serve as then Chief Financial Officer and Secretary of the Company, and Mr.

Oliva’s initial annual base salary was $288,750, which is subject to adjustment approved by the Board.

The Oliva Agreement has an unspecified term and Mr.

Oliva served in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Oliva Agreement.

Pursuant to the Oliva Agreement, if Mr.

Oliva was terminated without cause or resigned with good reason, he was entitled to receive twelve (12) months of salary.

Oliva was also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is twelve (12) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Additionally, in the event of a Change in Control (as defined in each of the Oliva Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six months after such termination and in no event after the expiration of such award.

Oliva was also entitled to be made whole for income, employment and excise taxes in the event that payments, benefits and distributions, including the effects of accelerated vesting of equity, would result in the application of the “golden parachute” excise tax under Internal Revenue Code Section 4999.

Effective July 11, 2023, George Oliva resigned as Principal Financial Officer of the Company and entered into a separation agreement with the Company (the “Separation Agreement”), whereby amongst other things, his only title would be Senior Vice President of Finance and Strategic Operations of the Company.

The Separation Agreement provided that Mr.

Oliva’s employment would last until and through December 20, 2023 or such other date as mutually agreed between the Company and Mr.

Oliva (the “Separation Date”).

In connection with the Separation Agreement, Mr.

Oliva was granted 30,000 RSAs on July 12, 2023 which are scheduled to fully vest on Mr.

Oliva’s Separation Date.

Additionally, as of the date of the Separation Agreement, Mr.

Oliva had a total of 1,499 unvested RSAs and RSUs.

The Company agreed to vest all of Mr.

Oliva’s unvested RSAs and RSUs as of the Separation Date.

The Separation Agreement also sets forth various terms regarding the treatment of other employee benefits that Mr.

Oliva was entitled to receive under the Company’s existing plans.

During the term of the Separation Agreement, Mr.

Oliva’s base annual salary remained unchanged.

As a material condition to the Separation Agreement, Mr.

Oliva executed a supplemental release, which included a customary release of claims by Mr.

Oliva (on behalf of himself, his heirs, executors, administrators and assigns) in favor of the Company.

Oliva’s last day of employment with the Company was December 1, 2023.

On December 31, 2024, Mr.

Moyer submitted his resignation as Chief Executive Officer of the Company, effective upon the DV Closing.

Moyer’s resignation was not due to any disagreement with the Company, and Mr.

Moyer is continuing his employment with the Company as the Chief Financial Officer in connection with the DV Closing, and remains a member of the Board.

On December 31, 2024, the Company and Mr.

Moyer entered into the Moyer Employment Amendment.

In his capacity as the Company’s Chief Financial Officer, pursuant to the Moyer Employer Amendment, Mr.

Moyer is receiving an initial base salary of $420,000 per year, with an opportunity to receive an annual bonus, made available to the Company’s senior management from time to time by the Board.

Pursuant to the Moyer Employment Amendment, the Company will pay to Mr.

Moyer a stay bonus of $400,000, payable in quarterly instalments during 2025.

The Moyer Amendment has an unspecified term and Mr.

Moyer serves in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Moyer Amendment.

Pursuant to the Moyer Amendment, if Mr.

Moyer is terminated without cause or resigns with good reason, he is entitled to receive twelve (12) months of salary.

Additionally, in the event of a Change in Control (as defined in the Moyer Amendment), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

Nathaniel Bradley

On December 31, 2024, pursuant to the DV Asset Purchase Agreement, the Board appointed Nathaniel Bradley as the Company’s new principal executive officer and a member of its Board, effective upon the DV Closing.

On December 31, 2024, the Company and Mr.

Bradley entered into an employment agreement, dated as of December 31, 2024 (the “Bradley Employment Agreement”).

In his capacity as the Company’s Chief Executive Officer, pursuant to the Bradley Employment Agreement, Mr.

Bradley is receiving an initial base salary of $450,000 per year, with an opportunity to receive an annual bonus, made available to the Company’s senior management from time to time by the Board.

The Bradley Employment Agreement has an unspecified term and Mr.

Bradley serves in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Bradley Employment Agreement.

Pursuant to the Bradley Employment Agreement, if Mr.

Bradley is terminated without cause or resigns with good reason, he is entitled to receive twelve (12) months of salary.

Bradley is also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is twelve (12) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Additionally, in the event of a Change in Control (as defined in the Bradley Employment Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

Nathaniel Bradley Inducement

On December 31, 2024, the Company and Mr.

Bradley entered into an inducement award agreement (the “Inducement Award Agreement”), pursuant to which Mr.

Bradley was granted 1,200,000 units of restricted stock of the Company (the “Units”) as an inducement material to Mr.

Bradley’s entering into employment with the Company.

The Units were approved by the Board and granted outside of the Company’s 2020 Stock Incentive Plan and 2018 Long-Term Stock Incentive Plan in accordance with Nasdaq Listing Rule 5635(c)(4).

The Inducement Award Agreement contemplates half of the Units vesting in equal 3-month installments over a 36-month period beginning March 20, 2025, and the other half of the Units vesting upon the Company’s aggregate revenue equaling or exceeding $40 million over any trailing 12 calendar month period ending on or prior to the date that is 5 years from the grant date.

Gary Williams

2 unchanged sentences

Williams agreed to continue to serve as Chief Accounting Officer and Vice President of Finance of the Company, and Mr.

Williams’ initial annual base salary will be $262,495, which is subject to adjustment approved by the Board.

The Williams Agreement has an unspecified term and Mr.

Williams will serve in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Williams Agreement.

Williams’ initial annual base salary was $262,495, which was subject to adjustment approved by the Board.

The Williams Agreement had an unspecified term and Mr.

Williams served in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Williams Agreement.

Pursuant to the Williams Agreement, if Mr.

Williams is terminated without cause or resigns with good reason, he is entitled to receive six (6) months of salary.

Williams is also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is six (6) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Williams would have been terminated without cause or resigned with good reason, he would have been entitled to receive six (6) months of salary.

Williams was also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance of six (6) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Additionally, in the event of a Change in Control (as defined in each of the Williams Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

On August 23, 2024, Mr.

Williams resigned, effective November 30, 2024 (the “Separation Date”).

Williams’ resignation was not because of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

In connection with his resignation, on August 23, 2024, Mr.

Williams and the Company entered into a Transition Agreement (the “Transition Agreement”), pursuant to which if he remained employed by the Company until and through the Separation Date and adequately fulfilled his duties and responsibilities to the Company, including providing training, information transfer and/or any other assistance reasonably requested by or on behalf of any person(s) hired and/or designated by the Company to assume any or all of his duties and responsibilities, Mr.

Williams was entitled to receive the following compensation and benefits:

(a) a one-time bonus in the gross amount of $151,925, which was to be paid on the Separation Date, less applicable taxes and withholdings, and (b) the full, accelerated vesting of any and all restricted stock awards he has been issued and have not vested, effective as of the Separation Date.

Other Compensation

Other than as described above, there were no post-employment compensation, pension or nonqualified deferred compensation benefits earned by our Named Executive Officers during the years ended December 31, 2023 and 2022.

Other than as described above, there was no post-employment compensation, pension or nonqualified deferred compensation benefits earned by our Named Executive Officers during the years ended December 31, 2024 and 2023.

We do not have any retirement, pension or profit-sharing programs for the benefit of our directors, officers or other employees.

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Unexercisable

George Oliva (6)

Nathaniel Bradley

Gary Williams

(1) Market value based upon the closing market price of $0.117 on December 29, 2023.

Moyer was granted 2,500 shares of restricted Common Stock on February 24, 2021, which vest in equal installments on the first, second and third anniversaries of March 15, 2021.

Moyer was granted 2,500 shares of restricted Common Stock on January 13, 2022, which vest as follows:

1/5th of the grant to vest on September 15, 2022, and the remaining 4/5th of the grant to vest quarterly in equal installments over the next 36 months on each December 15th, March 15th, June 15th and September 15th thereafter until September 15, 2025.

Moyer was granted 500 shares of restricted Common Stock on September 19, 2022, which vest in equal installments on the first, second and third anniversaries of September 19, 2022.

Moyer was granted 75,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

(6) Effective July 11, 2023, George Oliva resigned as Principal Financial Officer of the Company and entered into the Separation Agreement with the Company, whereby amongst other things, his only title would be Senior Vice President of Finance and Strategic Operations of the Company.

In connection with the Separation Agreement, Mr.

Oliva was granted 30,000 RSAs on July 12, 2023 which were fully vested on December 1, 2023.

Additionally, as of the date of the Separation Agreement, Mr.

Oliva had a total of 1,499 unvested RSAs and RSUs, which were fully vested on December 1, 2023, his last day of employment with the Company.

Williams was granted 200 shares of restricted Common Stock on February 24, 2021, which vest in equal installments on the first, second and third anniversaries of March 15, 2021.

Williams was granted 500 shares of restricted Common Stock on January 13, 2022, which vest as follows:

Williams was granted 52,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

2022 Management Team Retention Bonus Plan

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provided that, in any year no more than 8% of the Common Stock or derivative securitization with Common Stock underlying 8% of the Common Stock may be issued in any fiscal year.

Based on the total shares of Common Stock outstanding on January 1, 2024, up to 2,668,548 shares of Common Stock are available for participants under the LTIP.

The number of shares of Common Stock that are the subject of awards under the LTIP which are forfeited or terminated, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by an award are not issued to a participant or are exchanged for awards that do not involve shares will again immediately become available to be issued pursuant to awards granted under the LTIP.

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and (ii) permit immediately quarterly calculations based on the number of shares of Common Stock outstanding as of the first trading day of each fiscal quarter, rather than solely as of the first trading day of the fiscal year.

At a special meeting of our stockholders held on March 15, 2024, our stockholders approved certain amendments to the LTIP to increase the annual share limit of Common Stock that may be issued only for the 2024 fiscal year under the LTIP from 8% of the shares of Common Stock outstanding to 15% of the shares of Common Stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP).

At an annual meeting of our stockholders held on December 20, 2024, our stockholders approved an amendment to the LTIP to remove the annual share limit of Common Stock that may be issued for a certain fiscal year under the LTIP.

Pursuant to this amendment, the maximum number of shares of Common Stock that may be subject to equity awards is limited to 15% of the shares of Common Stock outstanding, which calculation is made using the number of shares of Common Stock outstanding as of the first trading day of each fiscal quarter.

2020 Stock Incentive Plan (the “2020 Plan”)

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The purpose of the 2020 Plan is to attract and retain senior managers, employees, directors, consultants, professionals and service providers who provide services to the Company, provided that such services are bona fide services that are not of a capital-raising nature during this period of unprecedented uncertainty and volatility in the COVID-19 environment and its impact on the value of the Company’s equity and grants.

As of December 31, 2023, no options or RSAs have been granted under the 2020 Plan while an aggregate , net of cancellations, of 6,285 RSUs have been issued under the 2020 Plan of which 67 remained unvested at December 31, 2023.

Technical Team Retention Plan of 2022 (the “2022 Plan”)

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Each RSU represents the right to receive one share of the Company’s common stock under the 2022 Plan.

As of December 31, 2023, no options or RSAs have been granted under the 2022 Plan while an aggregate, net of cancellations, of 3,450 RSUs have been issued under the 2022 Plan of which 2,531 remained unvested at December 31, 2023.

DIRECTOR COMPENSATION

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Robert Tobias

Kimberly Briskey

(1) Amounts reported in this column do not reflect the amounts actually received by our non-employee directors.

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As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

Cummins was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Gilbert was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Howitt was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Kristensen was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Peruvemba was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Tobias was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026

Wilson was granted 11,000 shares of restricted Common Stock on July 12, 2023, which vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026.

Gilbert was granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Howitt was granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Kristensen granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Peruvemba was granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Tobias was granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Wilson was granted 4,616 shares of restricted common stock on June 7, 2024, 7,541 on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on September 20, 2024, December 20, 2024, and March 15, 2025, respectively, every three (3) months thereafter until September 20, 2027, December 20, 2027 and March 15, 2028, respectively.

Briskey was granted 7,541 shares of restricted common stock on July 30, 2024 and 7,422 on November 12, 2024, which vest in equal installments, commencing on December 20, 2024 and March 15, 2025, respectively, every three (3) months thereafter until December 20, 2027 and March 15, 2028, respectively.

Cummins resigned effective June 12, 2024.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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The percentage ownership information shown in the table is based upon 60,956,524 shares of Common Stock outstanding as of March 12, 2025.

The percentage ownership information shown in the table excludes (i) 283,885,663 shares of Common Stock to be issued upon exercise of warrants (ii) pre-funded warrants to purchase up to 14,001,478 shares of Common Stock and (iii) 2,072 RSUs that have been issued but have not vested, in each case as of March 27, 2024.

The percentage ownership information shown in the table excludes (i) 13,534,334 shares of Common Stock to be issued upon exercise of warrants (ii) 1,200,014 restricted stock units (“RSUs”) that have been issued but have not vested and (iii) up to an aggregate of 2,813 shares of Common Stock issuable upon conversion of all outstanding shares of Series B Preferred Stock (as defined below) (which shares of Series B Preferred Stock assume the exercise of all 1,750 Series B Preferred Stock purchase warrants.

Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, including securities that are exercisable for or convertible into shares of Common Stock within sixty (60) days of March 12, 2025.

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The inclusion herein of any shares of Common Stock listed as beneficially owned does not constitute an admission of beneficial ownership.

Except as otherwise noted below, the address for persons listed in the table is c/o WiSA Technologies, Inc., 15268 NW Greenbrier Pkwy, Beaverton, OR 97006.

Except as otherwise noted below, the address for persons listed in the table is c/o Datavault AI Inc., 15268 NW Greenbrier Pkwy, Beaverton, OR 97006.

Common Stock Beneficially

Name and Address of Beneficial Owner (1):

5% or greater stockholders:

Joseph Reda (2)

Entities affiliated with Anson Investments Master Fund LP (3)

Directors and executive officers:

Brett Moyer, President, Chief Executive Officer and Chairman of the Board (4)

George Oliva, Former Chief Financial Officer and Secretary

Gary Williams, Chief Accounting Officer and Vice President of Finance (5)

Lisa Cummins, Director (6)

Directors and named executive officers:

Nathaniel Bradley, Chief Executive Officer and Board member(2)

Brett Moyer, Chief Financial Officer and Chairman of the Board

Gilbert, Director

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Wendy Wilson, Director

Kimberly Briskey, Director

Gary Williams (3)

All directors and exec.

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Holders of Common Stock are entitled to one (1) vote per share for each share of Common Stock held by them.

(2) Shares of Common Stock beneficially owned include 25,075,000 shares of common stock.

Shares of Common Stock beneficially owned exclude (i) up to 483,826 shares of Common Stock issuable upon exercise of outstanding pre-funded warrants issued in March 2024, (ii) up to 25,558,826 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in March 2024, (iii) up to 23,076,000 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in February 2024, (iv) up to 8,156,097 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in January 2024, and (v) up to 9,645,526 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in December 2023.

The principal business address of Mr.

Reda is 1 Wolfs Lane, Suite 316, Pelham, NY 10803.

(3) Shares of Common Stock beneficially owned (A) in the case of Anson Investments Master Fund LP, include 17,058,765 shares of common stock and exclude (i) up to 387,060 shares of Common Stock issuable upon exercise of outstanding pre-funded warrants issued in March 2024, (ii) up to 20,447,060 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in March 2024, (iii) up to 51,058,400 shares of Common Stock issuable upon exercise of outstanding common

stock purchase warrants issued in February 2024, (iv) up to 2,666,666 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in January 2024, and (v) up to 10,670,846 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in December 2023;

and (B) in the case of Anson East Master Fund LP, include 4,264,693 shares of common stock and exclude (i) up to 96,766 shares of Common Stock issuable upon exercise of outstanding pre-funded warrants issued in March 2024, (ii) up to 5,111,766 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in March 2024, (iii) up to 12,764,600 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in February 2024, (iv) up to 666,667 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in January 2024, and (v) up to 2,667,470 shares of Common Stock issuable upon exercise of outstanding common stock purchase warrants issued in December 2023.

Anson Advisors Inc and Anson Funds Management LP, the Co-Investment Advisers of Anson Investments Master Fund LP and Anson East Master Fund LP (collectively, “Anson”), hold voting and dispositive power over the securities held by Anson.

Tony Moore is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP.

Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc.

Kassam and Mr.

Nathoo each disclaim beneficial ownership of these securities, except to the extent of their pecuniary interest therein.

The principal business address of Anson is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.

(4) The number of shares of Common Stock beneficially owned includes (i) 998 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from March 15, 2024 to September 15, 2025, on each March 15th, June 15th, September 15th and December 15th, so long as Mr.

Moyer remains in the service of the Company on each such date;

(ii) 333 RSAs granted under the Company’s LTIP, which are scheduled to vest in equal installments on the second and third anniversaries of September 19, 2022, as long as Mr.

Moyer remains in service of the Company on each such anniversary;

and (iii) 62,475 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on May 15, 2024 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Moyer remains in the service of the Company on each such date.

(5) The number of shares of Common Stock beneficially owned includes (i) 198 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from March 15, 2024 to September 15, 2025, on each March 15th, June 15th, September 15th and December 15th, so long as Mr.

Williams remains in the service of the Company on each such date;

and (ii) 43,316 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on May 15, 2024 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Williams remains in the service of the Company on each such date.

(6) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Ms.

Cummins remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Ms.

Cummins remains in the service of the Company on each such date.

(7) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Dr.

Gilbert remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Dr.

Gilbert remains in the service of the Company on each such date.

(8) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Mr.

Howitt remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Howitt remains in the service of the Company on each such date.

(9) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Mr.

Kristensen remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Kristensen remains in the service of the Company on each such date.

(10) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Mr.

Peruvemba remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Peruvemba remains in the service of the Company on each such date.

(11) The number of shares of Common Stock beneficially owned includes (i) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Mr.

Tobias remains in the service of the Company on each such date;

and (ii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Mr.

Tobias remains in the service of the Company on each such date.

(12) The number of shares of Common Stock beneficially owned consists of (i) 33 RSAs granted under the LTIP, which vest on the third anniversaries of May 15, 2021, so long as Ms.

Wilson remains in the service of the Company on each such date;

(ii) 48 RSAs granted under the LTIP, which are scheduled to vest quarterly in equal installments for the period from September 15, 2023 to September 15, 2025, on each September 15th, December 15th, March 15th and June 15th, so long as Ms.

Wilson remains in the service of the Company on each such date;

and (iii) 9,163 RSAs granted under the 2018 LTIP, scheduled to vest in equal installments, commencing on November 15, 2023 and every six (6) months thereafter until May 15, 2026, so long as Ms.

Wilson remains in the service of the Company on each such date.

(13) See the information included in footnotes 2 through 12 above.

(2) Includes 3,446,456 shares of common stock held directly by Mr.

Bradley, 3,999,911 shares of common stock held directly by EOS Technology Holdings Inc.

(of which Mr.

Bradley is Chief Executive Officer and the sole director) and 2,775,954 shares of common stock held by Mr.

Bradley’s spouse.

Does not include the 1,200,000 Units from the Inducement Award Agreement, which contemplates half of the Units vesting in equal 3-month installments over a 36-month period beginning June 20, 2025, and the other half of the Units vesting subject to performance-based vesting conditions.

The shares of common stock are beneficially owned both directly and indirectly, as outlined above, by Mr.

Bradley, as an officer and member of the board of directors of Data Vault, has the power to dispose of and the power to vote the shares of common stock beneficially owned by Data Vault.

Bradley disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein, and the inclusion of these securities in this Report shall not be deemed an admission of beneficial ownership of such securities for purposes of Section 16 of the Exchange Act or for any other purposes.

(3) Gary Williams, former VP of Finance and Principle Financial Officer, who resigned from the role on November 30, 2024, held 16,085 shares of common stock of the Company as of the March 12, 2025.

(4) See the information included in footnotes 2 and 3 above.

Securities Authorized for Issuance under Equity Compensation Plans as of December 31, 2024

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Equity compensation plans not approved by security holders

(1) Represents an aggregate of 4,199,208 shares of Common Stock available for future issuance in connection with grants of securities under the LTIP, an aggregate of 215 shares of Common Stock available for future issuance in connection with grants of securities under the 2020 Plan and an aggregate of 1,550 shares of Common Stock available for future issuance in connection with grants of securities under the 2022 Plan.

(1) Represents an aggregate of 6,777,743 shares of Common Stock available for future issuance in connection with grants of securities under the LTIP, and an aggregate of 14 shares of Common Stock available for future issuance in connection with grants of securities under the 2022 Plan.

See “ Executive Compensation – Equity Incentive Plans .”

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The following is a description of transactions since January 1, 2022, to which we have been a participant in which the amount involved exceeded or will exceed the lesser of (i) $120,000 or (ii) 1% of the average of our total assets for the years ended December 31, 2023 and 2022, and in which any of our directors, executive officers or holders of more than 5% of our voting securities, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Compensation.”

Nathaniel Bradley and EOS Holdings

Nathaniel Bradley, the Chief Executive Officer (“CEO”) of ours, is a control person of EOS Holdings which became a related party of ours at the close of the DV Asset Acquisition on December 31, 2024.

In addition, Sonia Choi, our Chief Marketing Officer, is the spouse of our CEO and also the Chief Marketing Officer of EOS Holdings.

EOS Holdings received 40,000,000 shares of common stock in the DV Asset Acquisition which all but 3,999,911 shares of common stock were immediately distributed to various EOS Holdings shareholders at the close of the transaction.

Pursuant to the DV Asset Acquisition Agreement, on the closing date of the transaction, we issued a $10 million Convertible Note (the “DV Convertible Note”) to EOS Holdings, due on the third anniversary of closing, paying interest of 5.12% per annum.

The DV Convertible Note can be converted at DV Holding’s option partially or entirely, into shares of common stock, any time after the maturity date until the promissory note is fully paid off.

The DV Convertible Note uses a conversion price equaling to seventy-five percent (75%) of the average VWAP during the ten (10) consecutive trading days ending on the trading day that is immediately prior to the conversion date subject to a floor price of $1.116 per share (the “Conversion Price”).

At Data Vault’s sole discretion, upon a Change of Control, (i) we shall cause any successor entity to assume in writing all of the obligations of ours under the DV Convertible Note, (ii) pay or cause to be paid to EOS Holdings the Convertible Note Balance (as defined below) in cash, or (iii) pay, at the closing of such Change of Control, in full satisfaction of our obligations under the DV Convertible Note, an amount in cash or equivalent common stock to the amount EOS Holdings would have been paid if EOS Holdings converted its Convertible Note Balance into shares of common stock immediately prior to such closing, at the Conversion Price.

Pursuant to the DV Convertible Note, if EOS Holdings is considered an affiliate, we shall file within 30 days of the conversion date a registration statement on Form S-3 (or other appropriate form if we are not then S-3 eligible) providing for the resale by EOS Holdings of the shares of common stock issued under the DV Convertible Note.

We shall cause such registration statement to become effective within 60 days following the filing thereof and to keep such registration statement effective at all times as long as EOS Holdings owns any shares issued under the DV Convertible Note.

The parties agreed that we may apply up to 25% of the amount of any payment to be made to EOS Holdings pursuant to the DV Convertible Note towards satisfaction of the amount, if any, owed by EOS Holdings to us under those certain senior secured promissory notes, dated June 13, 2024, August 7, 2024, September 23, 2024, and December 23, 2024 (collectively, the “Secured Notes” and the outstanding amount under the Secured Notes, collectively, the “Data Vault Note Balance”).

The Note Balance on the maturity date will be automatically reduced by the amount of the Data Vault Note Balance.

Pursuant to the DV Convertible Note, if, at any time while the DV Convertible Note is outstanding, we enter into any capital raising or financing transaction, including without limitation any issuance by us of shares of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (each, a “Subsequent Financing”), then we shall first pay to EOS Holdings at least 10% of the gross proceeds of such Subsequent Financing to redeem all or a portion of the DV Convertible Note, plus accrued but unpaid interest, plus liquidated damages, if any, and any other amounts then owing to EOS Holdings.

If the aggregate gross proceeds of Subsequent Financings reach or exceed $50,000,000, then we shall repay the DV Convertible Note in full, including accrued but unpaid interest, liquidated damages, if any, and any other amounts, then owing to EOS Holdings.

The DV Convertible Note includes customary event of default provisions.

Upon the occurrence of an event of default, the DV Convertible Note and all amounts due thereunder shall become, upon demand by EOS Holdings, immediately due and payable in cash.

Additionally, upon the occurrence of an event of default, interest shall accrue daily at the rate of ten percent (10%) per annum on the aggregate outstanding principal balance and any other amounts then owing by us to EOS Holdings.

EOS Holdings owes $431,000 under the Data Vault Note Balance in notes receivable to us, as of December 31, 2024, a company for which Nate Bradley, our CEO, is a control person.

We recorded $7,000 in interest income on the Data Vault Note Balance.

In addition to the DV Convertible Note and the Data Vault Note Balance, on January 16, 2025, we entered into a Transition Services Agreement (“Transition Services Agreement”) to receive from EOS Holdings, employees to provide transition services in connection with the Acquired Assets for a period of up to three months.

For the period from January 16, 2025 through March 27, 2025, we have paid $428,000 to EOS Holdings.

Helge Kristensen

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Kristensen serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China, president of Platin Gate Aps, a company with focus on service-branding in lifestyle products as well as pro line products based in Denmark and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands.

For the fiscal years ended December 31, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $88,000 and $361,000, respectively, and made payments to the Company of approximately $254,000 and $191,000, respectively.

For the fiscal years ended December 31, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $128,000 and $1,891,000, respectively, and the Company made payments to Hansong Technology of approximately $1,223,000 and $1,831,000, respectively.

For the years ended December 31, 2024 and 2023, Hansong Technology purchased modules from the Company of approximately $58,000 and $88,000, respectively, and made payments to the Company of approximately $38,000 and $254,000 respectively.

At December 31, 2024 and 2023, Hansong Technology sold speaker products to the Company of approximately $28,000 and $128,000, respectively, and the Company made payments to Hansong Technology of approximately $235,000 and $1,223,000, respectively.

At December 31, 2024 and 2023, the Company owed Hansong Technology approximately $43,000 and $250,000, respectively.

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Outstanding Equity Grants to Directors and Executive Officers

We have granted warrants and restricted shares to our certain of our directors and executive officers.

We have granted warrants and restricted shares to certain of our directors and executive officers.

For more information regarding the warrants and stock awards granted to our directors and named executive officers, see “ Executive Compensation—Outstanding Equity Awards as of December 31, 2024 .”

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(1) Financial Statements:

The audited consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, the footnotes thereto, and the respective report of BPM LLP, an independent registered public accounting firm, are filed herewith.

The audited consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024 and 2023, the footnotes thereto, and the respective report of BPM LLP, an independent registered public accounting firm, are filed herewith.

(2) Financial Schedules:

24 unchanged sentences

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 14, 2018).

Form of Certificate of Designations of the Preferences, Rights and Limitations of the Series A 8% Senior Convertible Preferred Stock (incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2020).

Certificate of Amendment to Certificate of Incorporation of Summit Semiconductor, Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 8, 2020).

Description of Exhibits

Certificate of Amendment to Certificate of Incorporation of WiSA Technologies, Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 11, 2022).

Series A Elimination Certificate (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 31, 2022).

Description of Exhibits

Certificate of Amendment to Certificate of Incorporation of WiSA Technologies, Inc.

1 unchanged sentence

Certificate of Amendment to WiSA Technologies, Inc.’s Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on March 25, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2024).

Certificate of Amendment to WiSA Technologies, Inc.’s Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on April 12, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 12, 2024).

Certificate of Amendment to WiSA Technologies, Inc.’s Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on February 13, 2025 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2025).

Certificate of Designation of Preferences, Rights, and Limitations of Series B Convertible Preferred Stock (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023).

3 unchanged sentences

Form of Common Stock Certificate (incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2019).

Form of Common Stock Purchase Warrant issued to holder of Series A 8% Senior Convertible Preferred Stock (incorporated by reference to the Company’s Registration Statement on Form S-1 (File No.

333-230952) filed with the SEC on April 19, 2019).

Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Amendment No.

1 to Series F Common Stock Purchase Warrant (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Common Stock Purchase Warrant, dated February 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 3, 2020).

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

Form of Senior Secured Convertible Instrument, dated March 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2020).

Form of Common Stock Purchase Warrant, dated March 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2020).

Form of Placement Agent Warrant, dated March 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2020).

Form of Common Stock Purchase Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 5, 2020).

4 unchanged sentences

Form of Common Stock Purchase Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Description of Exhibits

Form of Common Stock Purchase Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 8, 2021).

5 unchanged sentences

333-265060) filed with the SEC on May 18, 2022).

Form of Senior Secured Convertible Note (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2022).

Form of Private Placement Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2022).

Form of Placement Agent Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2022).

Form of New Senior Secured Convertible Note (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2022).

Form of Senior Indenture (incorporated by reference to the Company’s Registration Statement on Form S-3 (File No.

333-267211) filed with the SEC on September 1, 2022).

Form of Subordinated Indenture (incorporated by reference to the Company’s Registration Statement on Form S-3 (File No.

333-267211) filed with the SEC on September 1, 2022).

Warrant Amendment Agreement, dated November 21, 2022, by and between the Company and Maxim Group LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 21, 2022).

Description of Exhibits

Form of Series A Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).

Form of Series B Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).

Form of Pre-Funded Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).

Form of Voting Agreement (incorporated by reference to Amendment No.

2 to the Company’s Registration Statement on Form S-1 (File No.

333-268085) filed with the SEC on November 29, 2022).

Form of Pre-Funded Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2023).

Form of Private Placement Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2023).

3 unchanged sentences

Form of Inducement Warrant for April Warrants (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 17, 2023).

Description of Exhibits

Form of Inducement Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 1, 2023).

Form of Warrant to Purchase Shares of Series B Convertible Preferred Stock (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023).

Form of Promissory Note (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2024).

Form of Common Stock Purchase Warrants (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 23, 2024).

1 unchanged sentence

Form of Common Stock Purchase Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 16, 2024).

Form of Pre-Funded Warrant (filed as an exhibit to Amendment No.

1 to the Registration Statement on Form S-1 (File No.

333-276631), filed with the SEC on February 5, 2024).

Form of Pre-Funded Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 15, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 17, 2024).

Form of Exchange Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 10, 2024).

Form of Inducement Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 10, 2024).

Description of Exhibits

Form of New Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 10, 2024).

Form of Inducement Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2024).

Form of Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 13, 2025).

Form of Placement Agent Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 13, 2025).

Form of Promissory Note (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 17, 2025).

Summit Semiconductor, Inc.

1 unchanged sentence

333-224267) filed with the SEC on July 2, 2018).

Form of Restricted Stock Agreement for Directors under the Summit Semiconductor, Inc.

2018 Long-Term Stock Incentive Plan (incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No.

333-224267) filed with the SEC on July 2, 2018).

Form of Restricted Stock Agreement for Employees under the Summit Semiconductor, Inc.

2018 Long-Term Stock Incentive Plan (incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No.

333-224267) filed with the SEC on July 2, 2018).

Form of Indemnity Agreement by and between Summit Semiconductor, Inc., and each of its directors and executive officers (incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No.

333-224267) filed with the SEC on July 2, 2018).

Form of Series G Warrant Amendment and Exercise Agreement by and between the Company and each of the Medalist Funds (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Warrant Amendment and Exercise Agreement by and between the Company and certain other holders of the Company’s common stock purchase warrants (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Warrant Settlement Agreement by and between the Company and certain holders of the Company’s common stock purchase warrants (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Warrant Settlement Agreement by and between the Company and the Medalist Funds (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2019).

Form of Securities Purchase Agreement, dated March 2020, by and between the Company and the investor (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2020).

Form of Settlement and Release Agreement, dated November 9, 2020, by and among the Company and each holder (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2020).

Lease Agreement by and between Portland 2 LLC and the Company, dated August 18, 2020 (incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2020).

Description of Exhibits

Summit Wireless Technologies, Inc.

1 unchanged sentence

First Amendment to Lease Agreement by and between Portland 2 LLC and the Company, dated May 23, 2023.

Solicitation Agreement, dated January 15, 2021, by and between the Company and Maxim Group LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 19, 2021).

Form of Inducement Agreement, dated January 19, 2021, by and between the Company and certain holders (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 20, 2021).

Form of Exchange Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 7, 2021).

Form of Inducement Agreement, dated as of June 7, 2021, by and between the Company and certain holders (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 8, 2021).

Solicitation Agreement, dated June 7, 2021, by and between the Company and Maxim Group LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 8, 2021).

Form of Securities Purchase Agreement by and between the Company and the Investor (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2022).

Form of Security Agreement by and between the Company and the Investor (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2022).

Executive Employment Agreement, effective as of August 24, 2022, by and between the Company and Brett Moyer (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2022).

Executive Employment Agreement, effective as of August 24, 2022, by and between the Company and George Oliva (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2022).

Executive Employment Agreement, effective as of August 24, 2022, by and between the Company and Gary Williams (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 26, 2022).

Executive Employment Agreement, effective as of December 31, 2024, by and between the Company and Brett Moyer (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2025).

Executive Employment Agreement, effective as of December 31, 2024, by and between the Company and Nathaniel Bradley (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2025).

WiSA Technologies, Inc.

Management Team Retention Bonus Plan, effective September 1, 2022 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2022).

Form of Securities Purchase Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).

Form of Warrant Agency Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).

Form of Waiver (incorporated by reference to Amendment No.

2 to the Company’s Registration Statement on Form S-1 (File No.

333-268085) with the SEC on November 29, 2022).

Form of Securities Purchase Agreement by and between the Company and the certain institutional investors dated January 31, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2023).

Termination Agreement by and between the Company and the Placement Agent dated as of January 30, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2023).

Form of Securities Purchase Agreement by and between the Company and certain institutional investors dated March 27, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 29, 2023).

Description of Exhibits

Form of Securities Purchase Agreement by and between the Company and certain institutional investors dated April 7, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 7, 2023).

Form of Side Letter by and between the Company and certain institutional investors dated April 7, 2023 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 7, 2023).

Description of Exhibits

24 unchanged sentences

and the signatories thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 26, 2024).

Description of Exhibits

Placement Agency Agreement, dated as of March 26, 2024, by and between WiSA Technologies, Inc.

1 unchanged sentence

Form of Securities Purchase Agreement by and among the Company and certain purchasers dated March 26, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated April 17, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024).

Placement Agency Agreement, dated as of April 17, 2024, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated April 19, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024).

Form of Warrant Amendment Agreement, by and between WiSA Technologies, Inc.

and the signatories thereto (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024).

Placement Agency Agreement, dated as of April 19, 2024, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated April 26, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2024).

Placement Agency Agreement, dated as of April 26, 2024, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 30, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated May 13, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 15, 2024).

Placement Agency Agreement, dated as of May 13, 2024, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 15, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated May 15, 2024 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 17, 2024).

Placement Agency Agreement, dated as of May 15, 2024, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 17, 2024).

Form of Asset Purchase Agreement, dated September 4, 2024, by and between the Company and EOS Technology Holdings Inc..

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 4, 2024).

Form of Amendment to Asset Purchase Agreement, dated November 14, 2024, by and between the Company and EOS Technology Holdings Inc..

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 15, 2024).

Form of Second Amendment to Asset Purchase Agreement, dated December 31, 2024, by and between the Company and EOS Technology Holdings Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 7, 2025).

Description of Exhibits

Form of Asset Purchase Agreement, dated December 19, 2024, by and between the Company and CompuSystems, Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 26, 2024).

Form of Amendment to Asset Purchase Agreement, dated December 30, 2024, by and between the Company and CompuSystems, Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 6, 2025).

Form of Second Amendment to Asset Purchase Agreement, dated February 25, 2025, by and between the Company and CompuSystems, Inc.

(incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 28, 2025).

Form of Inducement Agreement, dated September 10, 2024, by and between the Company and certain holders (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 10, 2024).

Form of Side Letter Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 10, 2024).

Form of Inducement Agreement, dated December 20, 2024, by and between the Company and certain holders (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2024).

Form of Securities Purchase Agreement, between the Company and certain purchasers dated February 13, 2025 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2025).

Placement Agency Agreement, dated as of February 13, 2025, by and between WiSA Technologies, Inc.

and Maxim Group LLC, as placement agent (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2025).

Form of Share Exchange Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 17, 2025).

Amendment to the Company’s 2018 Long-Term Stock Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on January 4, 2023).

3 unchanged sentences

333-239750) filed with the SEC on July 8, 2020).

Description of Exhibits

Consent of BPM LLP.

7 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Description of Exhibits

Compensation Recovery Policy.

9 unchanged sentences

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

Form 10-K Summary.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WiSA Technologies, Inc.

April 1, 2024

/s/ Brett Moyer

Datavault AI Inc.

March 31, 2025

/s/ Nathaniel Bradley

Nathaniel Bradley

Chief Executive Officer

1 unchanged sentence

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

April 1, 2024

March 31, 2025

/s/ Nathaniel Bradley

Nathaniel Bradley

Director and Chief Executive Officer (Principal Executive Officer)

March 31, 2025

/s/ Brett Moyer

Chief Executive Officer and Director (Principal Executive Officer)

April 1, 2024

/s/ Gary Williams

Gary Williams

Chief Accounting Officer (Principal Financial Officer and Accounting Officer)

April 1, 2024

/s/ Lisa Cummins

April 1, 2024

Director and Chief Financial Officer (Principal Financial Officer)

March 31, 2025

/s/ Stanley Mbugua

Stanley Mbugua

Chief Accounting Officer (Principal Accounting Officer)

March 31, 2025

/s/ Kimberly Briskey

Kimberly Briskey

March 31, 2025

/s/ David Howitt

April 1, 2024

March 31, 2025

/s/ Helge Kristensen

Helge Kristensen

April 1, 2024

March 31, 2025

/s/ Sriram Peruvemba

Sriram Peruvemba

April 1, 2024

March 31, 2025

/s/ Robert Tobias

Robert Tobias

April 1, 2024

March 31, 2025

/s/ Wendy Wilson

WISA Technologies, Inc.

(formerly Summit Wireless Technologies, Inc.) and Subsidiaries

DATAVAULT AI Inc.

(formerly WiSA Technologies, Inc.) and Subsidiaries

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

8 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

WiSA Technologies, Inc.

To the Board of Directors and Shareholders of

Datavault AI Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of WiSA Technologies, Inc.

(a Delaware Corporation) and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, convertible redeemable preferred stock and stockholders’ equity(deficit), and cash flows for each of the two years in the period ended December 31, 2023,and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Datavault AI Inc.

(formerly WiSA Technologies, Inc.) (a Delaware Corporation) and its subsidiaries (the “Company”), as of December 31, 2024 and 2023, and the related consolidated statements of operations, convertible redeemable preferred stock and stockholders’ equity(deficit), and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

2 unchanged sentences

As discussed in Note 2 to the consolidated financial statements, the Company’s recurring losses from operations, a net capital deficiency, available cash and cash used in operations raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

Management’s plans regarding these matters are also described in Note 2.

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

1 unchanged sentence

These consolidated financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

12 unchanged sentences

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair Value Measurement of Warrants and Series B Convertible Redeemable Preferred Stock

As described in Note 6 to the consolidated financial statements, during 2023 the Company issued warrants and Series B Redeemable Convertible Preferred Stock, respectively, pursuant to certain redemption, conversion and exercise terms (collectively, “warrants and redeemable convertible preferred stock”).

The Company also entered into inducement agreements with holders of Series B Convertible Redeemable Preferred Stock Warrants (the “Series B warrants”) in which the Company issued warrants to purchase common stock in exchange for the exercise of Series B warrants pursuant to certain exercise terms.

The accounting for the transactions required management to assess the accounting classification and valuation of the stock instruments.

We identified the fair value measurement of the warrant derivative liabilities and the redeemable convertible preferred stock as a critical audit matter.

Auditing management’s accounting for the warrants and redeemable convertible preferred stock was challenging as it required auditor judgement in assessing the accounting for estimation of the fair value of the warrants and redeemable convertible preferred stock, including the interpretation and application of the accounting literature to the transaction related to classification.

It also required professionals with specialized skills and knowledge to assess the methodology and key inputs used by the Company to estimate the fair value of the warrants and redeemable convertible preferred stock.

There is limited observable market data available for the warrants and redeemable convertible preferred stock, making each a complex financial instrument and, as such, the fair value measurement requires management to make complex judgements to identify and select the significant assumptions.

In addition, the fair value measurement of the warrants and redeemable convertible preferred stock requires the use of complex financial models.

As a result, obtaining sufficient appropriate audit evidence related to the fair value measurement requires significant auditor subjectivity.

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Asset Acquisition – Valuation of Intangible Assets

As described in Note 3 to the consolidated financial statements, on December 31, 2024, the Company completed its asset purchase of information technology assets, patents, and trademarks from Data Vault Holdings Inc.

for an aggregate purchase price of approximately $92 million.

The acquisition of the assets from Data Vault Holdings was complex due to significant estimates required by management to determine the fair value of the intangible assets.

The determination of the fair value of the intangible assets acquired required management to utilize the assistance of a third-party valuation specialist and to make significant estimates and assumptions including projected revenues, growth rates, economic lives, discount rates and financial projections.

We identified the valuation of intangible assets resulting from the asset acquisition as a critical audit matter given the especially challenging auditor judgment required in evaluating the inputs and assumptions used in determining fair value of the intangible assets.

Changes in significant assumptions could have a significant impact on the fair value of the intangible assets.

How We Addressed the Matter in Our Audit

Our audit procedures related to the fair value measurement of the warrants and redeemable convertible preferred stock included the following, among others:

● Testing the Company’s accounting treatment and disclosures related to the warrants and redeemable convertible preferred stock including reading the terms of the redeemable convertible preferred stock and warrant prospectuses, evaluating provisions related to contingent redemption features, and evaluating the Company’s application of technical accounting literature regarding classifying the redeemable convertible preferred stock as mezzanine equity and the warrants as liabilities.

● We obtained an understanding of the process of estimating the fair value of the instruments.

● With the assistance of our valuation specialists, we evaluated the reasonableness of the Company’s valuation methodology and significant assumptions by:

(1) comparing significant assumptions against available market data and historical amounts and (2) validating the mathematical accuracy of the models by developing an independent calculation and comparing to management’s concluded valuations.

Our audit procedures related to the accounting for valuation of intangible assets acquired to address this critical audit matter included the following:

● We utilized our valuation specialist to assist in evaluating the appropriateness of the Company’s valuation models developed for acquired intangible assets and evaluating the reasonableness of the significant assumptions used including the projected revenues, growth rates, economic life and discount rate as compared to industry and market data.

We also examined the completeness and accuracy of the underlying data supporting the significant assumptions and estimates used in the third-party valuation report, including historical and projected financial information.

● We tested the Company’s accounting treatment and disclosures regarding the asset acquisition including reading the terms of the asset acquisition related agreements and evaluating the Company’s application of technical accounting literature regarding initial recognition of the intangible assets acquired and the direct transaction costs incurred.

We have served as the Company’s auditor since 2016.

San Jose, California

April 1, 2024

WISA TECHNOLOGIES, INC.

March 31, 2025

DATAVAULT AI INC.

CONSOLIDATED BALANCE SHEETS

8 unchanged sentences

Property and equipment, net

Intangible assets

Deposit for business combination

Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity/ (Deficit)

3 unchanged sentences

Total current liabilities

Convertible note payable

Convertible note payable, net, related party

Warrant liabilities

Derivative liability

Other liabilities

2 unchanged sentences

Series B Convertible Redeemable Preferred Stock, par value $ 0.0001 ;

375,000 shares authorized as of December 31, 2023;

38,335 shares issued and outstanding as of December 31, 2023 ( none as of December 31, 2022);

mandatorily redeemable on October 15, 2025 for $ 3,833,500

375,000 shares authorized;

0 and 38,335 shares issued and outstanding as of December 31, 2024 and 2023 , respectively and 2023

Stockholders’ Equity/(Deficit):

6 unchanged sentences

Total liabilities, convertible preferred stock and stockholders’ equity/(deficit)

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023, as discussed in Note 1.

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023 as well as a 1-for-150 reverse stock split effected in April 2024, as discussed in Note 1.

The accompanying notes are an integral part of these consolidated financial statements.

WISA TECHNOLOGIES, INC.

DATAVAULT AI INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

12 unchanged sentences

Change in fair value of warrant liability

Change in fair value of derivative liability

Loss on debt extinguishment

2 unchanged sentences

Provision for income taxes

Deemed dividend on conversion of convertible preferred for common stock

Deemed dividend on conversion of Series B preferred for common stock and repurchase of Series B preferred stock

Deemed dividend on issuance of common stock and warrants issued in connection with amendments to warrants to purchase common stock

Net loss attributable to common stockholders

1 unchanged sentence

Weighted average number of common shares used in computing net loss per common share

Share and per share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023, as discussed in Note 1.

The accompanying notes are an integral part of these consolidated financial statements.

WISA TECHNOLOGIES, INC.

DATAVAULT AI INC.

CONSOLIDATED STATEMENTS OF CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

7 unchanged sentences

Balance as of December 31, 2022

ASC 842 adoption adjustment

Stock-based compensation

Release of vested restricted common stock

Restricted stock awards cancelled

Issuance of warrants in connection with convertible promissory note

Issuance of common stock and warrants, net of offering costs

Issuance of warrants in connection with December 2022 offering

Balance as of December 31, 2022

Stock-based compensation

Restricted stock awards cancelled

Release of vested restricted common stock

5 unchanged sentences

Issuance of common stock in connection with conversion of Series B preferred stock

Deemed dividend on conversion of convertible preferred for common stock

Deemed dividend in connection with conversion of Series B preferred stock to common stock

Repurchase of common stock warrants

Amortization and accretion of discounts relating to Series B preferred stock

Deemed dividend in connection with amortization and accretion of discounts relating to Series B preferred stock

Discount from issuance of common stock warrants in connection with Series B preferred stock inducement

Balance as of December 31, 2023

Share amounts have been retroactively adjusted to reflect the impact of a 1-for-100 reverse stock split effected in January 2023, as discussed in Note 1.

Stock-based compensation

Restricted stock awards cancelled

Issuance of common stock in connection with warrant amendment

Issuance of common stock in connection with warrant exercise

Issuance of common stock and warrants, net of offering costs

Issuance of Series B preferred stock in connection with warrant exercise, net of discounts

Issuance of common stock in connection with conversion of Series B preferred stock

Deemed dividend on conversion of Series B preferred for common stock and repurchase of Series B preferred stock

Repurchase of Series B preferred stock and Series B preferred stock warrants

Issuance of common stock, pre-funded units and warrants, net of offering costs

Issuance of common stock in connection with reverse split rounding-up for fractional shares

Issuance of common stock to vendors

Issuance of common stock in connection with the acquisition of intangible assets

Conversion of liability warrants to equity warrants

Warrants classified to liability

Cumulative effect of ASU 2020-06 adoption

Balance as of December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

WISA TECHNOLOGIES, INC.

DATAVAULT AI INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Amortization of debt discounts

Change in fair value of derivative liability

Change in fair value of warrant liability

8 unchanged sentences

Cash flows from investing activities:

Issuance of note receivable

Deposit for business combination

Purchases of property and equipment

Purchases of intangible assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock in connection with warrant exercise, net of offering costs

Proceeds from issuance of common stock and warrants, net of offering costs

Proceeds from issuance of short-term loan, net of issuance costs

Proceeds from issuance of common stock in connection with warrant exercise

Proceeds from issuance of Series B preferred stock, net of issuance costs

Proceeds from issuance of convertible note payable, net of issuance costs

Proceeds from exercise of warrants

Repurchase of common stock warrants

Repurchase of Series B preferred stock

Repayment of finance lease

9 unchanged sentences

Noncash Investing and Financing Activities:

Reclassification of liability warrants to equity warrants

Issuance of warrant liability in connection with financing

Deemed dividend on conversion of Series B preferred stock and repurchase of Series B preferred stock

Derecognition of Series B preferred stock liability warrants

Issuance of stock-based compensation to vendors

Warrant exercise in connection with loan settlement

Issuance of common stock in connection with Series B preferred stock

Unpaid financings issuance costs

Issuance of common stock and convertible note payable in connection with the acquisition of intangible assets

Unpaid intangible assets acquisition costs

Cashless exercise of warrants

Reclassification of equity warrants to liability warrants

Cumulative effect of adoption of ASU 2020-06

Issuance of common stock in connection with conversion of Series B preferred stock

Deemed dividend on conversion of convertible preferred for common stock

Deemed dividend from accretion, amortization, and conversion of Series B preferred stock discounts

Issuance of warrants in connection with February 2023 offering

3 unchanged sentences

Accrual of legal fees for the short-term loan

Issuance of warrants in connection with December 2022 offering

Issuance of warrants in connection with convertible note payable

Derivative liability recorded in connection with issuance of convertible note payable

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies

WiSA Technologies, Inc., formerly known as Summit Wireless Technologies, Inc.

Datavault AI Inc, formerly known as WiSA Technologies, Inc., and before then Summit Wireless Technologies, Inc.

(together with its subsidiaries also referred to herein as “we”, “us”, “our”, or the “Company”), was originally formed as a limited liability company in Delaware on July 23, 2010.

Our business is to deliver the best-in-class immersive wireless sound technology for intelligent devices and next generation home entertainment systems through the sale of module components to audio companies as well as audio products to resellers and consumers.

The Company’s business is to deliver the best-in-class data management and monetization, as well as using wireless audio to transmit data and audio for consumer use.

Datavault stands at the forefront of innovation, delivering cutting-edge Web 3.0 data management and high-performance computing (HPC) solutions to a global audience.

NASDAQ Notifications

On October 5, 2023, we received a written notification from Nasdaq notifying the Company that it was not in compliance with the Minimum Bid Price Requirement, because the closing bid price of the Company’s common stock was below $ 1.00 per share for the previous thirty (30) consecutive business days.

The notification has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq Capital Market under the ticker “WISA.” Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until April 2, 2024 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement.

If at any time during the Compliance Period, the bid price of the Common Stock closes at or above $ 1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed.

On November 17, 2023, we received a letter from the Staff notifying us that we were not in compliance with the Stockholders’ Equity Requirement.

We reported stockholders’ equity (deficit) of $ 885,000 in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and, as a result, we did not satisfy the Stockholders’ Equity Requirement pursuant to Listing Rule 5550(b)(1).

Pursuant to the letter, we were required to submit to Nasdaq a plan to regain compliance with the Stockholders’ Equity Requirement by January 2, 2024.

We submitted to Nasdaq a plan to regain and demonstrate long-term Nasdaq Listing Qualifications compliance on January 2, 2024.

On February 14, 2024, the Company received notice (the “February 14 Letter”) from the Staff that the Staff had determined that as of February 14, 2024, the Company was in violation of the Low Priced Stocks Rule.

As a result, the Staff determined to delist the Company’s securities from Nasdaq, unless the Company timely requests an appeal of the Staff’s determination to the Panel, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

The Company had requested a hearing before the Panel to appeal the February 14 Letter and to address all outstanding matters, including compliance with the Minimum Bid Price Requirement, the Low Priced Stocks Rule and the Stockholders’ Equity Requirement, which hearing was held on March 28, 2024;

however, as of the date of this Report, the Panel has not yet rendered a decision.

While the appeal process is pending, the suspension of trading of the Common Stock, will be stayed and the Common Stock will continue to trade on the Nasdaq Capital Market until the hearing process concludes and the Panel issues a written decision.

There are no assurances that an extension will be granted or that a favorable decision will be obtained from the Panel.

Reverse Stock Split

On January 24, 2023, the Board approved a 1-for -100 reverse stock split (the “Reverse Stock Split”) of our outstanding shares of common stock and authorized the filing of a certificate of amendment to our certificate of incorporation, as amended, with the Secretary of State of the State of Delaware (the “Certificate of Amendment”) to affect the Reverse Stock Split.

On January 26, 2023, the Reverse Stock Split was effected and the consolidated financial statements have been retroactively adjusted.

All common stock share numbers, warrants to purchase common stock, prices and exercise prices have been retroactively adjusted to reflect the Reverse Stock Split.

The common stock began trading on a split-adjusted basis at the start of trading on January 27, 2023.

Unless otherwise indicated, the information presented in this Quarterly Report on Form 10-K for the twelve months ended December 31, 2023 (the “Report”) gives effect to the Reverse Stock Split.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

On July 3, 2024, the Company received a letter from the Office of General Counsel of The Nasdaq Stock Market LLC (“Nasdaq”) confirming that the Company has regained compliance with the equity requirement under Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”) as required by the Nasdaq Hearing Panel’s (the “Panel”) decision dated April 5, 2024.

The Panel has determined to impose a monitoring period (the “Monitor Period”), pursuant to Nasdaq Listing Rule 5815(d)(4)(B).

If, during the Monitor Period, which lasts until July 3, 2025, the Nasdaq Listing Qualifications staff (“Staff”) finds the Company again out of compliance with the Equity Rule, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to such deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to such deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3).

Instead, Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable.

The Company will have the opportunity to respond and present to the Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C).

The Company’s securities may at that time be delisted from Nasdaq.

On April 29, 2024, Nasdaq notified the Company in a letter that the Company has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550 (a)(2) (the “Minimum Bid Price Requirement”) as required by a hearing panel’s decision on April 5, 2024.

The Company is subject to monitoring for a period of one year from the date of the letter.

If, within that one-year monitoring period, Nasdaq’s Listing Qualifications staff (the “Staff”) finds the Company again out of compliance with the Minimum Bid Price Requirement, the Company will not be permitted to provide the Staff with a plan of compliance with respect to such deficiency and the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to such deficiency, nor will the Company be afforded an applicable cure or compliance period.

Instead, the Staff will issue a delist determination letter and the Company will have an opportunity to request a new hearing with a hearings panel.

The Company will have the opportunity to respond and present to the panel.

Reverse Stock Splits

April 2024 Reverse Stock Split

On April 4, 2024, the Board approved a 1-for-150 reverse stock split (the “April 2024 Reverse Stock Split”) of our outstanding shares of common stock and authorized the filing of a certificate of amendment to our certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect the April 2024 Reverse Stock Split.

On April 12, 2024, the April 2024 Reverse Stock Split was effected and the consolidated financial statements have been retroactively adjusted.

All common stock share numbers, warrants to purchase common stock, prices and exercise prices have been retroactively adjusted to reflect the April 2024 Reverse Stock Split.

The common stock began trading on a split-adjusted basis at the start of trading on April 15, 2024.

Unless otherwise indicated, the information presented in this Report gives effect to the April 2024 Reverse Stock Split.

Business and Summary of Significant Accounting Policies, continued

January 2023 Reverse Stock Split

On January 24, 2023, the Board approved a 1-for-100 reverse stock split (the “January 2023 Reverse Stock Split”) of our outstanding shares of common stock and authorized the filing of a certificate of amendment to our certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect the January 2023 Reverse Stock Split.

On January 26, 2023, the January 2023 Reverse Stock Split was effected and the consolidated financial statements have been retroactively adjusted.

All common stock share numbers, warrants to purchase common stock, prices and exercise prices have been retroactively adjusted to reflect the January 2023 Reverse Stock Split.

The common stock began trading on a split-adjusted basis at the start of trading on January 27, 2023.

Unless otherwise indicated, the information presented in this Report gives effect to the January 2023 Reverse Stock Split.

Basis of Presentation

1 unchanged sentence

GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented.

The consolidated financial statements reflect the accounts of WISA Technologies, Inc.

and its wholly-owned subsidiaries, WISA Technologies Korea, LTD, a Korean limited company, which was established in September 2022, and WiSA, LLC, a Delaware limited liability company.

The consolidated financial statements reflect the accounts of Datavault AI, Inc and its wholly-owned subsidiaries, WISA Technologies Korea, LTD, a Korean limited company, which was established in September 2022, and WiSA, LLC, a Delaware limited liability company.

All intercompany balances and transactions are eliminated.

5 unchanged sentences

Certain reclassifications have been made to prior periods’ consolidated financial statements to conform to the current period presentation.

These reclassifications did not result in any change in previously reported net loss, total assets or stockholders’ equity.

These reclassifications did not result in any change in previously reported net loss, total assets or stockholders’ equity (deficit).

Concentration of Credit Risk and Other Risks and Uncertainties

6 unchanged sentences

As of December 31, 2024 and December 31, 2023, there was no allowance for credit losses.

As of December 31, 2023, the Company had two customers accounting for 71 % and 20 % of accounts receivable.

As of December 31, 2024, the Company had three customers accounting for 68 %, 12 % and 11 % of accounts receivable.

As of December 31, 2023, the Company had two customers accounting for 71 % and 20 % of accounts receivable.

1 unchanged sentence

The Company had four customers accounting for 25 %, 19 %, 14 % and 13 % of its net revenue for the year ended December 31, 2023.

Business and Summary of Significant Accounting Policies, continued

The Company’s future results of operations involve a number of risks and uncertainties.

5 unchanged sentences

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Accounts Receivable and Allowance for Credit Losses

6 unchanged sentences

The carrying value of the Company’s borrowings and capital lease liabilities approximates fair value based upon borrowing rates currently available to the Company for loans and capital leases with similar terms.

The Company’s Warrant liability and Derivative liability are the only financial instruments that are adjusted to fair value on a recurring basis.

The Company’s Convertible note payable and Warrant liability is the only financial instruments that are adjusted to fair value on a recurring basis.

Inventories, principally purchased components, are stated at the lower of cost or net realizable value.

7 unchanged sentences

As of December 31, 2024 and 2023, the Company had capitalized $ 0 and $ 0 , respectively, of deferred offering costs in prepaid expenses and other current assets on the consolidated balance sheet.

Business and Summary of Significant Accounting Policies, continued

Property and Equipment, Net

8 unchanged sentences

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

When the Company has determined that the embedded conversion options and warrants should be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

1 unchanged sentence

Warrants for Common Shares, Convertible Redeemable Preferred Shares, and Derivative Financial Instruments

Warrants for our shares of common shares, convertible redeemable preferred shares, and derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement).

Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) that contain reset provisions that do not qualify for the scope exception are classified as equity or liabilities.

Warrants for common shares, convertible redeemable preferred shares, and derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement).

Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) contain reset provisions that do not qualify for the scope exception are classified as equity or liabilities.

The Company assesses classification of its warrants for shares of common stock and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

3 unchanged sentences

The Company will continue to assess if there should be a warranty accrual going forward.

Business and Summary of Significant Accounting Policies, continued

Revenue Recognition

The Company generates revenue primarily from two product categories which include the sale of Consumer Audio Products as well as the sale of Components.

The Company historically generates revenue primarily from two product categories which include the sale of Consumer Audio Products as well as the sale of Components.

The Company applies the following five steps:

5 unchanged sentences

Our revenue arrangements do not contain significant financing components.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Sales to certain distributors are made under arrangements which provide the distributors with price adjustments, price protection, stock rotation and other allowances under certain circumstances.

14 unchanged sentences

Accounts receivables are recorded when the right to this consideration becomes unconditional.

The Company does not have any material contract assets as of December 31, 2023 and 2022.

The Company has $ 109,000 and an immaterial amount of contract assets as of December 31, 2024 and 2023, respectively, which are recorded in Prepaids and other current assets on the consolidated balance sheets.

The Company expects to collect 100 % of the contract assets as of December 31, 2024 in the next twelve months.

During the year ended December 31, 2024, the Company recognized $ 19,000 of revenue that was included in the contract liabilities balance as of December 31, 2023.

(in thousands)

Contract Liabilities

Business and Summary of Significant Accounting Policies, continued

Revenue by Geographic Area

7 unchanged sentences

In addition, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Stock-Based Compensation

6 unchanged sentences

Research and Development

Research and development costs are charged to operations as incurred and includes salaries, consulting expenses and an allocation of facility costs.

Research and development costs are charged to operations as incurred and include salaries, consulting expenses and an allocation of facility costs.

Advertising Costs

5 unchanged sentences

For the years ended December 31, 2024 and 2023, the Company’s comprehensive loss is the same as its net loss.

Business and Summary of Significant Accounting Policies, continued

Foreign Currency

11 unchanged sentences

Under the two-class method, net income would be attributed to common stockholders and participating securities based on their participation rights.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities.

2 unchanged sentences

Net loss is adjusted for any deemed dividends to preferred stockholders to compute income available to common stockholders.

For the year ended December 31, 2023, warrants to purchase 29,116,878 shares of common stock, 807,282 shares of restricted stock, 2,514 shares of restricted stock issued under an inducement grant, 2,598 shares underlying restricted stock units and 38,335 shares of Series B preferred stock, have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

For the year ended December 31, 2024, warrants to purchase 13,534,334 shares of common stock, 1,027,367 shares of restricted stock, 64,183 shares of restricted stock issued under an inducement grant, 14 shares underlying restricted stock units, have been excluded from the calculation of net loss per common share because the inclusion would be antidilutive.

Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences.

9 unchanged sentences

During the years ended December 31, 2024 and 2023, the Company recognized no interest and penalties.

Recently Adopted Accounting Pronouncements

In June 2016, Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, as amended, which requires the early recognition of credit losses on financing receivables and other financial assets in scope.

ASU 2016-13 requires the use of a transition model that will result in the earlier recognition of allowances for losses.

The new standard is effective for fiscal years beginning after December 15, 2022.

The Company adopted this standard on January 1, 2023, and the adoption did not have any impact on the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Business and Summary of Significant Accounting Policies, continued

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” This ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S.

The Company adopted this standard on January 1, 2024 using the modified retrospective method by applying the ASU to financial instruments outstanding as of January 1, 2024, with the cumulative effect of adoption recognized at that date through an adjustment to the opening balance of retained earnings.

As such, the Company adopted the standard by eliminating any unamortized discount to the Series B Preferred Stock for the beneficial conversion feature.

The cumulative effect of ASU 2020-06 adoption adjusted against additional paid-in-capital due to the absence of retained earnings on January 1, 2024 amounted to $ 116,000 .

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” aiming to enhance the transparency and relevance of segment information provided in financial statements.

The amendments in this Update require that a public entity disclose significant segment expenses, profit or loss and assets, etc.

for each reportable segment, on an annual and interim basis.

The Update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted as of the year ended December 31, 2024 with an immaterial impact on the consolidated financial statements.

Recently Issued and Not Yet Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06 “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting Standards Update 2024-04 Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments:

The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of the annual reporting period for all entities that have adopted the amendments in Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

This ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception.

The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas.

The Company will adopt this standard on January 1, 2024.

The Company is currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

Accounting Standards Update 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses:

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The interim effective date was amended by Update 2025-01 “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

Clarifying the Effective Date ” (“ASU 2025-01”), clarifying the interim reporting date when an entity must adopt ASU 2024-03.

According to ASU 2025-01, ASU 2024-03 is effective for interim periods within fiscal years beginning after December 15, 2027.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 – Income Taxes (Topic 740):

2 unchanged sentences

The Update is effective for public business entities for annual periods beginning after December 15, 2024, on a prospective basis.

The Company is currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the consolidated financial statements as a result of future adoption.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Going Concern

13 unchanged sentences

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Asset Purchase

On December 31, 2024 (the “DV Closing Date”), the Company completed its asset purchase of information technology assets, certain patents and trademarks (collectively, the “Acquired Assets”) from EOS Technology Holdings Inc.

(“EOS Holdings”).

At the closing (the “DV Closing”), pursuant to the asset purchase agreement, by and between the Company and EOS Holdings, dated as of September 4, 2024, and as amended on November 14, 2024, and as further amended from time to time (the “Asset Purchase Agreement”), the Company acquired the Acquired Assets for an aggregate purchase price of $ 92,000,000 consisting of (i) $ 10,000,000 paid in the form of a promissory note issued by the Company to EOS Holdings (the “DV Convertible Note”), (ii) 40,000,000 shares (the “Closing Stock Consideration”) of validly issued, fully paid and nonassessable shares of restricted common stock of the Company, par value $ 0.0001 per share with an aggregate fair value of $ 82,000,000 based on the closing stock price of the Company on December 31, 2024.

EOS Holdings is considered a related party as of the DV Closing.

See Note 11 Related Parties for further details.

Second Asset Purchase Agreement Amendment

In connection with but prior to the DV Closing, on December 31, 2024, the Company and Data Vault entered into a second amendment to the Asset Purchase Agreement (the “Second Asset Purchase Agreement Amendment”).

Pursuant to the Second Asset Purchase Agreement Amendment, among other things, the parties agreed to enter into an earnout agreement (the “Earnout Agreement”) instead of a royalty agreement as set forth in the Asset Purchase Agreement, and the parties agreed that EOS Holdings will only appoint one director at the DV Closing to the board of directors of the Company (the “Board”), and EOS Holdings will have the right to appoint one other director within ninety ( 90 ) days after the DV Closing.

The parties also agreed that EOS Holdings will transfer at least eighty-one percent ( 81 %) of the Closing Stock Consideration to its stockholders, and neither EOS Holdings nor any of its stockholders will own in excess of 19.99 % of the number of shares of the common stock outstanding immediately after giving effect to the issuance of the Closing Stock Consideration.

Pursuant to the Second Asset Purchase Agreement Amendment, EOS Holdings agreed to file a Certificate of Amendment with the Secretary of State of the State of Delaware to change its company name, and the Company agreed to file a registration statement providing for the resale by EOS Holdings of the 3,999,911 shares of common stock issued as part of the Closing Stock Consideration.

The Company is required to cause such registration statement to become effective by April 15, 2025.

The Company and EOS Holdings further agreed that the Company may only amend, supplement or otherwise modify the transaction documents with approval of the disinterested members of the Board.

The parties also updated the schedules describing the transferred assets and transferred liabilities.

Asset Purchase, continued

Earnout Agreement

In connection with the DV Closing, the Company and EOS Holdings entered into the Earnout Agreement, dated as of December 31, 2024, pursuant to which the Company shall pay an amount equal to three percent ( 3 %) of the gross revenue of the Company generated from or otherwise attributable to any patents and patent applications included in the Acquired Assets, subject to customary deductions calculated in accordance with U.S.

GAAP, and as further set forth in the Earnout Agreement.

The earnout period commenced on the DV Closing Date and will end upon the expiration of the last to expire of the patents included in the Acquired Assets (the “Term”).

The Company shall make the earnout payments to EOS Holdings on a quarterly basis during the Term.

The Earnout Agreement includes customary covenants regarding how the Company can operate its business during the term of the Earnout Agreement.

The Earnout Agreement was not assigned a fair value at the purchase date as it was not deemed likely that any payments will be made as of December 31, 2024.

The Company accounted for the Asset Purchase Agreement as an asset purchase in accordance with ASC 805, Business Combinations (the “Screen Test”).

As such, the aggregate consideration of $ 92,000,000 plus capitalized fees of $ 575,000 were recorded to the intangible assets acquired of patents and trademarks for $ 2,384,000 and $ 90,191,000 , respectively, with useful weighted average remaining lives of ten years in each case .

The following set forth future amortization expense related to intangible assets as of December 31, 2024:

December 31, 2024

Total future amortization

Balance Sheet Components

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Machinery and equipment

Leasehold improvements

Accumulated depreciation and amortization

Property and equipment, net

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Depreciation and amortization expense for the years ended December 31, 2024 and 2023 was approximately $ 70,000 and $ 98,000 , respectively.

Notes receivable

On June 13, 2024, the Company entered into a Senior Secured Promissory Note and Security Agreement (“Promissory Note and Security Agreement”) with EOS Holdings (“the Borrower”).

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 150,000 (“June 2024 Note”).

The June 2024 Note matures on October 11, 2024.

Borrowings under the June 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

On October 23, 2024, the Borrower and the Company agreed to amend the June 2024 Note maturity date to January 31, 2025.

On December 31, 2024, the Borrower and the Company agreed to amend the December 2024 Note maturity date to the latter of the maturity date of the DV Convertible Note of December 31, 2027 or a qualified subsequent financing as determined by the DV Convertible Note agreement.

On August 7, 2024, the Company entered into a second Promissory Note and Security Agreement with the Borrower.

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 100,000 (“August 2024 Note”).

The August 2024 Note matures on December 5, 2024.

Borrowings under the August 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

On October 23, 2024, the Borrower and the Company agreed to amend the August 2024 Note maturity date to January 31, 2025.

On September 23, 2024, the Company entered into a third Promissory Note and Security Agreement with the Borrower.

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 73,485 (“September 2024 Note”).

The September 2024 Note matures on December 5, 2024.

Borrowings under the September 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

On October 23, 2024, the Borrower and the Company agreed to amend the September 2024 Note maturity date to January 31, 2025.

Balance Sheet Components, continued

Depreciation and amortization expense for the years ended December 31, 2023 and 2022 was $ 98,000 and $ 122,000 , respectively.

The cost and accumulated depreciation of assets acquired under finance lease included in machinery and equipment in the above table as of December 31, 2023 was $ 72,000 and $ 72,000 , respectively.

The cost and accumulated depreciation of assets acquired under capital lease included in machinery and equipment in the above table as of December 31, 2022 was $ 72,000 and $ 56,000 , respectively.

On December 23, 2024, the Company entered into a fourth Promissory Note and Security Agreement with the Borrower.

Pursuant to the Promissory Note and Security Agreement, the Company agreed to provide the Borrower with a term loan in the principal amount of $ 100,000 (“December 2024 Note”).

The December 2024 Note matures on January 31, 2025.

Borrowings under the December 2024 Note bear interest at a rate per annum equal to 5.12 %.

On the maturity date, subject to any extension, the Borrower will be obligated to make a payment equal to all unpaid principal and accrued interest.

The above notes receivable are netted on the consolidated balance sheet in Convertible note payable as of December 31, 2024 as there is a right of offset included in the DV Convertible Note and the four amended note receivable agreements above.

At December 31, 2024, the Company had recognized approximately $ 7 thousand of interest income on the Notes Receivable.

There was no note receivable at December 31, 2023.

Deposits for Business Combination

On December 19, 2024 the Company entered into an asset purchase agreement with CompuSystems Inc (“CSI”) (the “CSI Purchase Agreement”) where it has agreed to purchase, assume and accept from CSI all of the rights, title and interests used in the acquired business, and products and services solely to the extent they utilize the transferred assets, including CSI’s customer contracts, trademarks and other intellectual property (the “CSI Acquisition”).

Pursuant to the CSI Purchase Agreement, the Company made an exclusivity deposit of $ 1,000,000 with the designated escrow agent and is recorded on the consolidated balance sheet in Acquisition deposit.

The acquisition has not closed as of December 31, 2024.

Accrued liabilities (in thousands):

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Accrued compensation

Customer advance

Customer advances

Accrued other

Accrued legal fees

Accrued lease liability, current portion

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Convertible Promissory Note

On August 15, 2022, the Company entered into a Securities Purchase Agreement (the “August Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor a senior secured convertible note in the principal amount of $ 3,600,000 (the “Convertible Note”) and a warrant (the “August Warrant”) to purchase up to 20,970 shares of the Company’s common stock, at an exercise price of $ 99.70 per share (the “Exercise Price”), in consideration for $ 3,000,000 .

Pursuant to the August Purchase Agreement, upon the closing of the private placement, pursuant to which Maxim Group LLC (“Maxim”) acted as the placement agent (the “Private Placement”), the Company received gross proceeds of $ 3,000,000 .

On August 15, 2022, the Company entered into a Securities Purchase Agreement (the “August Purchase Agreement”), by and between the Company and an institutional investor (the “Convertible Note Investor”), pursuant to which the Company agreed to issue to the Convertible Note Investor a senior secured convertible note in the principal amount of $ 3,600,000 (the “Convertible Note”) and a warrant to purchase up to 140 shares of the Company’s common stock, at an initial exercise price of $ 14,955.00 per share, in consideration for $ 3,000,000 .

Pursuant to the August Purchase Agreement, upon the closing of the private placement, pursuant to which Maxim Group LLC (“Maxim”) acted as placement agent (the “Private Placement”), the Company received gross proceeds of $ 3,000,000 .

After the deduction of banker fees, commitment fees and other expenses associated with the transaction, the Company received net proceeds of $ 2,483,000 .

The Company used the net proceeds primarily for working capital and general corporate purposes.

The Convertible Note matures on August 15, 2024, does not bear interest and ranks senior to the Company’s existing and future indebtedness and is secured to the extent and as provided in the Security Agreements.

The Convertible Note is convertible in whole or in part at the option of the Convertible Note Investor into shares of Common stock (the “Conversion Shares”) at the Conversion Price (as defined below) at any time following the date of issuance of the Convertible Note.

The Convertible Note defines “Conversion Price” as equal to the lesser of (a) 90 % of the average of the five lowest daily VWAPs (as defined in the Convertible Note) during the previous twenty trading days prior to delivery to the Company of the Convertible Note Investor’s applicable notice of conversion (the “Conversion Notice”) and(b) $ 92.60 (the “Base Conversion Price”).

The Base Conversion Price is subject to full ratchet antidilution protection, subject to a floor conversion price of $ 0.50 per share (the “Floor Price”).

The obligations and performance of the Company under the Convertible Note and the August Purchase Agreement are secured by:

The Convertible Note, had an original maturity date of August 15, 2024, did not bear interest and ranked senior to the Company’s then existing and future indebtedness and was secured to the extent and as provided in the security agreements.

The Convertible Note was convertible in whole or in part at the option of the Convertible Note Investor into shares of common stock (the “Conversion Shares”) at the Conversion Price (as defined below) at any time following the date of issuance of the Convertible Note.

The Convertible Note defines “Conversion Price” as equal to the lesser of (a) 90 % of the average of the five lowest daily VWAPs (as defined in the Convertible Note) during the previous twenty trading days prior to delivery to the Company of the Convertible Note Investor’s applicable notice of conversion and (b) $ 13,890.00 (the “Base Conversion Price”).

The Base Conversion Price was subject to full ratchet antidilution protection, subject to a floor conversion price of $ 75.00 per share (the “Floor Price”).

The obligations and performance of the Company under the Convertible Note and the August Purchase Agreement were secured by:

(a) a senior lien granted pursuant to security agreements between the Convertible Note Investor and the Company, on (a) all of the assets of the Company (b) a senior lien granted pursuant to trademark security agreements between the Convertible Note Investor and the Company;

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and (d) a pledge of certain securities pursuant to a pledge agreement between the Convertible Note Investor, the Company (such agreements listed in (a)-(d) above, collectively, the “Security Agreements”).

The payment and performance obligations of the Company under the Convertible Note and the August Purchase Agreement are guaranteed pursuant to a guaranty by the Company in favor of the Convertible Note Investor.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Borrowings, continued

The payment and performance obligations of the Company under the Convertible Note and the August Purchase Agreement were guaranteed pursuant to a guaranty by the Company in favor of the Convertible Note Investor.

In connection with the Private Placement, the Company issued warrants to the Convertible Note Investor and Maxim to purchase common shares of 140 and 13 , respectively (see Note 6 – Fair Value Measurements).

The sum of the fair value of the warrants, the original issue discount for interest, issuance costs and the derivative liability for the embedded conversion feature for the August 2022 Notes were recorded as debt discounts totaling $ 2,509,000 to be amortized to interest expense over the respective term using the effective interest method.

The sum of the fair value of the warrants, the original issue discount for interest, issuance costs and the derivative liability for the embedded conversion feature for the Convertible Note were recorded as debt discounts totaling $ 2,509,000 to be amortized to interest expense over the respective term using the effective interest method.

During the year ended December 31, 2023, the Company recognized $ 737,000 of interest expense from the amortization of debt discounts and repayment of the convertible note payable in April 2023.

In connection with the Private Placement, the Company entered into a placement agency agreement with Maxim (the “Placement Agency Agreement”), and agreed to issue to Maxim, a warrant to purchase up to an aggregate of 1,944 shares of Common Stock (the “Maxim Warrant”) at an exercise price of $ 99.70 per share, which is exercisable at any time on or after the six-month anniversary of the closing date of the Private Placement and will expire on the fifth ( 5 th ) anniversary of its date of issuance.

Effective August 24, 2022, the Company and the Investor agreed to amend Section 3.1(b) of the Convertible Note to provide that the Conversion Price could not be lower than the Floor Price until stockholder approval has been obtained, after which stockholder approval the Floor Price may be reduced to no lower than $ 0.25 , subject to adjustment pursuant to the terms of the August 2022 Note.

In connection with the Private Placement, the Company entered into a placement agency agreement with Maxim (the “Placement Agency Agreement”), and agreed to issue to Maxim, a warrant to purchase up to an aggregate of 13 shares of common stock (the “Maxim Warrant”) at an initial exercise price of $ 14,955.00 per share, which is exercisable at any time on or after the six-month anniversary of the closing date of the Private Placement and will expire on the fifth ( 5 th ) anniversary of its date of issuance.

Effective August 24, 2022, the Company and the Investor agreed to amend Section 3.1(b) of the Convertible Note to provide that the Conversion Price could not be lower than the Floor Price until stockholder approval has been obtained, after which stockholder approval the Floor Price may be reduced to no lower than $ 37.50 , subject to adjustment pursuant to the terms of the Convertible Note.

The changes were effected by cancellation of the Convertible Note and the issuance of a replacement senior secured convertible note (the “New Convertible Note”) to the Investor.

The New Convertible Note contains identical terms as the Convertible Note, except for the amendment to the Section 3.1(b).

On November 21, 2022, the Company and Maxim entered into an agreement to amend the Maxim Warrant (the “Maxim Warrant Amendment”).

Specifically, the Maxim Warrant Amendment sets forth certain circumstances in which the lock up restrictions to which the Maxim Warrant is subject would not apply.

The Maxim Warrant Amendment also clarifies certain limitations with respect to demand registration rights and provides that Maxim’s piggy-back registration rights expire on the fifth ( 5 th) anniversary of the Maxim Warrant’s date of issuance.

Convertible note payable

Debt discount

The New Convertible Note contains several embedded conversion features.

The New Convertible Note contained several embedded conversion features.

The Company concluded that those conversion features require bifurcation from the New Convertible Note and subsequent accounting in the same manner as a freestanding derivative.

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Subsequent changes in the fair value of these conversion features are measured at each reporting period and recognized in the consolidated statement of operations.

On November 28, 2022, the Company entered into a waiver of rights (the “Waiver”) with the Convertible Note Investor, pursuant to which the Convertible Note Investor agreed to waive certain prohibitions under the August Purchase Agreement with respect to the offering of units in December 2022 in exchange for the issuance by the Company, on the closing date of such offering, of an additional number of Series A Warrants and an additional number of Series B Warrants equal to the quotient obtained by dividing $ 750,000 by the public offering price for the units sold in the offering (such Warrants, the “Waiver Warrants”).

In connection with the public offering the Company consummated on December 1, 2022 (the “December 2022 Offering”), the Company issued 53,572 Series A Warrants and 53,572 Series B Warrants to the Convertible Note Investor (See Note 6).

Borrowings, continued

On November 28, 2022, the Company entered into a waiver of rights (the “Waiver”) with the New Convertible Note Investor, pursuant to which the New Convertible Note Investor agreed to waive certain prohibitions under the August Purchase Agreement with respect to the offering of units in December 2022 in exchange for the issuance by the Company, on the closing date of such offering, of an additional number of Series A warrants to purchase shares of common stock (“Series A Warrants”) and an additional number of Series B warrants to purchase shares of common stock (“Series B Warrants”) equal to the quotient obtained by dividing $ 750,000 by the public offering price for the units sold in the offering (such Warrants, the “Waiver Warrants”).

In connection with the public offering the Company consummated on December 1, 2022 (the “December 2022 Offering”), the Company issued 357 Series A Warrants and 357 Series B Warrants to the New Convertible Note Investor (See Note 7).

The Company’s obligation to issue shares of common stock underlying the Waiver Warrants is expressly conditioned upon stockholder approval of all of the transactions contemplated by the August Purchase Agreement.

1 unchanged sentence

Additionally, as a result of the December 2022 Offering, the Base Conversion Price was adjusted to the Floor Price.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Borrowings, continued

On February 1, 2023, the holder of the Convertible Note converted approximately $ 708,000 , a portion of the outstanding principal amount into 67,500 shares of the Company’s common stock.

On April 11, 2023, the Company paid $ 1,656,744 to the holder of the Convertible Note which repaid the entirety of the outstanding balance and included the unpaid principal, interest through the payoff date, and a pre-payment premium of $ 276,000 which was recorded as a component of loss on debt extinguishment.

Short-Term Loan Agreement

On February 1, 2023, the holder of the New Convertible Note converted approximately $ 708,000 , a portion of the outstanding principal amount into 450 shares of the Company’s common stock.

On April 11, 2023, the Company paid $ 1,656,744 to the holder of the New Convertible Note which repaid the entirety of the outstanding balance and included the unpaid principal, interest through the payoff date, and a pre-payment premium of $ 276,000 which was recorded as a component of loss on debt extinguishment

September 2023 Short-Term Loan Agreement

On September 8, 2023, the Company entered into that certain Loan and Security Agreement with the Meriwether Group Capital Hero Fund LP (“Meriwether Hero Fund”).

Pursuant to the Loan and Security Agreement, the Meriwether Hero Fund agreed to provide the Company with bridge financing in the form of a term loan in the original principal amount of $ 650,000 , which term loan will be senior in priority to the Company’s present and future indebtedness (“Meriwether Loan”).

The Meriwether Loan matures on November 7, 2023, subject to further extension.

In addition, the Company has the right to request additional funding under the Loan and Security Agreement.

The Meriwether Loan was to mature on November 7, 2023, subject to further extension.

In addition, the Company had the right to request additional funding under the Loan and Security Agreement.

Borrowings under the Meriwether Loan bore interest at a rate per annum equal to 18 %.

On the maturity date, subject to any extension, the Company was obligated to make a payment equal to all unpaid principal and accrued interest.

Pursuant to Meriwether Loan, the Company shall pay to the Meriwether Hero Fund a fully earned, non-refundable, origination fee in the amount of $ 50,000 .

The Company shall also pay to the Meriwether Hero Fund a fully earned, non-refundable, exit fee in the amount of $ 50,000 due and payable on the maturity date.

Pursuant to Meriwether Loan, the Company was required to pay to the Meriwether Hero Fund a fully earned, non-refundable, origination fee in the amount of $ 50,000 .

The Company was also required to pay to the Meriwether Hero Fund a fully earned, non-refundable, exit fee in the amount of $ 50,000 due and payable on the maturity date.

The Meriwether Loan also provided that all present and future indebtedness and the obligations of the Company to the Meriwether Hero Fund shall be secured by a first priority security interest in all real and personal property collateral of the Company.

The Meriwether Loan contains customary representations, warranties and affirmative and negative covenants.

In addition, the Meriwether Loan contains customary events of default that entitle the Meriwether Hero Fund to cause the Company’s indebtedness under the Meriwether Loan to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the term loan.

The Meriwether Loan contained customary representations, warranties and affirmative and negative covenants.

In addition, the Meriwether Loan contained customary events of default that entitle the Meriwether Hero Fund to cause the Company’s indebtedness under the Meriwether Loan to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the term loan.

On October 10, 2023, the Meriwether Hero Fund, agreed to extend the Meriwether Loan maturity date from November 7, 2023 to December 7, 2023, for a fee of $ 20,000 .

On December 7, 2023, the Company repaid the full amount of the Meriwether Loan, including all fees and accrued interest.

Borrowings, continued

January 2024 Short-Term Loan Agreement

On January 19, 2024, the Company issued promissory notes in the aggregate principal amount of $ 1,000,000 (the “January 2024 Promissory Notes”) and common stock purchase warrants to purchase up to an aggregate of 66,665 shares (the “January 2024 Warrant Shares”) of the Company’s common stock, at an initial exercise price of $ 22.23 per share with four accredited investors (each an “Investor” and together the “Investors”).

In connection with the January 2024 Promissory Notes, the Company received gross proceeds of $ 600,000 , before fees and other expenses associated with the transaction.

The January 2024 Promissory Note was to mature on the earlier to occur of:

(i) July 17, 2024 and (ii) the full or partial exercise of certain Series B Preferred Stock purchase warrants currently held by the Investor, issuable for at least 9,322 shares of the Company’s Series B Convertible Preferred Stock, par value $ 0.0001 per share (“Series B Preferred Stock”), upon such full or partial exercise.

The January 2024 Promissory Notes did not bear interest except upon the occurrence of an Event of Default (as defined in the January 2024 Promissory Notes).

The January 2024 Promissory Notes were not convertible into shares of common stock or Series B Preferred Stock.

Between the dates of January 26, 2024 and February 2, 2024, the January 2024 Promissory Notes were repaid in full following the exercise of certain of the Company’s Series B Preferred Stock purchase warrants for a total of 29,322 shares of Series B Preferred Stock.

The 2024 Promissory Notes were settled via the payment of $ 667,000 in cash and a $ 333,000 offset to the amount due by one of the investors from the exercise of 9,322 Series B Preferred Stock purchase warrants.

In connection with the issuance of the January 2024 Warrant Shares (see Note 6 – Fair Value Measurements), the fair value of the warrants and the original issue discount for interest were recorded as debt discounts totaling $ 1,260,000 .

The debt discounts were to be amortized to interest expense over the respective term using the effective interest method.

In connection with the full repayment of the January 2024 Promissory Notes, the Company recognized $ 1,260,000 of interest expense in the year ended December 31, 2024.

DV Convertible Note

In connection with the DV Closing, the Company issued the DV Convertible Note in a principal amount of $ 10,000,000 due on the third anniversary of the DV Closing.

The Company agreed to pay interest to EOS Holdings on the aggregate unconverted and then outstanding principal amount of the note at the rate of five and twelve hundredths percent ( 5.12 %) per annum, accruing from the DV Closing.

The DV Convertible Note can be converted at DV Holding’s option, partially or entirely, into shares of common stock, any time after the maturity date until the DV Convertible Note is fully paid off.

The DV Convertible Note uses a conversion price equaling to seventy-five percent ( 75 %) of the average VWAP (as defined in the DV Convertible Note) during the ten ( 10 ) consecutive trading days ending on the trading day that is immediately prior to the conversion date subject to a floor price of $ 1.116 per share.

At DV Holding’s sole discretion, upon a change of control (as defined in the DV Convertible Note), (i) the Company shall cause any successor entity to assume in writing all of the obligations of the Company under the DV Convertible Note, (ii) pay or cause to be paid to EOS Holdings the Note Balance (as defined below) in cash, or (iii) pay, at the closing of such change of control, in full satisfaction of the Company’s obligations under the DV Convertible Note, an amount in cash or equivalent common stock to the amount EOS Holdings would have been paid if it had converted its Note Balance into shares of common stock immediately prior to such closing, at the conversion price.

The parties agreed that the Company may apply up to 25 % of the amount of any payment to be made to EOS Holdings pursuant to the DV Convertible Note towards satisfaction of the amount, if any, owed by EOS Holdings to the Company under those certain senior secured promissory notes, dated June 13, 2024, August 7, 2024, September 23, 2024, and December 23, 2024 (collectively, the “Secured Notes” and the outstanding amount under the Secured Notes, collectively, the “DV Holding’s Note Balance”).

The Note Balance on the maturity date will be automatically reduced by the amount of the DV Holding’s Note Balance.

Borrowings, continued

Pursuant to the DV Convertible Note, if, at any time while the DV Convertible Note is outstanding, the Company enters into any capital raising or financing transaction, including without limitation any issuance by the Company of shares of common stock or common stock equivalents (as defined in the DV Convertible Note) for cash consideration, indebtedness or a combination of units thereof (each, a “Subsequent Financing”), then the Company shall first pay to EOS Holdings at least 10 % of the gross proceeds of such Subsequent Financing to redeem all or a portion of the DV Convertible Note, plus accrued but unpaid interest, plus liquidated damages, if any, and any other amounts then owing to EOS Holdings.

If the aggregate gross proceeds of Subsequent Financings reach or exceed $ 50,000,000 , then the Company shall repay the DV Convertible Note in full, including accrued but unpaid interest, liquidated damages, if any, and any other amounts, then owing to EOS Holdings.

The DV Convertible Note includes customary event of default provisions.

Upon the occurrence of an event of default, the DV Convertible Note and all amounts due thereunder shall become, upon demand by EOS Holdings, immediately due and payable in cash.

Additionally, upon the occurrence of an event of default, interest shall accrue daily at the rate of ten percent ( 10 %) per annum on the aggregate outstanding principal balance and any other amounts then owing by Company to EOS Holdings.

The Company elected the fair value method for the DV Convertible Note outstanding of $ 10,000,000 as of December 31, 2024 due to the embedded derivatives identified within the agreement requiring recurring fair value measurements.

The carrying value of the DV Convertible Note is the same as the fair value as of December 31, 2024 due to the note’s issuance occurring on that day.

The note will be valued using level 3 inputs going forward.

The DV Convertible Note is netted with the notes receivable from EOS Holdings in Convertible notes payable on the consolidated balance sheets as of December 31, 2024 as EOS Holdings agreed to offset the outstanding balance on the DV Convertible Note with the notes receivable at maturity or at a qualifying capital raising or financing transaction noted above.

Fair Value Measurements

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The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Fair Value Measurements, continued

● Level 3 – Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment.

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The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

Fair Value Measurements, continued

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023 by level within the fair value hierarchy, are as follows:

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Quoted prices

Convertible note payable

Warrant liabilities

2 unchanged sentences

Quoted prices

Derivative liability

Warrant liabilities

There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2024 or 2023.

Derivative Liability

As described previously in Note 4, the conversion provisions embedded in the New Convertible Note require bifurcation and measurement at fair value as a derivative.

The fair value was calculated using a Monte Carlo simulation to create a distribution of potential market capitalizations and share prices for the Company on a weekly basis over the assumed period, given the various scenarios.

The average value of the New Convertible Note was discounted to the valuation date to determine a calibrated discount rate so that the fair value of the New Convertible Note was $ 3 million.

The value of the New Convertible Note was compared with the value of a hypothetical note with no conversion rights in order to determine the fair value of the conversion feature.

The derivative liability was written off upon the repayment of the New Convertible Note.

For the year ended December 31,

(in thousands)

Beginning balance

Change in fair value

Ending balance

The changes in fair value of the derivative liability are recorded in change in fair value of derivative liability in the consolidated statements of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Fair Value Measurements, continued

Warrant Liabilities

The following table includes a summary of changes in fair value of the Company’s warrant liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2024 and 2023:

During the three months ended June 30, 2024, the Company amended the terms of certain warrant agreements to remove certain exercise price reset, right to reprice and/or share adjustment provisions (“Reset Provisions”) following a reverse split, in addition to other revisions to the warrants.

In April 2024, the Company effected the April 2024 Reverse Stock Split thereby removing the Reset Provisions (“Reset Amendment Effective Date”) and in accordance with provisions in certain of the warrants issued warrants to purchase an additional 5,602,693 shares of common stock.

Accordingly, the Company remeasured the warrant liability for each of the amended warrants following the Reset Amendment Effective Date and recorded that amount to change in fair value of warrant liabilities with a corresponding increase to warrant liabilities.

Following the Reset Amendment Effective Date, such warrants were no longer deemed to be liability warrants but were now classified as equity warrants.

In connection with this reclassification the Company reclassed approximately $ 41.9 million from warrant liabilities to additional paid in capital.

The following table includes a summary of changes in fair value of the Company’s warrant liabilities measured at fair value using significant unobservable inputs (Level 3) as of December 31, 2024 and 2023.

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common stock price of $ 2.05 ;

exercise prices between $ 0.1482 and $ 10.49 ;

expected yield of 0.0 %;

expected volatility of 119 % and 127 %;

risk-free interest rate between 3.84 % and 4.01 % and expected life between 3.6 and 5.2 years.

The fair value of the Series B Preferred Stock Warrants was determined using the Black-Scholes Model based on the following

key inputs and assumption:

common stock price of $ 58.78 ;

exercise prices of $ 35.72 and $ 55.00 ;

exercise price of $ 1.83 to $ 1,574 ;

expected yield of 0.0 %;

volatility of 73.4 %;

risk-free interest rate of 4.34 % and 5.50 % and expected life between 0.16 and 1.80 years.

expected volatility of 162.8 % to 185.0 %;

risk-free interest rate of 4.1 % to 4.3 % and expected life of 2.9 to 4.4 years.

For the year ended December 31,

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Exercise of warrant liabilities

Conversion of equity warrants to liability warrants

Conversion of liability warrants to equity warrants

Ending balance

Fair Value Measurements, continued

The changes in fair value of the warrant liabilities are recorded in change in fair value of warrant liability in the consolidated statements of operations.

DV Convertible Note

As described in Note 5, the Company elected the fair value option on the DV Convertible Note issued on December 31, 2024.

The fair value of the note was deemed to equal the face value of $ 10,000,000 as the note was issued on that day.

The Company expects to use level 3 inputs to measure the fair value in subsequent periods.

No gain or loss was recorded on the DV Convertible Note for the year ended December 31, 2024.

Convertible Redeemable Preferred Stock and Stockholders’ Equity

Series B Preferred Stock, Series B Preferred Stock Warrants and Common Stock Warrants

On October 16, 2023, the Company consummated a public offering (the “October Public Offering”) for an aggregate of 87,000 Series B Units (“Series B Units”).

Each Series B Unit consists of one share of the Company’s Series B Preferred Stock (“Series B Preferred Stock”) and two warrants, each to purchase one share of Series B Preferred Stock (“Series B Preferred Stock Warrant).

On October 16, 2023, the Company consummated a public offering for an aggregate of 87,000 Series B Units (“Series B Units”).

Each Series B Unit consists of one share of the Company’s Series B Preferred Stock and two warrants, each to purchase one share of Series B Preferred Stock (“Series B Preferred Stock Warrant”).

Each share of Series B Preferred Stock is convertible at the holder’s option at any time, through a two-year period, into the number of shares of the Company’s common stock determined by dividing the $ 100 stated value per share of the Series B Preferred Stock by a conversion price of $ 62.205 per share.

Each share of Series B Preferred Stock is convertible into approximately 241 shares of common stock, and each Series B Preferred Stock Warrant entitles the holder to purchase one share of Series B Preferred Stock at an exercise price of $ 55 per share.

Each share of Series B Preferred Stock is convertible into 1 share of common stock, and each Series B Preferred Stock Warrant entitles the holder to purchase one share of Series B Preferred Stock at an initial exercise price of $ 55 per share.

Dividends are paid in additional fully paid and nonassessable Series B Preferred Stock, at a 20 % dividend rate, non-cumulative.

If any shares of Series B Preferred Stock are outstanding at the end of the two-year period, the holder would be entitled to a cash redemption value equal to the $ 100 Stated Value per share (the “redemption feature”).

If any shares of Series B Preferred Stock are outstanding at the end of the two-year period, the holder would be entitled to a cash redemption value equal to the $ 100 stated value per share.

The gross proceeds from the sale of Series B Units were $ 4,785,000 , before broker fees and related expenses of approximately $ 830,000 .

Due to the redemption feature, the Series B Preferred Stock did not meet the criteria for equity classification and is therefore presented as mezzanine equity in the accompanying Consolidated Balance Sheets.

As a result of certain price protection clauses, the Series B Preferred Stock Warrants did not meet the criteria for equity classification and thus are subject to liability treatment.

Accordingly, of the $ 4,785,000 gross proceeds from the public offering, an amount of $ 2,474,000 , representing the fair value of the warrants as of the issuance date was allocated to the Series B Preferred Stock Warrants liability, with the residual proceeds of $ 2,311,000 allocated to the Series B Preferred Stock.

In Addition, the Company recorded discounts to the Series B Preferred Stock for (i) a beneficial conversion feature of $ 1,909,000 , (ii) the fair value of Series B Preferred Stock Warrants of $ 2,474,000 and (iii) issuance costs of $ 401,000 .

The Company uses the effective interest method to reduce the discounts to the Series B Preferred Stock, against additional paid-in-capital as a deemed dividend, through the two-year term.

Additionally, the difference between the total proceeds per Series B Unit of $ 55 and the full redemption price of $ 100 per share of Series B Preferred Stock constitutes an implied discount, which the Company also accretes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

to Series B Preferred Stock, against additional paid-in-capital as a deemed dividend, to increase the carrying amount of the Series B Preferred Stock to its full redemption price at the end of its two-year term.

On December 6, 2023, the Company executed an Inducement Agreement (the “Inducement Agreement”) with the holders of Series B Preferred Stock Warrants, modifying the exercise price to $ 35.72 per warrant.

Any holder that exercises Series B Preferred Stock Warrants under the Inducement Agreement received a new Common Stock Warrant (“New Common Stock Warrants”) for each Series B Preferred Stock Warrant exercised.

Each New Common Stock Warrant entitles the holder to purchase 482 shares of Common Stock at an exercise price of $ 0.1482 per New Common Stock Warrant.

Due to the redemption feature, the Series B Preferred Stock did not meet the criteria for equity classification and was therefore presented as mezzanine equity in the accompanying Consolidated Balance Sheets.

Exercise of Series B Preferred Stock Warrants

On December 6, 2023, the Company executed an Inducement Agreement (the “Inducement Agreement”) with the holders of Series B Preferred Stock Warrants, reducing the exercise price to $ 35.72 per share of Series B Preferred Stock.

Any holder that exercised Series B Preferred Stock Warrants under the Inducement Agreement received a new Common Stock Warrant (“New Common Stock Warrants”) for each Series B Preferred Stock Warrant exercised.

Each New Common Stock Warrant entitles the holder to purchase 2 shares of common stock at an initial exercise price of $ 22.23 per share.

Due to certain price protections included with the New Common Stock Warrants, the warrants did not meet the criteria for equity classification and thus are subject to liability treatment.

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The Company uses the effective interest method to calculate the accretion amount for each period.

All 61,613 New Common Stock Warrants issued as a result of the exercise of Series B Preferred Stock Warrants remain outstanding as of December 31, 2023.

All 61,613 New Common Stock Warrants issued as a result of the exercise of Series B Preferred Stock Warrants were outstanding as of December 31, 2023.

Issuance costs of $ 429,000 and $ 125,000 were expensed on the date of issuance of the Series B Preferred Stock Warrants and the New Common Stock Warrants, respectively as such warrants were recorded at fair value.

Total issuance costs expensed from the issuances were charged to Change in fair value of warrant liability and amounted to $ 554,000 .

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Through various dates from issuance to December 31, 2023, the holders of 110,278 shares of Series B Preferred Stock converted their shares into 177,282 shares of common stock.

Unamortized discounts to the Series B Preferred Stock of $ 6,063,000 were immediately recorded as a deemed dividend as of conversion date.

Unamortized discounts to the Series B Preferred Stock of $ 6,063,000 were immediately recorded as a deemed dividend on the Statement of Stockholders’ equity (deficit) as of conversion date.

Amortization and accretion of discounts from issuance date through December 31, 2023 amounted to $ 297,000 , which were also recorded as a deemed dividend to the holders of Series B Preferred Stock.

The total such deemed dividends amounted to $ 6,360,000 for the year ended December 31, 2023 and was recorded as a net loss available to common stockholders on the Company’s consolidated statement of operations.

The 38,335 shares of Series B Preferred Stock outstanding as of December 31, 2023, becomes mandatorily redeemable on October 15, 2025 in the amount of $ 3,833,500 .

2018 Long Term Stock Incentive Plan

On January 30, 2018, the Company’s board of directors approved the establishment of the Company’s 2018 Long-Term Stock Incentive Plan (the “LTIP”) and termination of its Carve-Out Plan.

Under the LTIP, the aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the LTIP pursuant to awards of Restricted Shares or Options will be limited to 15 % of the outstanding shares of common stock, which calculation shall be made on the first trading day of each new fiscal year;

provided that, in any year no more than 8 % of the common stock or derivative securitization with common stock underlying 8 % of the common stock may be issued in any fiscal year.

At a Special Meeting of Stockholders on January 24, 2023, the Stockholders approved certain amendments to the LTIP to:

(i) increase the annual share limit of Common Stock that may be issued in any single fiscal year only for the 2023 fiscal year under the LTIP from 8 % of the shares of Common Stock outstanding to 15 % of the shares of Common Stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP), and (ii) permit immediately quarterly calculations based on the number of shares of Common Stock outstanding as of the first trading day of each fiscal quarter, rather than solely as of the first trading day of the fiscal year.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

For the year ended December 31, 2023, up to 2,668,548 shares of common stock are available for participants under the LTIP.

157,581 shares of restricted stock issued under the LTIP, were released with an intrinsic value of approximately $ 25,000 .

For the year ended December 31, 2022, 5,404 shares of restricted stock were released with an intrinsic value of approximately $ 324,000 .

A summary of activity related to restricted stock awards for the years ended December 31, 2023 and 2022 is presented below:

Weighted-Average

Grant Date Fair Value

Non-vested as of January 1, 2022

Non-vested as of December 31, 2022

Non-vested as of December 31, 2023

As of December 31, 2023, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 1,437,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.9 years.

2020 Stock Incentive Plan

A summary of activity related to restricted stock units under the Company’s 2020 Stock Plan for the years ended December 31, 2023 and 2022 is presented below:

Weighted-Average

Grant Date Fair Value

Non-vested as of January 1,2022

Non-vested as of December 31, 2022

Non-vested as of December 31, 2023

As of December 31, 2023, the unamortized compensation costs related to the unvested restricted stock units under the Company’s 2020 Stock Plan was approximately $ 6,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 0.2 years.

For the year ended December 31, 2023, 2,000 shares of restricted stock units were released under the 2020 Stock Plan with an intrinsic value of less than $ 1,000 .

For the year ended December 31, 2022, 2,104 shares of restricted stock units were released under the 2020 Stock Plan with an intrinsic value of approximately $ 68,000 .

Inducement Grant

On September 13, 2021, the Company issued 3,100 shares of restricted common stock to Eric Almgren, the Company’s Chief Strategist, as an inducement grant (“September 2021 Inducement Grant”).

As of December 31, 2023, the unamortized compensation cost related to the unvested September 2021 Inducement Grant was approximately $ 185,000 which is being amortized on a straight-line basis over a period of approximately 0.7 years.

The Company recorded stock-based compensation of $ 255,000 related to this grant for twelve months ended December 31, 2023.

As of December 31, 2023, 2,514 shares are unvested.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

For the twelve months ended December 31, 2023, 264 shares of restricted stock were released under the September 2021 Inducement Grant with an intrinsic value of less than $ 1,000 .

A summary of activity related to restricted stock units under the Company’s 2022 Plan for the year ended December 31, 2023 and 2022 is presented below:

Weighted-Average

Grant Date Fair Value

Non-vested as of January 1, 2022

Non-vested as of December 31, 2022

Non-vested as of December 31, 2023

As of December 31, 2023, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 118,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.5 years.

For the year ended December 31, 2023, 919 shares of restricted stock units were released under the 2022 Plan with an intrinsic value of less than $ 1,000 .

For the year ended December 31, 2022, no stock units were released under the 2022 Plan.

December 2022 Best-Efforts Offering

In connection with the consummation of the December 2022 Offering, the Company issued an aggregate of 504,000 units (the “Units”) and 36,000 pre-funded units (the “Pre-Funded Units”) at an effective public offering price of $ 14.00 per Unit, resulting in net proceeds of approximately $ 6.4 million.

Each Unit consists of (i) one share (the “Shares”) of common stock, par value $ 0.0001 per share (“Common Stock”), (ii) one Series A Warrant (the “Series A Warrants”), and (iii) one Series B Warrant (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”), each such Warrant being exercisable from time to time for one Share of the Company’s common stock at an exercise price of $ 14.00 per share.

Each Pre-Funded Unit consists of (i) one pre-funded warrant (the “Pre-Funded Warrants”), each such Pre-Funded Warrant being exercisable from time to time for one Share of the Company’s common stock, (ii) one Series A Warrant and (iii) one Series B Warrant.

The Warrants are immediately exercisable for one Share at an exercise price of $ 14.00 per share, and will expire five (5) years after the date of issuance.

The Pre-Funded Warrants were immediately exercisable for one Share at an exercise price of $ 0.10 per share.

The Pre-Funded Warrants were exercised immediately upon the closing of the December 2022 Offering, resulting in the issuance of 36,000 shares of common stock and additional proceeds of $ 3,600 to the Company.

The Share and accompanying Warrants included in each Unit were issued separately, and the Pre-Funded Warrant and the accompanying Warrants included in each Pre-Funded Unit were issued separately.

The Units and Pre-Funded Units have no stand-alone rights and were not issued or certificated.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

The 38,335 shares of Series B Preferred Stock outstanding as of December 31, 2023, were to become mandatorily redeemable on October 15, 2025 in the amount of $ 3,833,500 .

Through various dates during the year ended December 31, 2024, holders of Series B Preferred Stock Warrants exercised their warrants into 29,322 shares of Series B Preferred Stock at an exercise price of $ 35.72 per share.

For each exercised Series B Preferred Stock Warrant, the holder received one share of Series B Preferred Stock and one New Common Stock Warrant.

Each New Common Stock Warrant entitles the holder to purchase 2 shares of common stock at an initial exercise price of $ 22.23 per share.

Due to certain price protections included with the New Common Stock Warrants, the warrants did not meet the criteria for equity classification and thus are subject to liability treatment.

Total proceeds from the exercise of the 29,322 Series B Preferred Stock Warrants amounted to $ 1,047,000 , and the remaining fair value of the Series B Preferred Stock Warrant Liability immediately prior to the exercise of $ 587,000 resulted in a total of $ 1,634,000 recorded for the new 29,322 shares of Series B Preferred Stock, of which $ 1,188,000 was allocated to the New Common Stock Warrants liability based on their fair value and $ 446,000 was allocated to the Series B Preferred Stock using the residual method of allocation.

In connection with this new issuance, the Company recorded additional discounts to the Series B Preferred Stock for the New Common Stock Warrants of $ 1,188,000 and issuance costs of $ 61,000 .

The Company also accretes to Series B Preferred Stock, against additional paid-in-capital as a deemed dividend, for the difference between the total proceeds of $ 35.72 per share of Series B Preferred Stock and the full redemption price of $ 100 per share.

The Company uses the effective interest method to calculate the accretion amount for each period.

Issuance costs of $ 44,000 were expensed on the date of issuance of the New Common Stock Warrants, as such warrants were recorded at fair value.

Conversion of Series B Preferred Stock

Through various dates during the year ended December 31, 2024, the holders of 5,000 shares of Series B Preferred Stock converted their shares into 8,038 shares of common stock.

Unamortized discounts to the Series B Preferred Stock of $ 269,000 were immediately recorded as a deemed dividend as of conversion date.

February 2024 Series B Preferred Stock and Series B Preferred Stock Warrants Repurchase

On February 13, 2024, the Company and its Series B Preferred Stock and Series B Preferred Stock Warrants holders entered into an arrangement where the Company agreed to repurchase 62,657 Series B Preferred Stock shares and 81,315 Series B Preferred Stock warrants for a total of $ 6,266,000 .

Unamortized discounts to the Series B Preferred Stock of $ 5,381,000 were immediately recorded as a deemed dividend as of repurchase date.

The remaining fair value of the Series B Preferred Stock Warrant Liability of $ 824,000 was adjusted against additional paid-in-capital on repurchase date.

Other Deemed Dividends

Amortization and accretion of discounts for all Series B Preferred Stock during the year ended December 31, 2024 amounted to $ 192,000 , which were also recorded as a deemed dividend to the holders of Series B Preferred Stock.

The total of deemed dividends (as discussed in this section, the Conversion of Series B Preferred Stock and February 2024 Series B Preferred Stock and Series B Preferred Stock Warrants Repurchase sections above) amounted to $ 5,842,000 for the year ended December 31, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s consolidated statement of operations.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Subject to certain exemptions outlined in the Warrants, if the Company sells, enters into an agreement to sell, or grants any option to purchase, or sells, enters into an agreement to sell, or grants any right to reprice, or otherwise disposes of or issues (or announces any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or any other securities that are at any time convertible into, or exercisable or exchangeable for, or otherwise entitle the holder thereof to receive, Common Stock, at an effective price per share less than the exercise price of the Warrant then in effect, the exercise price of the Warrants will be reduced to equal the effective price per share in such dilutive issuance.

The Warrants contain a one-time reset of the exercise price to a price equal to the lesser of (i) the then exercise price and (ii) 100 % of the five - day volume weighted average prices for the five (5) trading days immediately preceding the date that is sixty days after issuance of such Warrants.

The Warrants are subject to certain call features and, in certain circumstances, may be exercised on a cashless basis.

In connection with the December 2022 Offering, on November 29, 2022, the Company entered into a securities purchase agreement (the “December Purchase Agreement”) with certain institutional investors.

Under the December Purchase Agreement, subject to certain exemptions, the Company is prohibited, until ninety (90) days after the closing of the offering, from issuing, entering into any agreement to issue or announcing the issuance or proposed issuance of any shares of common stock or common stock equivalents (as defined in the December Purchase Agreement) or (ii) filing any registration statement or amendment or supplement thereto under the Securities Act of 1933, as amended (the “Securities Act”).

Also in connection with the December 2022 Offering, on November 29, 2022, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Maxim Group LLC (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as placement agent on a “best efforts” basis in connection with the offering.

The Company paid the Placement Agent an aggregate fee equal to 8.0 % of the gross proceeds raised in the December 2022 Offering, and a non-accountable expense allowance equal to 1.0 % of such gross proceeds.

The Company reimbursed the Placement Agent $ 100,000 for expenses in connection with the December 2022 Offering.

A registration statement on Form S-1 (the “Registration Statement”) relating to the Offering (File No.

333-268085) was initially filed with U.S.

Securities and Exchange Commission (the “SEC”) on November 1, 2022, and was declared effective by the SEC on November 29, 2022.

The December 2022 Offering was made by means of a prospectus forming a part of the effective Registration Statement.

February 2023 Offering

On January 31, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 201,544 shares of common stock and pre-funded warrants (the “February 2023 Pre-Funded Warrants”) to purchase up to 381,762 shares of common stock, at an exercise price of $ 0.0001 per share of common stock, and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 874,959 shares of common stock, at an exercise price of $ 10.49 per share of common stock (the “February 2023 Offering”).

On January 31, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 1,344 shares of common stock and pre-funded warrants (the “February 2023 Pre-Funded Warrants”) to purchase up to 2,545 shares of common stock, at an exercise price of $ 0.015 per share of common stock, and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 5,833 shares of common stock, at an initial exercise price of $ 1,573.50 per share of common stock (the “February 2023 Offering”).

In February and March of 2023, all the February 2023 Pre-Funded Warrants were exercised for cash.

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Also, in connection with the February 2023 Offering, on January 31, 2023, the Company entered into a placement agency agreement with Maxim, pursuant to which Maxim agreed to act as placement agent on a “best efforts” basis in connection with the offering and (ii) the Company agreed to pay Maxim an aggregate fee equal to 8.0 % of the gross proceeds raised in the offering.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Also in connection with the February 2023 Offering, the Company entered into an amendment (the “Amendment”) to the securities purchase agreement, dated as of November 29, 2022, by and between the Company and certain institutional investors (the “November Purchase Agreement”) approved by a certain investor (the “November Investor”) who purchased at least 50.1 % in interest of the shares of Common Stock and the pre-funded warrants to purchase shares of Common Stock, if any, based on the initial subscription amounts under the November Purchase Agreement, pursuant to Section 5.5 of the November Purchase Agreement.

Pursuant to the Amendment, Section 4.11 of the November Purchase Agreement, which prohibits the Company’s ability to issue shares of Common Stock or Common Stock Equivalents (as defined in the November Purchase Agreement) or filing any registration statement or amendment or supplement thereto under the Securities Act, until ninety (90) days after the closing date of the transactions contemplated by the November Purchase Agreement, was amended to permit the offering discussed above and the issuance and sale of the securities offered and sold in such offering.

March 2023 Offering

On March 27, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 837,207 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 1,674,414 shares of common stock, at an exercise price of $ 1.91 per share (the “March 2023 Offering”).

On March 27, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 5,581 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants, exercisable for an aggregate of up to 11,163 shares of common stock, at an initial exercise price of $ 286.50 per share (the “March 2023 Offering”).

On March 29, 2023, the Company closed the March 2023 Offering and received net proceeds of approximately $ 1.6 million, after deducting fees payable to the financial advisor and other offering expenses.

April 2023 Offering

On April 7, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company issued and sold to such investors (i) in a registered direct offering, 743,066 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 1,486,132 shares of Common Stock, at an exercise price of $ 1.41 per share of Common Stock (the “April 2023 Offering”).

On April 7, 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company issued and sold to such investors (i) in a registered direct offering, 4,954 shares of common stock of the Company and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 9,908 shares of common stock, at an initial exercise price of $ 211.50 per share (the “April 2023 Offering”).

On April 12, 2023, the Company closed the April 2023 Offering and received net proceeds of approximately $ 1.0 million, after deducting fees payable to the financial advisor and other offering expenses.

October 2023 Warrant Repurchase

On October 16, 2023, the Company and certain of its common stock warrants holders entered into an arrangement where the Company agreed to repurchase outstanding common stock purchase warrants exercisable for an aggregate of up to 4,646,678 shares of Common Stock, at an exercise prices ranging from $ 1.29 to $ 1.91 per share of Common Stock for a total of $ 2,323,000 .

On October 16, 2023, the Company and certain of its common stock warrants holders entered into an arrangement where the Company agreed to repurchase outstanding common stock purchase warrants exercisable for an aggregate of up to 30,978 shares of common stock, at exercise prices ranging from $ 193.50 to $ 286.50 per share for a total of $ 2,323,000 .

The repurchased warrants were previously classified as equity warrants and at the date of repurchase a charge was recorded to additional paid-in capital.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

February 2024 Issuance of Common Stock and Pre-Funded Common Stock Warrants

On February 13, 2024, the Company consummated a public offering (the “February 2024 Public Offering”) of 158,227 units (the “February Units”) and 867,373 pre-funded units (the “February Pre-Funded Units”).

Each February Unit was issued at $ 9.75 per unit and included one share of common stock and one common stock warrant (the “February Common Warrants”) exercisable for one share of common stock at a $ 9.75 exercise price.

Each February Pre-Funded Unit was issued at $ 9.735 per unit and included one pre-funded common stock warrant (the “February Pre-Funded Warrants”), exercisable for one share of common stock at an initial exercise price of $ 0.015 and one February Common Warrant.

The gross proceeds from the issuance of the February Units and the February Pre-Funded Units were $ 1,543,000 and $ 8,444,000 , respectively, for total aggregate proceeds of $ 9,987,000 before broker fees and related expenses of approximately $ 998,000 .

As a result of certain price protection clauses, the February Common Warrants did not meet the criteria for equity classification and thus are subject to liability treatment.

Accordingly, of the $ 9,987,000 gross proceeds from the February 2024 Public Offering, an amount of $ 6,308,000 , representing the fair value of the February Common Warrants as of the issuance date was allocated to the February Common Warrants liability, with the residual proceeds of $ 3,679,000 allocated to the common stock and February Pre-Funded Warrants, which met the criteria for equity classification.

Of the gross broker fees and related expenses of approximately $ 998,000 , the Company allocated $ 368,000 to the issued common stock and February Pre-Funded Warrants, which were recorded as a reduction of additional paid-in-capital.

The remaining issuance cost of $ 630,000 was allocated to the February Common Warrants and was expensed on the date of issuance as such warrants were recorded at fair value.

March 2024 Issuance of Common Stock, Prefunded Common Stock Warrants and Common Stock Warrants

On March 26, 2024, the Company entered into a Securities Purchase Agreement with certain purchasers where the Company issued 417,833 shares of common stock, 93,342 pre-funded common stock warrants (the “March Pre-Funded Warrants”) and common stock warrants (the “March Common Warrants”) to purchase up to 511,175 shares of common stock at an initial exercise price of $ 6.00 per share (known in aggregate as the “March 2024 Offering”).

Total proceeds per the Securities Purchase Agreement amounted to $ 2,299,000 before broker fees and other related expenses of approximately $ 388,000 .

As a result of certain price protection clauses, the March Common Warrants did not meet the criteria for equity classification and thus are subject to liability treatment.

Accordingly, of the $ 2,299,000 gross proceeds from the March public offering, an amount of $ 1,227,000 , representing the fair value of the March Common Warrants as of the issuance date was allocated to the March Common Warrants liability, with the residual proceeds of $ 1,072,000 allocated to the common stock and March Pre-Funded Warrants, which met the criteria for equity classification.

Of the gross broker fees and related expenses of approximately $ 388,000 , the Company allocated $ 181,000 to the issued common stock and the March Pre-Funded Warrants, which were recorded as a reduction of additional paid-in-capital.

The remaining issuance cost of $ 207,000 was allocated to the March Common Warrants and was expensed on the date of issuance as such warrants were recorded at fair value.

April 2024 Issuances of Common Stock and Common Stock Warrants

On April 17, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 225,834 shares of common stock at $ 3.321 per share, and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 225,834 shares of common stock, at an initial exercise price of $ 3.196 per share (the “Initial April 2024 Registered Direct Offering and Concurrent Private Placement”).

The Initial 2024 Registered Direct Offering and Concurrent Private Placement closed on April 19, 2024 and the Company received gross proceeds of approximately $ 750,000 before deducting placement agent fees and other offering expenses of approximately $ 159,000 .

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

On April 19, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 361,904 shares of common stock at $ 5.25 per share, and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 542,856 shares of common stock, at an initial exercise price of $ 5.06 per share (the “Second April 2024 Registered Direct Offering and Concurrent Private Placement”).

The Second 2024 Registered Direct Offering and Concurrent Private Placement closed on April 23, 2024 and the Company received gross proceeds of approximately $ 1.9 million before deducting placement agent fees and other offering expenses of approximately $ 268,000 .

On April 26, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 418,845 shares of common stock at $ 5.73 per share, and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 418,845 shares of common stock, at an initial exercise price of $ 5.60 per share (the “Third April 2024 Registered Direct Offering and Concurrent Private Placement”).

The Third 2024 Registered Direct Offering and Concurrent Private Placement closed on April 30, 2024 and the Company received gross proceeds of approximately $ 2.4 million before deducting placement agent fees and other offering expenses of approximately $ 298,000 .

May 2024 Issuances of Common Stock and Common Stock Warrants

On May 13, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 785,000 shares of common stock at $ 3.31 per share, and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 785,000 shares of common stock, at an initial exercise price of $ 3.18 per share (the “Initial May 2024 Registered Direct Offering and Concurrent Private Placement”).

The Initial May 2024 Registered Direct Offering and Concurrent Private Placement closed on May 15, 2024 and the Company received gross proceeds of approximately $ 2.6 million before deducting placement agent fees and other offering expenses of approximately $ 314,000 .

On May 15, 2024, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell to such investors (i) in a registered direct offering, 675,000 shares of common stock at $ 3.61 per share, and (ii) in a concurrent private placement, common stock purchase warrants exercisable for an aggregate of up to 675,000 shares of common stock, at an initial exercise price of $ 3.48 per share (the “Second May 2024 Registered Direct Offering and Concurrent Private Placement”).

The Second May 2024 Registered Direct Offering and Concurrent Private Placement closed on May 17, 2024 and the Company received gross proceeds of approximately $ 2.4 million before deducting placement agent fees and other offering expenses of approximately $ 290,000 .

For the three months ended June 30, 2024, the Company’s board of directors approved the issuance of a total of 136,203 shares of common stock to two vendors for investor relations services.

The fair value of such common shares was calculated to be $ 360,000 and was recorded to other assets and additional paid in capital.

The fair value of such shares will be amortized over the service period of each agreement which ranged from 6 months to 12 months .

The shares of common stock were issued in July 2024.

Exchange Agreements

On September 10, 2024, the Company entered into exchange agreements (each, an “Exchange Agreement”) with certain holders (the “Holders”) of common stock purchase warrants exercisable for an aggregate of up to 5,135,182 shares of common stock, originally issued on February 13, 2024 and having a then-current exercise price of $ 1.83 (such warrants, the “February 2024 Warrants”).

Pursuant to the Exchange Agreements, the Holders agreed to exchange their February 2024 Warrants for newly issued common stock purchase warrants exercisable for an aggregate of up to 5,135,182 shares of common stock, at an exercise price of $ 2.21 per share (such warrants, the “Exchange Warrants”, and such shares of common stock issuable upon exercise thereof, the “Exchange Warrant Shares”).

The Exchange Warrants are immediately exercisable.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Warrant Side Letter Agreements

Also on September 10, 2024, following completion of the transactions contemplated by the September 2024 Warrant Inducement (see below), the Company entered into side letter agreements (each, a “Side Letter Agreement”) with the Holders with respect to (i) those certain common stock purchase warrants of the Company, originally issued to the Holders on March 27, 2024, as amended (the “March 2024 Warrants”), (ii) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 19, 2024, as amended (the “1st April 2024 Warrants”), (iii) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 23, 2024 (the “2nd April 2024 Warrants”), (iv) those certain common stock purchase warrants of the Company, originally issued to the Holders on April 30, 2024 (the “3rd April 2024 Warrants”), (v) those certain common stock purchase warrants of the Company, originally issued to the Holders on May 15, 2024 (the “1st May 2024 Warrants”), and (vi) those certain common stock purchase warrants of the Company, originally issued to the Holders on May 17, 2024 (the “2nd May 2024 Warrants”, and collectively with the March 2024 Warrants, the 1st April 2024 Warrants, the 2nd April 2024 Warrants, the 3rd April 2024 Warrants, and the 1st May 2024 Warrants, the “Original Warrants”), which Holders are also parties to (i) that certain securities purchase agreement, dated as of March 26, 2024 (the “March 2024 Purchase Agreement”), (ii) that certain securities purchase agreement, dated as of April 17, 2024 (the “1st April 2024 Purchase Agreement”), (iii) that certain securities purchase agreement, dated as of April 19, 2024 (the “2nd April 2024 Purchase Agreement”), (iv) that certain securities purchase agreement, dated as of April 26, 2024 (the “3rd April 2024 Purchase Agreement”), (v) that certain securities purchase agreement, dated as of May 13, 2024 (the “1st May 2024 Purchase Agreement”), and (vi) that certain securities purchase agreement, dated as of May 15, 2024 (the “2nd May 2024 Purchase Agreement”, and collectively with the March 2024 Purchase Agreement, the 1st April 2024 Purchase Agreement, the 2nd April 2024 Purchase Agreement, the 3rd April 2024 Purchase Agreement, and the 1st May Purchase Agreement, the “Original Purchase Agreements”) with the Company.

Pursuant to the Side Letter Agreements, (a) the Holders agreed to (i) amend the “Fundamental Transaction” provisions in the Original Warrants, so that the “Black Scholes Value” clauses in such provisions will be removed in their entirety, effective immediately following receipt of stockholder approval of (a) the issuance of the New Warrant Shares (as defined below) and (b) the issuance of shares of common stock pursuant to the alternative cashless exercise provisions of the 1st April 2024 Warrants, the 2nd April 2024 Warrants, the 3rd April 2024 Warrants, the 1st May 2024 Warrants, and the 2nd May 2024 Warrants, (ii) remove the “Stockholder Meeting” provisions in the March 2024 Purchase Agreement, effective immediately, (iii) amend the “Stockholder Meeting” provisions in the remaining Original Purchase Agreements such that the Company is first obligated to call a stockholder meeting to approve the issuance of the shares of common stock issuable upon exercise of the Original Warrants no later than December 31, 2024, and thereafter, to re-call a stockholder meeting, if necessary, every six months until such stockholder approval is obtained, and (iv) remove the “Subsequent Equity Sales” and “Registration Statement” provisions in the March 2024 Purchase Agreement;

and (b) as inducements to and in consideration for each Holder’s agreement to amend the Original Warrants and the Original Purchase Agreements in accordance with the applicable Side Letter Agreement, the Company agreed to issue to the Holders an aggregate of 887,356 shares of common stock (the “New Shares”) and common stock purchase warrants (each, a “New Warrant”, and collectively, the “New Warrants”) exercisable for up to an aggregate of 5,391,746 shares of common stock (the “New Warrant Shares”), such New Shares to be issued upon execution of the Side letter Agreements, and such New Warrants to be issued upon the receipt of stockholder approval referred to in (a)(i) above.

The New Warrants will have a per share exercise price equal to $ 2.21 , will contain 4.99 / 9.99 % beneficial ownership limitations, will be exercisable at any time on or after the Stockholder Approval Date (as defined in the New Warrants) and will expire five years thereafter.

Once exercisable, the New Warrants may be exercised, in certain circumstances, on a cashless basis pursuant to the formula contained in the New Warrants.

The holder of a New Warrant may also effect an “alternative cashless exercise” commencing on the Stockholder Approval Date.

In such event, the aggregate number of shares of common stock issuable in such alternative cashless exercise pursuant to any given notice of exercise electing to effect an alternative cashless exercise shall equal the product of (x) the aggregate number of shares of common stock that would be issuable upon exercise of the New Warrant in accordance with the terms of the New Warrant if such exercise were by means of a cash exercise rather than a cashless exercise and (y) 1.0 .

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

The fair value of the 887,356 shares of common stock was calculated to be approximately $ 2.1 million, based on the common stock price of the date of issuance of $ 2.40 .

The incremental fair value of the Exchange Warrants was calculated to be approximately $ 123,000 and was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of the exchange of $ 2.40 ;

expected yield of 0.0 %;

expected volatility of 143 %;

risk-free interest rate of 3.4 % and expected life of 5 years.

The fair value of approximately $ 2,253,000 , which is the combination of the issuance of 887,356 common shares and the Exchange Warrants were treated as equity instruments.

The approximately $ 2,253,000 is considered a deemed dividend for the year ended December 31, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s consolidated statement of operations.

The fair value of approximately 8,125,000 of the New Warrant Shares was classified as equity and was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on date of the stockholders approval of December 20, 2024 of $ 1.70 ;

expected yield of 0.0 %;

expected volatility of 143 %;

risk-free interest rate of 4.4 % and expected life of 5 years.

The fair value of the approximately 8,125,000 warrants was treated as a deemed dividend for the year ended December 31, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s consolidated statement of operations.

The total deemed dividend for the year ended December 31, 2024 for warrant exchanges and modifications was $ 10,475,000 and is recorded on the consolidated statement of operations in Deemed dividend on issuance of common stock and warrants issued in connection with amendments to warrants to purchase common stock.

For the year ended December 31, 2024, the Company’s board of directors approved the issuance of individual grants of 100,000 , 100,000 and 36,203 shares of common stock to various vendors for financial advisory services.

The fair value of such common shares was calculated to be $ 240,000 , 264,000 and 96,000 , respectively, and was recorded to other assets and additional paid in capital.

The fair value of such shares will be amortized over the service period of 12 months.

The shares of common stock were issued in July 2024 and August 2024.

Warrants for Common Shares

A summary of the warrant activity and related information for the year ended December 31, 2023 and 2022 is provided as follows.

In connection with the December 2022 Offering, under which warrants to purchase common stock were issued with an exercise price of $ 14.00 per share, the exercise price of the Convertible Note Warrant was reduced from $ 99.70 per share to the Floor Price of $ 50.00 per share as a result of the full ratchet antidilution protection clause in the Convertible Note Warrant.

At December 31, 2022, the fair value of the Convertible Note Warrant was $ 151,000 .

The Company determined the fair value of the warrant using the Black-Scholes Model based on the following weighted average assumptions:

common stock price on revaluation date of $ 11.00 ;

expected dividend yield of 0.0 %;

A summary of the warrant activity and related information for the years ended December 31, 2024 and 2023 is provided as follows.

In connection with February 2023 Offering, the Company issued common stock purchase warrants to investors to purchase up to 5,833 shares of the Company’s common stock, at an initial exercise price of $ 1,573.50 per share.

The grant date fair value of such warrants was $ 5,600,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of $ 1,335.00 ;

expected yield of 0.0 %;

expected volatility of 96 %;

risk-free interest rate of 3.67 % and expected life of 5 years.

The change in the fair value of the warrant liability was recorded to other income on the consolidated statements of operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

In connection with March 2023 Offering, the Company issued common stock purchase warrants to investors to purchase up to 11,163 shares of the Company’s common stock, at an initial exercise price of $ 286.50 per share.

The grant date fair value of such warrant was $ 2,113,000 , which was recorded as equity.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of $ 249.00 ;

expected yield of 0.0 %;

expected volatility of 104 %;

risk-free interest rate of 3.67 % and expected life of 5 years.

In connection with April 2023 Offering, the Company issued Common Stock Purchase Warrants to investors to purchase up to 9,907 shares of the Company’s common stock, at an exercise price of $ 211.50 per share.

The grant date fair value of such warrant was $ 1,596,000 , which was recorded as equity.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of $ 198.00 ;

expected yield of 0 %;

expected volatility of 115.6 %;

risk-free interest rate of 3.46 % and expected life of 5 years.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with the Convertible Note, the Company issued a warrant to Maxim to purchase up to 1,944 shares of the Company’s common stock, at an exercise price of $ 99.70 per share (see Note 4 – Borrowings).

The grant date fair value of such warrants was $ 91,000 , which was recorded as debt discount with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumptions:

common stock price on date of grant of 77.00 ;

expected dividend yield of 0.0 %;

May 2023 Warrant Inducement

On May 15, 2023, the Company entered into warrant exercise inducement offer letters with the holders of common stock purchase warrants exercisable for an aggregate of up to 9,907 shares of common stock at an initial exercise price of $ 211.50 per share issued on April 12, 2023 (the “April Warrants”).

The April Warrant holders agreed to exercise for cash April Warrants to purchase

up to 9,907 shares of common stock in exchange for the Company’s agreement to issue 19,815 new warrants (the “May Inducement Warrants”) on substantially the same terms as the April Warrants.

The Company received net proceeds of approximately $ 1.9 million from the exercise of the April Warrants.

Each May Inducement Warrant is exercisable at a price per share of common stock of $ 199.50 , which was equal to the Minimum Price (as defined by the Nasdaq Listing Rules).

Each May Inducement Warrant is immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

The exercise price of the May Inducement Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock.

The May Inducement Warrants are callable by the Company at a redemption price of $ 75.00 per May Inducement Warrant, provided that the resale of the shares of common stock underlying the May Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

July 2023 Warrant Inducement

On July 26, 2023, the Company entered into warrant exercise inducement offer letters (the “July Inducement Letters”) with holders of the May Inducement Warrants pursuant to which the Company agreed to issue new inducement warrants (the “July Inducement Warrants”) to purchase a number of shares of common stock equal to 100 % of the number of shares of common stock received upon exercise of the May Inducement Warrants during the period provided for in the July Inducement Letters, with such July Inducement Warrants to be issued on substantially the same terms as the May Inducement Warrants.

The holders exercised 3,400 May Inducement Warrants pursuant to certain of the July Inducement Letters, and the Company received aggregate gross proceeds of approximately $ 678,000 from such exercises.

In exchange for the exercises of the May Inducement Warrants, the Company issued July Inducement Warrants exercisable for an aggregate of up to 3,400 shares of common stock at an initial exercise price of $ 193.50 per share.

Each July Inducement Warrant was immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

The exercise price of the July Inducement Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock.

The July Inducement Warrants are callable by the Company at a redemption price of $ 75.00 per July Inducement Warrant, provided that the resale of the shares of common stock underlying the July Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

In connection with the January 2024 Promissory Notes, the Company issued common stock purchase warrants to investors to purchase up to 66,665 shares of the Company’s common stock, at an initial exercise price of $ 22.23 per share.

The grant date fair value of such warrant was $ 860,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of $ 15.99 ;

expected yield of 0.0 %;

expected volatility of 119 %;

risk-free interest rate of 4.31 % and expected life of 5 years.

The Warrant is exercisable at any time on or after the six-month anniversary of the closing date of the Private Placement and will expire on the fifth (5th) anniversary of its date of issuance and may be exercised on a cashless basis in the event that the shares of common stock underlying the warrant are not covered by a registration statement.

In addition, the warrant includes a registration rights provision granting Maxim the same registration rights granted to the Convertible Note investor pursuant to the August Purchase Agreement.

The exercise price is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate changes.

In connection with the December 2022 Offering, the Company issued Series A warrants to the December 2022 investors to purchase up to 540,000 shares of the Company’s common stock, at an exercise price of $ 14.00 per share.

The grant date fair value of such warrants was $ 4,914,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants at issuance was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on date of grant of $ 11.00 ;

expected dividend yield of 0.0 %;

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with February 2024 Public Offering, the Company issued common stock purchase warrants to investors to purchase up to 1,025,600 shares of the Company’s common stock, at an initial exercise price of $ 9.75 per share.

The grant date fair value of such warrant was $ 6,308,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of $ 7.62 ;

expected yield of 0.0 %;

expected volatility of 119 %;

risk-free interest rate of 4.31 % and expected life of 5 years.

In connection with the December 2022 Offering, the Company issued Series B warrants to the December 2022 investors to purchase up to 540,000 shares of the Company’s common stock, at an exercise price of $ 14.00 per share.

The grant date fair value of such warrants was $ 4,914,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

In connection with March 2024 Offering, the Company issued common stock purchase warrants to investors to purchase up to 511,175 shares of the Company’s common stock, at an initial exercise price of $ 6.00 per share.

The grant date fair value of such warrant was $ 1,227,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on date of grant of $ 11.00 ;

expected dividend yield of 0.0 %;

common stock price on the date of grant of $ 3.18 ;

expected yield of 0.0 %;

expected volatility of 119 %;

risk-free interest rate of 4.21 % and expected life of 5 years.

In December 2022, the Company issued a Series A Warrant to the Convertible Note Investor to purchase up to 53,572 shares of the Company’s common stock, at an exercise price of $ 14.00 per share (see Note 4 – Borrowings).

The grant date fair value of such warrants was $ 488,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

On March 26, 2024, the Company entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with certain holders of (i) the New Common Stock Warrants, (ii) the common stock purchase warrants dated January 23, 2024 (the “January 2024 Warrants”), and (iii) the February Common Warrants (together with the New Common Stock Warrants and the

January 2024 Warrants, the “Original Warrants”), whereby the holders agreed to (i) amend the New Common Stock Warrants and the January 2024 Warrants so such warrants shall not be exercisable until one or more certificates of amendment to the Company’s certificate of incorporation, as amended, are filed with the Secretary of State of the State of Delaware to effectuate an increase in authorized shares of capital stock of the Company and a reverse stock split of the Company’s outstanding shares of common stock;

and (ii) remove certain exercise price reset, right to reprice and/or share adjustment provisions in the Original Warrants, to be effective following the first adjustments following the April 2024 Reverse Stock Split.

In connection with the Initial April 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 225,834 shares of the Company’s common stock, at an initial exercise price of $ 3.196 per share.

The grant date fair value of such warrant was $ 1,255,000 , which was recorded as equity.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on date of grant of $ 11.00 ;

expected dividend yield of 0.0 %;

common stock price on the date of grant of $ 6.06 ;

expected yield of 0.0 %;

expected volatility of 135 %;

risk-free interest rate of 4.63 % and expected life of 5 years.

In December 2022, the Company issued a Series B Warrant to the Convertible Note Investor to purchase up to 53,572 shares of the Company’s common stock, at an exercise price of $ 14.00 per share (see Note 4 – Borrowings).

The grant date fair value of such warrants was $ 488,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

In connection with the Second April 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 542,856 shares of the Company’s common stock, at an initial exercise price of $ 5.06 per share.

The grant date fair value of such warrant was $ 2,595,000 , which was recorded as equity.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on date of grant of $ 11.00 ;

expected dividend yield of 0.0 %;

common stock price on the date of grant of $ 5.39 ;

expected yield of 0.0 %;

expected volatility of 135 %;

risk-free interest rate of 4.63 % and expected life of 5 years.

In connection with February 2023 Offering, the Company issued Common Stock Purchase Warrants to investors to purchase up to 874,959 shares of the Company’s common stock, at an exercise price of $ 10.49 per share.

The grant date fair value of such warrants was $ 5,600,000 , which was recorded as a liability with the offset recorded to additional paid-in capital on the consolidated balance sheets.

In connection with the Third April 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 418,845 shares of the Company’s common stock, at an initial exercise price of $ 5.60 per share.

The grant date fair value of such warrant was $ 2,048,000 , which was recorded as equity.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

3 unchanged sentences

risk-free interest rate of 4.63 % and expected life of 5 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with March 2023 Offering, the Company issued Common Stock Purchase Warrants to investors to purchase up to 1,674,414 shares of the Company’s common stock, at an exercise price of $ 1.91 per share.

In connection with the Initial May 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 785,000 shares of the Company’s common stock, at an initial exercise price of $ 3.18 per share.

The grant date fair value of such warrant was $ 2,453,000 , which was recorded as equity.

4 unchanged sentences

risk-free interest rate of 4.35 % and expected life of 5 years.

In connection with April 2023 Offering, the Company issued Common Stock Purchase Warrants to investors to purchase up to 1,486,132 shares of the Company’s common stock, at an exercise price of $ 1.41 per share.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

In connection with the Second May 2024 Registered Direct Offering and Concurrent Private Placement, the Company issued Common Stock Purchase Warrants to investors to purchase up to 675,000 shares of the Company’s common stock, at an initial exercise price of $ 3.48 per share.

The grant date fair value of such warrant was $ 1,944,000 , which was recorded as equity.

4 unchanged sentences

risk-free interest rate of 4.35 % and expected life of 5 years.

During the year ended December 31, 2023, and excluding (i) the Warrant Inducement – May 2023, (ii) the Warrant Inducement - July 2023 (both described below) and (iii) the exercise of Pre-Funded Warrants, a total of 2,715 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 32,000 .

During the year ended December 31, 2022, other than the exercise of the Pre-Funded Warrants described Note 6 – December 2022 Offering, warrant holders did no t exercise any warrants to purchase common stock.

Warrant Inducement – May 2023

On May 15, 2023, the Company entered into warrant exercise inducement offer letters (the “May Inducement Letters”) with the holders of common stock purchase warrants exercisable for an aggregate of up to 1,486,132 shares of common stock at an exercise price of $ 1.41 per share issued on April 12, 2023 (the “April Warrants”).

The April Warrant holders agreed to exercise for cash April Warrants to purchase up to 1,486,132 shares of common stock in exchange for the Company’s agreement to issue 2,972,264 new warrants (the “May Inducement Warrants”) on substantially the same terms as the April Warrants.

The Company received net proceeds of approximately $ 1.9 million from the exercise of the April Warrants.

Each May Inducement Warrant is exercisable at a price per share of common stock of $ 1.33 , which was equal to the Minimum Price (as defined by the Nasdaq Listing Rules).Each May Inducement Warrant is immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

The May Inducement Warrants are callable by the Company at a redemption price of $ 0.50 per Inducement Warrant, provided that the resale of the shares of common stock underlying the May Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

Warrant Inducement – July 2023

On July 26, 2023, the Company entered into warrant exercise inducement offer letters (the “July Inducement Letters”) with holders of the May Inducement Warrants pursuant to which the Company agreed to issue new inducement warrants (the “July Inducement Warrants”) to purchase a number of shares of Common Stock equal to 100 % of the number of shares of Common Stock received upon exercise of the May Inducement Warrants during the period provided for in the July Inducement Letters, with such July Inducement Warrants to be issued on substantially the same terms as the May Inducement Warrants.

The holders exercised 510,000 of the May Inducement Warrants pursuant to certain of the July Inducement Letters, and the Company received net proceeds of approximately $ 617,000 from such exercises.

In exchange for the exercises of the May Inducement Warrants, the Company issued July Inducement Warrants exercisable for an aggregate of up to 510,000 shares of common stock at an exercise price of $ 1.29 per share.

Each July Inducement Warrant was immediately exercisable upon issuance and will expire on the fifth anniversary of its issuance.

The July Inducement Warrants are callable by the Company at a redemption price of $ 0.50 per July Inducement Warrant, provided that the resale of the shares of common stock underlying the July Inducement Warrants are then registered or may be resold under Rule 144 under the Securities Act.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

September 2024 Warrant Inducement

On September 10, 2024, the Company entered into warrant exercise inducement offer letters (the “September 2024 Inducement Letters”) with holders of the Exchange Warrants pursuant to which the Company agreed to issue new inducement warrants (the “September 2024 Inducement Warrants”) to purchase a number of shares of common stock equal to 65 % of the number of shares of common stock received upon exercise of the Exchange Warrants during the period provided for in the September 2024 Inducement Letters, with such September 2024 Inducement Warrants to be issued on substantially the same terms as the Exchange Warrants.

The holders exercised 2,228,628 Exchange Warrants for the year ended December 31, 2024, pursuant to the September 2024 Inducement Letters, and the Company received aggregate gross proceeds of approximately $ 4.9 million for the year ended December 31, 2024 from such exercises.

In exchange for the exercises of the Exchange Warrants, the Company issued September 2024 Inducement Warrants exercisable for an aggregate of up to 1,448,609 shares of common stock at an exercise price of $ 2.21

per share for the year ended December 31, 2024.

Each September 2024 Inducement Warrant is subject to shareholder approval and will expire on the fifth anniversary of such approval.

The grant date fair value of the 1,448,609 warrants issued was approximately $ 3,132,000 , which were treated as equity instruments.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of between $ 1.71 and $ 2.60 ;

expected yield of 0 %;

expected volatility of 142 % to 143 %;

risk-free interest rate of between 3.43 % and 4.37 % and expected life of 5 years.

Amendments to September Inducement Agreements

The September 2024 Inducement agreements were each amended as of September 30, 2024, for a second time as of October 31, 2024 and for a third time as of November 30, 2024, and for a fourth time as of December 20, 2024.

In the inducement agreement the Company agreed to issue to the holder one or more common stock purchase warrants exercisable for up to a number of shares of common stock equal to 65 % of the number of shares of common stock issued upon exercise of the September 2024 Warrants.

On December 20, 2024, the Company entered into a fourth amendment agreement with each of the holders to extend the expiration date of the inducement period to January 31, 2025.

December Inducement Agreements

In connection with the March 2024 Offering, the Company issued and sold to the existing March 2024 warrant holders common stock purchase warrants (the “Existing Warrants”) exercisable for up to 1,675,803 shares of common stock (the “Existing March 2024 Warrant Shares”).

On December 20, 2024, the Company entered into inducement agreements (each, an “December Inducement Agreement”) with the existing March 2024 warrant holders, in which the Company agreed, as consideration for exercising all or part of the Existing Warrants held by any such existing March 2024 warrant holder at a per share exercise price of $ 1.70 on or prior to December 31, 2024, to issue to the existing March 2024 warrant holder one or more common stock purchase warrants exercisable for up to a number of shares of common stock equal to 150 % of the Existing March 2024 Warrant Shares issuable upon the exercise of the Existing Warrants pursuant to its December Inducement Agreement (such warrants, the “December Inducement Warrants” and such shares of common stock issuable upon exercise thereof, the “December Inducement Warrant Shares”).

The December Inducement Warrants had a per share exercise price of $ 1.70 .

The holders exercised 1,675,803 Existing Warrants pursuant to the 2024 December Inducement Agreements, and the Company received aggregate gross proceeds of approximately $ 2.8 million from such exercises.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

The incremental fair value of the Exchange Warrants was calculated to be approximately $ 97,000 and was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of the exchange of $ 1.70 ;

expected yield of 0.0 %;

expected volatility of 143 %;

risk-free interest rate of 4.3 % and expected life of 5 years.

The warrants were treated as equity warrants.

The approximately $ 97,000 is considered a deemed dividend for the year ended December 31, 2024 and was recorded as an adjustment to net loss available to common stockholders on the Company’s consolidated statement of operations.

In exchange for the exercises of the Existing Warrants, the Company issued December 2024 Inducement Warrants exercisable for an aggregate of up to 2,513,703 shares of common stock at an exercise price of $ 1.70 per share.

Each December 2024 Inducement Warrant is subject to shareholder approval and will expire on the fifth anniversary of such approval.

The grant date fair value of the 2,513,703 warrants was approximately $ 4,532,000 , which were treated as equity instruments.

The fair value of such warrants was determined using the Black-Scholes Model based on the following weighted average assumption:

common stock price on the date of grant of between $ 1.81 and $ 2.28 ;

expected yield of 0 %;

expected volatility of 142 %;

risk-free interest rate of 4.4 % and expected life of 5 years.

The December Inducement Warrants will expire on the fifth anniversary of December 20, 2024, the stockholder approval date.

Pursuant to the Purchase Agreement, the Existing Warrant Holders were granted the right to participate in certain offerings of the Company for a specified period of time (the “Original Participation Right”).

Under the December Inducement Agreements, upon full exercise of the Existing Warrants, the Original Participation Right will terminate and the Existing Warrant Holders will receive a new participation right where they may participate in, until March 27, 2027, any offering by the Company up to an amount equal to such Existing Warrant Holder’s pro rata portion (measured by number of shares of common stock issuable upon

exercise of all existing common stock purchase warrants of the Company as of the date of the December Inducement Agreements) of 40 % of such offering on the same terms, conditions and price provided to other purchasers in the applicable offering.

During the year ended December 31, 2024, 4,343,042 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 8.0 million.

In addition, during the year ended December 31, 2024, 1,712,049 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance 1,113,943 shares of common stock.

During the year ended December 31, 2023, 13,440 warrants to purchase common stock were exercised for cash, resulting in net proceeds of approximately $ 2.5 million.

During the year ended December 31, 2023, 7,454 warrants were exercised using an alternative cashless exercise provision, resulting in the issuance of 5,591 shares of common stock.

February 2024 Warrants Black Scholes Value Payout

On December 31, 2024 on the closing of the DV Asset Acquisition, a provision requiring a Black Scholes Value payout was triggered in the remaining outstanding February 2024 Warrants.

This provision was triggered because the DV Asset Acquisition met the criteria for a fundamental change as described in the warrant agreement.

The Black Scholes Value payout was valued at $ 1.96 per share and there was an aggregate number of warrants outstanding of 328,483 .

In order to receive the payout, holders

must elect within 30 days of the fundamental change otherwise the warrants convert to warrants in the Company.

The warrants were equity classified prior to the close of the DV Asset Acquisition and were reclassified to liability treatment as a result of the payout provision trigger.

The aggregate fair value at December 31, 2024 was $ 645,000 and there was no gain or loss recorded for the year ended December 31, 2024 for fair value as they were reclassified on the last day of the period.

Convertible Redeemable Preferred Stock and Stockholders’ Equity, continued

Information regarding warrants for common stock outstanding and exercisable as of December 31, 2024 is as follows:

Warrants exercisable as of December 31, 2023 exclude warrants to purchase 100 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones and warrants to purchase 28,133,588 shares of common stock issued to investors that participated in the Inducement Agreement that requires shareholder approval prior to the warrants being exercisable.

Additionally, warrants to purchase 207 shares of common stock which are shown above with a price of $ 1,580.00 are pre-funded warrants under which the holder shall pay $ 20.00 per share to complete the exercise.

Warrants exercisable as of December 31, 2024 exclude warrants to purchase 1 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones, warrants to purchase 2,513,703 shares of common stock issued to investors that participated in the December Inducement Agreement that requires shareholder approval prior to the warrants being exercisable and warrants to purchase 328,483 shares of common stock issued to investors that participated in the February 2024 Public Offering that requires shareholder approval prior to the warrants being exercisable, for which all have been recorded as a liability due to the triggering with the Datavault Transaction of the Black Scholes Value payout provision.

Information regarding warrants for common stock outstanding and exercisable as of December 31, 2024 is as follows:

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$ 1.83 - $ 2.21

$ 3.18 - $ 3.48

$ 5.06 - $ 6.00

$ 1,574.00 -$ 30,000.00

$ 38,250.00 - $ 262,500.00

* Weighted Average

Warrants exercisable as of December 31, 2022 exclude warrants to purchase 100 shares of common stock issued to a marketing firm, which vest upon the achievement of certain milestones, warrants to purchase 1,944 shares of common stock issued to Maxim which became exercisable on February 15, 2023, and warrants to purchase 107,144 shares of common stock issued to a Convertible Note Investor that require shareholder approval prior to being exercisable, which was received at a special meeting of our stockholders held on January 24, 2023.

Information regarding warrants for common stock outstanding and exercisable as of December 31, 2023 is as follows:

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$ 30,000.00 - $ 654,000.00

$ 300.00 - $ 980.00

$ 1,580.00 - $ 12,500.00

* Weighted Average

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Warrants exercisable as of December 31, 2023 exclude warrants to purchase 1 share of common stock issued to a marketing firm, which vest upon the achievement of certain milestones and warrants to purchase 187,557 shares of common stock issued to investors that participated in the Inducement Agreement that requires shareholder approval prior to the warrants being exercisable.

Additionally, warrants to purchase 1 share of common stock which are shown above with a price of $ 237,000.00 are pre-funded warrants under which the holder shall pay $ 3,000.00 per share to complete the exercise.

Stock-Based Compensation

2018 Long Term Stock Incentive Plan

On January 30, 2018, the Company’s board of directors approved the establishment of the Company’s 2018 Long-Term Stock Incentive Plan (the “LTIP”) and termination of its Carve-Out Plan.

provided that, in any year no more than 8 % of the common stock or derivative securitization with common stock underlying 8 % of the common stock may be issued in any fiscal year.

At a Special Meeting of Stockholders on January 24, 2023, the Company’s stockholders approved certain amendments to the LTIP to:

(i) increase the annual share limit of common stock that may be issued in any single fiscal year only for the 2023 fiscal year under the LTIP from 8 % of the shares of common stock outstanding to 15 % of the shares of common stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP), and (ii) permit immediately quarterly calculations based on the number of shares of common stock outstanding as of the first trading day of each fiscal quarter, rather than solely as of the first trading day of the fiscal year.

At a Special Meeting of Stockholders on March 15, 2024, the Company’s stockholders further approved an amendment to the LTIP to increase the annual share limit of common stock that may be issued only for the 2024 fiscal year under the LTIP from 8 % of the shares of common stock outstanding to 15 % of the shares of common stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP).

As of December 31, 2024, up to 6,777,743 shares of common stock are available for grants to participants under the LTIP.

A summary of activity related to restricted stock awards for the years ended December 31, 2024 and 2023 is presented below:

Weighted-Average Grant

Date Fair Value

Non-vested as of January 1, 2023

Non-vested as of December 31, 2023

Non-vested as of December 31, 2024

As of December 31, 2024, the unamortized compensation costs related to the unvested restricted stock awards was approximately $ 1,835,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 2.4 years.

Awards outstanding held by certain executives and all board of director members accelerated vesting as of the day of the DV Asset Acquisition which closed on December 31, 2024, due to the change of control provision in the grant agreements.

This resulted in the recognition of all of the remaining expense for these awards which was a total of $ 915,000 in the year ended December 31, 2024.

For the year ended December 31, 2024, 137,752 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of approximately $ 229,669 .

For the year ended December 31, 2023, 1,051 shares of common stock were issued upon vesting of outstanding restricted stock, pursuant to the LTIP with an intrinsic value of $ 25,000 .

Stock-Based Compensation, continued

2020 Stock Incentive Plan

A summary of activity related to restricted stock units under the Company’s 2020 Stock Plan for the years ended December 31, 2024 and 2023 is presented below:

Weighted-Average Grant

Date Fair Value

Non-vested as of January 1, 2023

Non-vested as of December 31, 2023

Non-vested as of December 31, 2024

As of December 31, 2024, the unamortized compensation costs related to the unvested restricted stock units under the Company’s 2020 Stock Plan was approximately $ 0 .

For the year ended December 31, 2024, 1 share of restricted stock units was released under the 2020 Stock Plan with an intrinsic value of less than $ 1,000 .

For the year ended December 31, 2023, 13 shares of restricted stock units were released under the 2020 Stock Plan with an intrinsic value of less than $ 1,000

Inducement Grant

On September 13, 2021, the Company issued 21 shares of restricted common stock to Eric Almgren, the Company’s Chief Strategist, as an inducement grant (“September 2021 Inducement Grant”).

As of December 31, 2024, all compensation cost related to the September 2021 Inducement Grant was expensed.

The Company recorded stock-based compensation of $ 185,000 related to this grant for year ended December 31, 2024.

On September 30, 2024, the Company issued 70,000 shares of restricted common stock at a fair value per share of $ 1.77 , to Stanley Mbugua, the Company’s Vice President of Finance, as an inducement grant (“September 2024 Inducement Grant”).

Due to the Company closing the acquisition of Data Vault on December 31, 2024, the September 2024 Inducement Grant vesting was fully accelerated due to the change in control the occurred.

The Company recognized $ 124,000 expense as a result.

As of December 31, 2024, there is no unamortized compensation cost related to the September 2024 Inducement Grant.

Stock-Based Compensation, continued

A summary of activity related to restricted stock units under the Company’s 2022 Plan for the year ended December 31, 2024 and 2023 is presented below:

Weighted-Average Grant

Date Fair Value

Non-vested as of January 1, 2023

Non-vested as of December 31, 2023

Non-vested as of December 31, 2024

As of December 31, 2024, the unamortized compensation cost related to the unvested restricted stock units was approximately $ 70,000 which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.5 years.

For the year ended December 31, 2024, 3 shares of restricted stock units were released under the 2022 Plan with an intrinsic value of less than $ 1,000 .

For the year ended December 31, 2023, 6 shares of restricted stock units were released under the 2022 Plan with an intrinsic value of less than $ 1,000 .

The domestic and foreign components of loss before provision for income taxes for the years ended December 31, 2024 and 2023 were as follows:

4 unchanged sentences

Total deferred provision for income taxes

Income Taxes, continued

Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets at December 31, 2024 and 2023 are presented below:

13 unchanged sentences

Net deferred tax assets

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Income Taxes, continued

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of the Company’s net deferred tax assets.

11 unchanged sentences

Such future limitations could result in the expiration of net operating losses and credit carryforwards before utilization as a result of such an ownership change.

Income Taxes, continued

Provision for income taxes for the years ended December 31, 2024 and 2023 differed from the amounts computed by applying the statutory federal income tax rate of 21 % to the loss before provision for income taxes as a result of the following:

4 unchanged sentences

Other permanent differences

Change in fair value of warrants

Change in valuation allowance

4 unchanged sentences

The tax position is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon ultimate settlement.

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2023 and 2022 are zero .

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2024 and 2023 is zero .

The Company has not incurred any material tax interest or penalties as of December 31, 2024.

5 unchanged sentences

As of December 31, 2024 and 2023, the Company has not accrued any penalties or interest related to uncertain tax positions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Commitments and Contingencies

10 unchanged sentences

the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Commitments and Contingencies, continued

The following table reflects our lease assets and our lease liabilities at December 31, 2024 and December 31, 2023 (in thousands):

19 unchanged sentences

Present value of capital lease obligations

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Commitments and Contingencies, continued

Lease Term and Discount Rate:

3 unchanged sentences

The discount rate was calculated by using the Company’s estimated incremental borrowing rate.

Commitments and Contingencies, continued

Other Information:

2 unchanged sentences

Operating cash outflows from operating leases

Finance Lease

During August 2020, the Company entered into a lease agreement for equipment under a capital lease with a term of 36 months .

The equipment under the lease is collateral for the agreement and is included within property and equipment, net on the consolidated balance sheets.

The lease expired in August 2023.

Management Team Retention Bonus

On September 1, 2022, the “Company adopted its Management Team Retention Bonus Plan (the “Retention Plan”), to incentivize certain management level employees (the “Managers”) to remain intact through and shortly following a potential “Change of Control” (as defined in the Retention Plan).

The aggregate Retention Plan bonus amounts for all Managers is $ 1,250,000 .

The Retention Plan provides that each Manager is eligible to receive a lump sum cash amount under the Retention Plan, on the earlier of the six-month anniversary of the date of a Change of Control or at the time of such Manager’s involuntary termination other than for “Cause” (as defined in the Retention Plan) or termination for “Good Reason” (as defined in the Retention Plan).

The Retention Plan will terminate upon the earlier of June 30, 2023 if a Change of Control has not occurred by such date or upon the payment of all Retention Bonus Amounts.

The Retention Plan expired on June 30, 2023 unused, and no accruals were made.

Contingencies

5 unchanged sentences

The Company’s management does not believe that any such matters, individually or in the aggregate, will have a materially adverse effect on the Company’s consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Related Parties

Nathaniel Bradley and EOS Holdings

Nathaniel Bradley, the Chief Executive Officer (“CEO”) of the Company, is a control person of EOS Holdings which became a related party of the Company at the close of the DV Asset Acquisition on December 31, 2024.

In addition, Sonia Choi, the Company’s Chief Marketing Officer is the spouse of the Company’s CEO and holds the position of Chief Marketing Officer of EOS Holdings, a related party of the Company.

EOS Holdings received 3,999,911 shares of common stock of the Company at the close of the transaction.

As described in Note 5 Borrowings, the Company owes $ 10 million DV Convertible Note to EOS Holdings, and EOS Holdings owes $ 431,000 in notes receivable to the Company, as of December 31, 2024.

The Company has recorded $ 7,000 in interest income on the notes receivable for the year ended December 31, 2024.

In addition to the DV Convertible Note and the Data Vault Note Balance, on January 16, 2025, the Company entered into a Transition Services Agreement (“Transition Services Agreement”) to receive from EOS Holdings, employees to provide transition services in connection with the Acquired Assets for a period of up to three months.

For the period from January 16, 2025 through March 27, 2025, the Company has paid $ 428,000 to EOS Holdings.

Helge Kristensen

6 unchanged sentences

At December 31, 2024 and 2023, Hansong Technology owed the Company approximately $ 24,000 and $ 4,000 , respectively.

Related Parties, continued

As of December 31, 2024 and December 31, 2023, Mr.

15 unchanged sentences

Howitt owned less than 1.0 % of the outstanding shares of the Company’s common stock.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

Segment Information

The Company has adopted ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures and has revised prior year disclosures to conform with the current year presentation.

The Company operates in one business segment.

Our chief decision-maker, the President and Chief Executive Officer, evaluates our performance based on company-wide consolidated results.

Operating segments have been identified based on the financial information utilized by the Company’s Chief Executive Officer, the chief operating decision maker (“CODM”).

The CODM uses net income as a measure of profitability to assess segment performance and deciding on how to allocate resources such as capital investments, share repurchases, and acquisitions.

The CODM does not use or receive total assets by segment to make decisions regarding resources;

therefore, the total asset disclosure by segment has not been included.

The following table reflects results of operations of the Company’s reportable segment (in thousands):

For the year ended

Cost of net revenue

Salaries, benefits, and stock based compensation expense

Other segment expenses

Depreciation and amortization expense

Interest expense, net

Income tax expense

Net revenue from customers is designated based on the geographic region to which the product is delivered.

5 unchanged sentences

Subsequent Events

2024 Bridge Note and Warrant

On January 22, 2024, the Company entered into securities purchase agreements with certain holders of Series B Preferred Stock Warrants, pursuant to which the Company agreed to issue to such holders promissory notes in the aggregate principal amount of $ 1,000,000 (the “2024 Bridge Promissory Notes”) and common stock purchase warrants (the “2024 Bridge Warrants”) to purchase up to an aggregate of 10,000,000 shares of the Company’s common stock at an exercise price of $ 0.1482 , in consideration for $ 600,000 .

Each of the 2024 Bridge Promissory Notes matures on the earlier to occur of:

(i) July 17, 2024, and (ii) the full or partial exercise of certain Series B Preferred Stock Warrants then held by the applicable holder, issuable for at least 9,322 shares of the Series B Preferred Stock upon such full or partial exercise.

Between January 26, 2024 and February 2, 2024, the 2024 Bridge Promissory Notes were paid back in full.

Conversion of Series B Preferred Stock

Between January 1, 2024 and March 27, 2024, holders of the Series B Preferred Stock converted 5,000 shares of Series B Preferred Stock into 1,205,690 shares of common stock.

February 2024 Unit Offering and Series B Preferred Stock Repurchase and Cancellation

On February 13, 2024, the Company completed a public offering (the “February 2024 Unit Offering”) of an aggregate of 23,734,000 units (the “February Units”) and 130,106,000 pre-funded units (the “February Pre-Funded Units”) for a purchase price of $ 0.065 per February Unit and $ 0.0649 per February Pre-Funded Unit, resulting in aggregate gross proceeds of approximately $ 10 million.

Each February Unit consists of (i) one share of common stock, and (ii) one warrant (the “February Warrants”) to purchase one share of common stock (the “February Warrant Shares”), at an exercise price of $ 0.065 per share.

Each February Pre-Funded Unit consists of (i) one pre-funded warrant (the “February Pre-Funded Warrants”) to purchase one share of common stock, and (ii) one February Warrant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023 and 2022

CSI Purchase Agreement Deposit

Pursuant to the CSI Purchase Agreement, on January 2, 2025, the Company paid a break-up fee to CSI of $ 1,000,000 by depositing the payment with the designated escrow agent.

The payment is being made in contemplation of the CSI Asset Acquisition.

Nathaniel Bradley Inducement

The Company granted Mr.

Bradley, effective January 2, 2025, an inducement award agreement (the “Inducement Award Agreement”), pursuant to which Mr.

Bradley was granted 1,200,000 units of restricted stock of the Company (the “Units”) as an inducement material to Mr.

Bradley’s entering into employment with the Company.

The Units were approved by the Board and granted outside of the Company’s 2020 Stock Incentive Plan and 2018 Long-Term Stock Incentive Plan in accordance with Nasdaq Listing Rule 5635(c)(4).

The Inducement Award Agreement contemplates half of the Units vesting in equal 3 -month installments over a 36 -month period beginning March 20, 2025, and the other half of the Units vesting upon the Company’s aggregate revenue equaling or exceeding $ 40 million over any trailing 12 calendar month period ending on or prior to the date that is 5 years from the grant date.

Registered Direct Transaction

On February 14, 2025 the Company closed an offering (the “February 2025 Offering”) pursuant to the securities purchase agreement (the “February 2025 Purchase Agreement”) with the investors (the “February 2025 Investors”).

In the February 2025 Offering, the Company issued and sold to the February 2025 Investors in a registered direct offering, (a) an aggregate of 4,757,126 shares of common stock, par value $ 0.0001 per share of the Company, and (b) common stock purchase warrants (the “February 2025 Warrants”, and together with the Shares, the “February 2025 Securities”) exercisable for an aggregate of up to 4,757,126 shares of common stock, at an exercise price of $ 1.14 per share (the “February 2025 Warrant Shares”) at a combined offering price of $ 1.14 per share and accompanying February 2025 Warrant, for aggregate gross proceeds of approximately $ 5.4 million.

As a result of the February 2025 Offering, the Company paid $ 407,000 of the proceeds to pay down the DV Convertible Note.

The February 2025 Warrants are immediately exercisable upon issuance and will expire on the fifth anniversary of the issuance date of the warrants.

The February 2025 Warrants may be exercised, in certain circumstances, on a cashless basis pursuant to the formula contained in the February 2025 Warrants.

The Securities issued in the registered direct offering and the February 2025 Warrant Shares issuable upon exercise of the February 2025 Warrants are being offered pursuant to the Company’s shelf registration statement on Form S-3 (File 333-267211) (the “Shelf Registration Statement”), initially filed by the Company with the SEC on September 1, 2022 and declared effective on September 13, 2022.

Obligations Under the Purchase Agreement

Under the February 2025 Purchase Agreement, the Company agreed, subject to certain exceptions, (i) not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of its shares of common stock or securities convertible into common stock until 30 days after the closing date of the February 2025 Offering, and (ii) not issue certain securities if the issuance would constitute a variable rate transaction for a period of 4 months from the closing date of the February 2025 Offering, in each case unless the Company is required to complete a financing prior to the applicable date in order to satisfy Nasdaq’s continued listing requirements.

Placement Agency Agreement

In connection with the February 2025 Offering, on February 13, 2025, the Company entered into a placement agency agreement (the “February 2025 Placement Agency Agreement”) with Maxim Group LLC (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as placement agent on a “reasonable best efforts” basis in connection with the February 2025 Offering.

Pursuant to the February 2025 Placement Agency Agreement, the Company agreed to pay the Placement Agent an aggregate fee equal to 7.0 % of the gross proceeds raised in the February 2025 Offering and reimburse the Placement Agent an amount up to $ 75,000 for expenses in connection with the February 2025 Offering.

The Company also issued the Placement Agent a private warrant (the “Placement Agent Warrant”) to purchase up to 5.0 % of the aggregate number of Securities sold in the February 2025 Offering, or warrants to purchase up to 475,713 shares of common stock (such shares, the “Placement Agent Warrant Shares”), at an exercise price equal to 125.0 % of the offering price per share of common stock and accompanying

Warrant, or $ 1.425 per share.

The Placement Agent Warrants will be exercisable 6 months after the commencement of sales in the February 2025 Offering and will expire on the five year anniversary of the initial exercise date.

Subsequent Events, continued

In addition, immediately following the February 2024 Unit Offering, on February 13, 2024, pursuant to letter agreements with certain holders of Series B Preferred Stock, the Company repurchased 62,657 outstanding shares of Series B Preferred Stock and cancelled 81,315 shares of Series B Preferred Stock Warrants to purchase up to 81,315 shares of Series B Preferred Stock, at a price of $ 6.3 million.

Between February 13, 2024 and March 14, 2024, all 130,106,000 February Pre-Funded Warrants were exercised resulting in the issuance of 129,968,679 shares of common stock.

February 14 Letter from Nasdaq

On February 14, 2024, the Company received the February 14 Letter from the Staff that the Staff had determined that as of February 14, 2024, the Company was in violation of the Low Priced Stocks Rule.

however, as of the date of this Report, the Panel has not yet rendered a decision.

There are no assurances that an extension will be granted or that a favorable decision will be obtained from the Panel.

March 2024 Special Meeting

At a special meeting of the Company’s stockholders held on March 15, 2024, the Company’s stockholders approved (a) a proposal to amend the Certificate of Incorporation to authorize the Company’s board of the directors to increase the Company’s share capital stock from 220,000,000 shares to 320,000,000 shares, of which 300,000,000 shares shall be common stock (the “Charter Amendment to Increase Authorized Shares”), (b) a proposal to amend the Certificate of Incorporation to authorize the board of the directors to effect a reverse stock split of all outstanding shares of common stock, by a ratio in the range of one-for- five to one-for-one hundred and fifty , to be determined in the sole discretion of the Company’s board of the directors, (c) the issuance of 20 % or more of the Company’s outstanding shares of common stock upon exercise of the New Common Stock Warrants issued to certain holders of the Series B Preferred Stock Warrants, for purposes of Rule 5635(d) of Nasdaq, (d) the issuance of 20 % or more of the Company’s outstanding shares of common stock upon exercise of the 2024 Bridge Warrants, for the purposes of Nasdaq Rule 5635(d), and (e) the amendment to the LTIP to increase the annual share limit of common stock that may be issued only for the 2024 fiscal year under the LTIP from 8 % of the shares of common stock outstanding to 15 % of the shares of common stock outstanding.

March 2024 Charter Amendment

On March 25, 2024, the Company filed a Charter Amendment to Increase Authorized Shares with the Secretary of State of the State of Delaware, which increased the number of authorized shares of capital stock from 220,000,000 shares to 320,000,000 shares, of which 300,000,000 shares are classified as common stock.

March 2024 Registered Direct Offering and Concurrent Private Placement

On March 26, 2024, the Company entered into a securities purchase agreement with certain purchasers, pursuant to which the Company issued and sold to such purchasers (i) 62,675,000 shares of common stock at a price of $ 0.03 per share and pre-funded warrants to purchase up to 14,001,478 shares of common stock, at an exercise price of $ 0.0001 per share, and (ii) common stock purchase warrants exercisable for an aggregate of up to 76,676,478 shares of common stock, at an exercise price of $ 0.04 per share, for aggregate gross proceeds of approximately $ 2.3 million.

February 26, 2025 RSA Grant to Employees, Directors and Officers

On February 26, 2025, the Company granted 6,145,000 RSA awards from the 2018 Plan to employees, directors and officers of the Company with a grant date fair value of $ 1.04 per share.

The award includes 2,155,000 performance-based grants to certain executives which will vest upon the achievement of revenue milestones with the remaining awards containing service-based vesting requirements and are earned in equal increments over the subsequent twelve quarters.

Share Exchange Agreement

On March 16, 2025, the Company, entered into a share exchange agreement (the “Share Exchange”) with NYIAX, Inc., a Delaware corporation (“NYIAX”), pursuant to which NYIAX shall exchange 900,000 shares of NYIAX’s common stock, par value $ 0.0001 per share, for aggregate consideration of up to 5,000,000 shares of common stock of the Company, par value $ 0.0001 per share.

The Share Exchange, as full consideration for the sale, assignment, transfer and delivery of the shares by NYIAX to the Company, the Company issued to NYIAX (i) 3,000,000 newly issued, fully paid and nonassessable shares of the Company’s common stock (the “Closing Shares”), and (ii) 2,000,000 newly issued, fully paid and nonassessable shares of the Company’s common stock (the “Additional Shares”).

The Closing Shares are issued in four equal quarterly tranches starting from the closing.

The Additional Shares shall be issued only upon completion of a complete advertising cycle for a third party clientele, and upon the parties’ mutual written agreement that the Adio Platform has been integrated into the NYIAX Platform upon completion of the advertising cycle.

The Additional Shares shall be issued within thirty ( 30 ) days from the completion of the integration.

The Share Exchange includes customary representations and warranties and various customary covenants and closing conditions that are subject to certain limitations, including, without limitation, certain agreements.

Intellectual Property Cross-License Agreement

In connection with the Share Exchange, on March 16, 2025, the Company, entered into a white label, co-marketing and intellectual property cross-license agreement (the “License Agreement”) with NYIAX, pursuant to which the Company received a non-exclusive license under certain of NYIAX’s jointly owned patent rights and know-how, and a non-exclusive license to white label NYIAX’s proprietary software-as-a-service advertising brokerage platform, all within the field of data, information and asset monetization and exchange.

In exchange, the Company granted to NYIAX a non-exclusive license under certain of the Company’s wholly owned patent rights, know-how and trademarks, including with respect to the Company’s Adio Platform, in the field of advertising buying, selling and brokerage.

Pursuant to the License Agreement, as consideration for the services provided by NYIAX pursuant to the License Agreement and the rights to access and use the NYIAX Platform granted to the Company, and upon the terms and subject to all of the conditions contained in the License Agreement, the Company shall issue to NYIAX 2,530,000 newly issued, fully paid and nonassessable shares (such shares, the “Consideration Shares”) of the Company’s common stock.

Pursuant to the License Agreement, in consideration of the rights granted to NYIAX under the License Agreement, NYIAX shall pay to the Company a license fee in the form of a convertible promissory note in the aggregate amount $ 2,500,000 (the “NYIAX Convertible Note”).

The NYIAX Convertible Note is due on the first anniversary of the closing.

NYIAX agreed to pay interest to the Company on the aggregate unconverted and then outstanding principal amount of the NYIAX Convertible Note at the rate of four percent ( 4 %) per annum, accruing from the closing.

The NYIAX Convertible Note may be prepaid in full at NYIAX’s election.

Subsequent Events, continued

The NYIAX Convertible Note will automatically convert at the earlier of (i) the maturity date, and (ii) the first underwritten public offering of NYIAX pursuant to an effective registration statement under the Securities Act, covering the offer and sale by NYIAX of its equity securities, as a result of or following which NYIAX shall be a reporting issuer under the Securities Exchange Act of 1934, as amended, and NYIAX common stock is listed on the Trading Market (as defined in the Convertible Note), at a conversion price of $ 2.00 per share.

The License Agreement includes customary representations and warranties and various customary covenants and closing conditions that are subject to certain limitations, including, without limitation, certain agreements.

Software Development Agreement

In connection with the Share Exchange, on March 16, 2025, the Company, entered into a software development agreement (the “Software Development Agreement”) with NYIAX, pursuant to which NYIAX has engaged the Company to develop certain software and provide certain additional professional services as the parties will agree under one or more statements of work.

The Software Development Agreement includes customary representations and warranties and various customary covenants and closing conditions that are subject to certain limitations, including, without limitation, certain agreements.

Second Amendment to the CSI Asset Purchase Agreement

As previously disclosed, on December 19, 2024, the Company entered into an asset purchase agreement, as amended by that certain amendment to the asset purchase agreement, dated as of December 30, 2024 (the “CSI Asset Purchase Agreement”), with CSI, pursuant to which the Company has agreed to purchase, assume and accept from CSI all of the rights, title and interests in, to and under the assets and interests used in the acquired business and products and services solely to the extent they utilize the transferred assets, including CSI’s customer contracts, trademarks, and other intellectual property.

On February 25, 2025, the Company and CSI entered into a second amendment to the CSI Asset Purchase Agreement (the “Second Amendment”).

Pursuant to the second amendment, the closing cash consideration was reduced to $ 5,000,000 and as consideration, the parties agreed to a payment at Closing of $ 5,000,000 payable in the form of the convertible note (the “CSI Initial Convertible Note”).

The Company will issue the CSI Initial Convertible Note in an aggregate principal amount of $ 5,000,000 , due on the second anniversary of the closing.

The Company agreed to pay interest to CSI on the aggregate unconverted and then outstanding principal amount of the CSI Initial Convertible Note at the rate of ten percent ( 10 %) per annum.

If the CSI Initial Convertible Note has not been satisfied in full within three ( 3 ) months after the closing date, then at CSI’s option, it shall be convertible to common stock of the Company, par value $ 0.0001 per share, in increments of $ 500,000 , at a price of $ 1.14 per share.

The Company shall also repay the principal amount and all accrued interest under the CSI Initial Convertible Note in full, without a penalty, within three ( 3 ) business days after the Company raises an additional amount of capital totaling at least $ 15,000,000 , after the Company shall have closed an initial offering or financings resulting in aggregate gross proceeds to the Company of at least $ 15,000,000 , from one or more investors and/or financial institutions, by no later than March 31, 2025.

The parties agreed that the Company will inform the stockholders of the Company of the receipt of the Stockholder Consent (as defined in the Asset Purchase Agreement) by preparing and filing with the U.S.

Securities and Exchange Commission (“SEC”), within two ( 2 ) business days after the Company files its Annual Report on Form 10-K, an information statement with respect thereto.

The parties further agreed that, at closing, the Company will deliver to CSI $ 500,000 as reimbursement of certain audit, review, reporting, legal, and other closing costs and expenses CSI has incurred and will incur associated with the closing.

Pursuant to the Second Amendment, the parties will instruct the escrow agent to release the Breakup Fee of $ 1,000,000 from the escrow account and pay it to CSI within three ( 3 ) business days from the execution of the Second Amendment.

Issuance of Senior 10 % Original Issue Discount Convertible Promissory Notes

The Company has entered into a securities purchase agreement (the “March 2025 Purchase Agreement”), dated March 31, 2025, with a certain investor (the “March 2025 Investors”), relating to the issuance of senior secured convertible notes in the aggregate principal amount of $ 16,666,665 (collectively, the “March 2025 Notes”).

On the initial closing date, the Company will issue a note in the principal amount of $ 5,555,555 (the “March 2025 Initial Note”) with the initial warrants for an aggregate subscription amount of $ 5,000,000 .

On or after the date that is 20 calendar days after the mailing by the Company of a Definitive Information Statement on Schedule 14(c) with respect to approval, by written consent of the stockholders of the Company, of the issuance of the shares of common stock issuable upon conversion of the March 2025 Notes, the Company will issue the March 2025 Investor an additional March 2025 Note in the principal amount of $ 11,111,110 and the additional warrants with an aggregate subscription amount of $ 10,000,000 .

In a concurrent private placement, the purchasers agreed to purchase from the Company common stock purchase warrants (“March 2025 Warrants”) to purchase up to 19,346,101 shares of common stock of the Company, par value $ 0.0001 per share, of which Warrants to purchase up to 6,448,700 shares of common stock will be issued in connection with the issuance of the March 2025 Initial Note (the “March 2025 Initial Warrants”) and Warrants to purchase up to 12,897,401 shares of common stock will be issued in connection with the issuance of the March 2025 Additional Notes (the “March 2025 Additional Warrants”).

In connection with the March 2025 Purchase Agreement, the Company entered into a Placement Agency Agreement with Maxim and agreedto pay 8 % of the proceeds received from the sale of the March 2025 Notes and warrants as fees.

The total fees to Maxim are estimated to be $ 1,200,000 .

The March 2025 Warrants will have an initial exercise price of $ 0.8615 per share.

The March 2025 Initial Warrants will be exercisable upon effectiveness of Stockholder Approval and expire five (5) years from the date of such effectiveness.

The March 2025 Additional Warrants will be issued in the Additional Closing, exercisable immediately upon issuance and expire five (5) years from the date of issuance.

The exercise price of the March 2025 Warrants is subject to (a) downward adjustment in the event the Company issues shares of common stock or common stock equivalents having an effective price lower than the then current exercise price of the March 2025 Warrants, subject to certain exceptions and (b) standard, proportional adjustments in the event of certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate changes.

The March 2025 Warrants contain 4.99 / 9.99 % beneficial ownership limitations.

The March 2025 Notes carry a 10 % original issue discount, and have a term of 18 months from the original issuance date.

No interest accrues during the term of the March 2025 Notes, unless an event of default occurs, in which case interest will accrue at a rate of 12 % per annum or, if less, the highest amount permitted by law.

The Company’s obligations under these March 2025 Notes rank senior to all other existing indebtedness and equity of the Company.

Holders of the March 2025 Initial Notes can convert the March 2025 Initial Notes into shares of common stock any time after the date of effectiveness of stockholder approval and holders of the March 2025 Additional Notes can convert the March 2025 Additional Notes into shares of common stock any time after issuance.

Holders of any March 2025 Notes can convert such March 2025 Notes into shares of common stock by providing a conversion notice.

The March 2025 Notes are convertible at any time beginning on the date of Stockholder Approval at the option of the holders thereof, in whole or in part, into such number of shares of common stock at an initial conversion price equal to $ 1.00 per share (the “Conversion Price”).

Alternatively, the March 2025 Notes are convertible at a price (the “Alternate Conversion Price”) equal to the greater of (x) the Floor Price (as defined below) and (y) 90 % of the lowest volume weighted adjusted price of the shares of Common Stock (the “VWAP”) in the ten (10) trading days prior to the applicable conversion date (“Alternate Conversions”).

The conversion price cannot fall below the floor price, which is set at $ 0.1794 per share of Common Stock.

If the conversion price is lower than the floor price at the time a conversion notice is received, shares of common stock will be issued based on the floor price, and we will compensate the holder for any economic difference by adding such value back to the principal of the March 2025 Note.

The economic difference is determined as the product of (i) the VWAP on the day the holder delivers the applicable conversion notice numbers of and (ii) the difference obtained by subtracting (a) the number of shares of common stock or to be delivered to the holder pursuant to the exercise notice and (b) the quotient obtained by dividing (x) the applicable conversion amount, by (y) the applicable alternative conversion price.

Under the Notes, the Company is required to use up to 30 % of the proceeds from future financings to redeem the Notes in an amount equal to the aggregate principal amount of the Notes being redeemed from such proceeds multiplied by 105 %.

The holder of each March 2025 Note does not have the right to convert any portion of the March 2025 Note if, upon conversion, the holder and any other attribution parties would collectively beneficially own more than 4.99 % (the “Maximum Percentage”) of our outstanding shares of common stock immediately after giving effect to such conversion.

The holder may increase or decrease the Maximum Percentage to any amount not exceeding 9.99 % by providing us with written notice.

However, (i) any increase in the Maximum Percentage will not take effect until the 61 st day after such notice is delivered to the Company, and (ii) any adjustment to the Maximum Percentage will apply only to the holder and the other attribution parties.

In connection with the March 2025 Purchase Agreement, the Company entered into the Subsidiary Guarantee in which the Company jointly, and severally, unconditionally and irrevocably, guarantee all obligations under the March 2025 Notes.

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-K

Item 9A. Controls and Procedures