What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-19 · 345 added, 271 removed, 168 unchanged (79% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

Current assets

Cash and cash equivalents

Accounts receivable, net of allowance of doubtful accounts of $ 0 and $ 312,983 as of September 30, 2024 and December 31, 2023, respectively

Inventories, net

Prepaid expenses and other current assets

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Operating lease right-of-use assets, net

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

Accounts payable

Other payables and accrued expenses

Current maturities of operating lease liabilities

Accrued expenses

Due to related party

Total current liabilities

Operating lease liabilities, less current maturities

Total liabilities

Commitments and Contingencies (Note 6)

Stockholders’ equity (deficit)

Stockholders’ deficit

Preferred Stock, authorized:

10,000,000 shares at $ 0.001 par value;

2,000,000 shares issued and outstanding

shares at $ 0.001

issued and outstanding:

shares at March 31, 2025 and December 31, 2024

Common Stock, authorized:

60,000,000 shares at $ 0.01 par value;

shares at $ 0.01

issued and outstanding:

3,557,581 shares at September 30, 2024 and 2,632,809 shares at December 31, 2023 respectively

shares at March 31, 2025 and December 31, 2024 respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

Total stockholders’deficit

Total liabilities and stockholders’ deficit

See accompanying notes to the unaudited condensed consolidated financial statements.

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Three Months Ended

Nine Months Ended

September 30,

Cost of goods sold

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Research and development

Vendor liability forgiveness, net of asset transfers

Vendor liability forgiveness, net of asset transfers (Note 7)

Total operating expenses

Operating loss

Other income (expense):

Interest income (expense), net

Total other income (expense)

Other expense:

Interest (expense), net

Total other (expense)

Loss before income taxes

Income tax expense (benefit)

Net loss per share:

Income tax benefit

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Basic and diluted

Basic and diluted weighted average common and common equivalent shares

See accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (deficit)

For the Nine months ended September 30, 2024

Condensed Consolidated Statements of

Stockholders’ (Deficit) Equity

For the three months ended March 31, 2025

Preferred Stock

Stockholders’

Balance at December 31, 2024

Preferred stock issuance

Issuance of warrants

Common stock issued

Stock-based compensation

Balance at March 31, 2025

Balance at June 30, 2024

Stock-based compensation

Balance at September 30, 2024

For the Nine months ended September 30, 2023

For the three months ended March 31, 2024

Preferred Stock

Stockholders’

Balance at December 31, 2023

Common stock issued for vested restricted units

Preferred stock issuance

Issuance of warrants

Stock-based compensation

Balance at March 31, 2024

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at June 30, 2023

Common stock issued for vested restricted stock units

Stock-based compensation

Balance at September 30, 2023

See accompanying notes to unaudited condensed consolidated financial statements.

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

Cash flows used in operating activities:

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Amortization of right-of-use assets

Amortization of debt issuance costs

Non-cash interest expense

Stock based compensation

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Accrued expenses

Deferred revenue

Due to related party

Operating lease liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

Purchases of equipment

Certification costs capitalized

Net cash used in investing activities

Cash flows from financing activities:

Net payment on the bank credit line

Proceeds from preferred stock issuance

Proceeds from common stock issuance

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Proceeds from debt

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - Beginning

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Cash paid during the period for:

Cash is reported on the condensed consolidated statements of cash flows as follows:

Cash and cash equivalents

Total cash, cash equivalents and restricted cash

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Notes to Condensed Consolidated Financial

(1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

and its wholly owned subsidiaries, MME Sub 1 LLC, Cadence Connectivity, Inc., MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “Minim” or the “Company”.

The Company support and services intelligent networking products that reliably and securely connect homes and offices around the world that it previously sold.

We were the exclusive global license holder to the Motorola brand for home networking hardware until 2023.

The Company supports and services products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh home networking devices.

Our AI-driven cloud software platform and applications make network management and security simple for home and business users, as well as the service providers that assist them— leading to higher customer satisfaction and decreased support burden.

(formerly, Minim,

Inc.) was founded in 1977 as a networking company and pivoted into delivering intelligent software to protect and improve the WiFi connections

we depend on to work, learn, and live.

FiEE held the exclusive global license to design, manufacture, and sell consumer networking products

under the Motorola brand until 2023.

Our cable and WiFi products, with an intelligent operating system and bundled mobile app, were sold

in leading retailers and e-commerce channels in the United States (“U.S.”).

Our AI-driven cloud software platform and applications

make network management and security simple for home and business users, as well as the service providers that assist them— leading

to higher customer satisfaction and decreased support burden.

(formerly, Minim,

Inc.) and its wholly owned subsidiaries, FiEE (HK) Limited, which was incorporated in March 2025, MTRLC LLC, and Minim Asia Private Limited,

are herein collectively referred to as “FiEE” or the “Company”.

The Company delivered

intelligent networking products that reliably and securely connected homes and offices around the world.

We were the exclusive global

license holder to the Motorola brand for home networking hardware until 2023.

The Company designed and manufactured products including

cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh

home networking devices.

Our AI-driven cloud software platform and applications made network management and security simple for

home and business users, as well as the service providers that assisted them.

We continue to grow and

expand our operations a digital service provider focused on integrating artificial intelligence and data analytics into content

creation and brand management.

We offer a range of SaaS solutions designed to support our clients in

developing, managing, and optimizing their digital presence across global platforms, including customized graphic and posts, short

videos, and editorial calendars aligned with brand goals.

We provide digital content management

solutions and brand growth strategies primarily through three service verticals:

(1) digital account management, (2) content operations

and growth analytics, and (3) community engagement and creator partnerships.

These services are structured to support clients at varying

stages of digital development, from initial account setup to multi-platform brand promotion.

On February 27, 2025,

the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated Certificate

of Incorporation (the “Certificate of Amendment”) to change the name of the Company from Minim, Inc.

to FiEE, Inc., effective

as of February 27, 2025.

Basis of Presentation

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The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The results of the Company’s operations can vary during each quarter of the year.

Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods.

On April 17, 2023, the Company effected a 25:1 reverse stock split for each share of common stock issued and outstanding.

All shares and associated amounts have been retroactively restated to reflect the stock split.

The Company’s operations have historically been financed through the issuance of common stock and borrowings.

Since inception, the Company has incurred significant losses and negative cash flows from operations.

During the nine months ended September 30, 2024, the Company incurred a net loss of $4.4 ( 4,371,934 ) million, and used cash from operations of $3.8 ( 3,783,080 ) million, which was offset by $3.3 3,265,482 million in cash provided from financing activities.

As of September 30, 2024, the Company had an accumulated deficit of $96.8 ( 96,840,712 ) million and cash and cash equivalents of $0.2 191,724 million.

The Company will continue to monitor its costs in relation to its sales and adjust its cost structure accordingly.

Management of the Company believes it will not have sufficient resources to continue as a going concern through at least one year from the issuance of these financial statements.

Merger Agreement with e2 Companies, LLC

On March 12, 2024, the “Company”, and its wholly owned subsidiary, MME Sub 1 LLC, a Florida limited liability company (“Merger Sub”), formed in March 2024, entered into an Agreement and Plan of Merger (“Merger Agreement”) with e2Companies LLC, a Florida limited liability company (“e2Companies”).

The Merger Agreement did not close by the end date, and as such, by the terms of the agreement,

in July 2024 it terminated of its own accord.

The results of the Company’s

operations can vary during each quarter of the year.

Therefore, the results and trends in these interim financial statements may not be

the same as those for the full year or any future periods.

The Company’s

operations have historically been financed through the issuance of common stock and preferred stock.

Since inception, the Company

has incurred significant losses and negative cash flows from operations.

During the three months ended March 31, 2025, the

Company incurred a net loss of $374 ( 373,910 )

thousand, and used cash from operations of $371 ( 371,058 )

thousand, which was offset by $350 350,000

thousand in cash provided from financing activities.

As of March 31, 2025, the Company had an accumulated deficit of $97 97,066,966

million and cash and cash equivalents of $9 9,104 thousand.

The Company will continue to monitor its costs in relation to its sales

and adjust its cost structure accordingly.

Non-binding Letter of Intent

On March 25, 2025,

the Company entered into a non-binding letter of intent (“LOI”) with Hongyan Sun and Lin Lin (collectively, the

“Sellers”), pursuant to the terms of which the Sellers will transfer 100% of their equity interests in Suzhou Yixuntong

Network Technology Co., Ltd.

(the “Target Company”) to the Company (the “Potential Transaction”) for a

purchase price not to exceed $2,000,000.

The Company shall make a prepayment of $300,000 to the Sellers upon the signing of the LOI

and the prepayment had not been paid as of March 31, 2025.

Upon the signing of this LOI,

the Target Company and the Sellers (i) have granted the access of the Target Company’s service ports to the Company;

(ii) have connected

the Company to the Target Company’s Software as a Service platform;

(iii) and is working with the Company to ensure it can carry

out the Multi-Channel Network business in the second quarter of 2025.

The Potential Transaction

is subject to the Company’s satisfactory completion of legal, tax, financial, operation, human resources and administration, and

environmental due diligence of Target Company and such other due diligence as the Company may deem necessary.

The Company and the Sellers

expect to complete the Potential Transaction as soon as reasonably practicable, but in no event later than six (6) months after signing

of the LOI (the “Long-Stop Date”).

The Sellers have agreed that that, from the date of the LOI through the Long-stop Date,

or the date when the Company informs the Sellers that the exclusivity expires, whichever occurs earlier, the Sellers shall refrain, directly

or indirectly from (i) soliciting offers from third parties to acquire Target Company and/or its business, and from offering Target Company

or its business to any person, firm, group or corporation other than the Company;

and (ii) entering into any agreement aimed at selling

or otherwise transferring Target Company or the business or that may otherwise prevent the parties from consummating the Potential Transaction.

The Company expects to announce

additional details regarding the Potential Transaction if and when a definitive agreement is executed.

No assurances can be made that

the Company will successfully negotiate and enter into a definitive agreement with respect to the Potential Transaction, or that the Potential

Transaction will be consummated on the terms or timeframe currently contemplated, or at all.

Any transaction is subject to board and shareholder

holder approval of the Company, regulatory approvals and other customary conditions.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023.

The Company’s significant accounting policies did not change during the nine months ended September 30, 2024.

The Company’s significant

accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s significant

accounting policies did not change during the three months ended March 31, 2025.

Recently Issued Accounting Standards

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

Improvements to Income Tax Disclosures (“ASU 2023-09”).

This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures.

This update is required to be effective for the Company for fiscal periods beginning after December 15, 2025.

The Company is evaluating the effect that ASU 2023-09 will have on its financial statements and disclosures.

The FASB also issued ASU 2023 - 07:

Segment Reporting Topic 280 - Improvements to Reportable Segment Disclosures.

This update requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

This update will be effective for fiscal years beginning after December 15, 2024, and is to be applied retrospectively to all periods presented in the financial statements.

Early adoption is permitted.

The Company is evaluating the effect that ASU 2023 - 07 will have on its financial statements and disclosures and believes it will not have a material impact on the Company’s consolidated financial statements.

On March 21, 2024, the FASB issued Accounting Standards Update (ASU) 2024 - 01, Compensation—Stock Compensation (Topic 718 ):

Scope Application of Profits Interest and Similar Awards, which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC Topic 718, Compensation — Stock Compensation .

This update will be effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted and is treated either retrospectively or prospectively.

The Company believes it will not have a material impact on the Company’s consolidated financial statements.

There have been no other new

accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations

and cash flows .

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

Revenue recognized for each distinct performance obligation as control is transferred to the customer.

Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the customer.

The transaction price allocated to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a three-year period that the Company has estimated based on the expected replacement of the hardware.

Revenue recognized for each distinct

performance obligation as control is transferred to the customer.

Revenue attributable to hardware products bundled with Software-as-a-Service

(“SaaS”) offerings are recognized at the time control of the product transfers to the customer.

The transaction price allocated

to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a period of one

to three years that the Company has estimated based on the expected replacement of the hardware.

Transaction Price Allocated to the Remaining Performance Obligations

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The Company records accounts receivable when it has an unconditional right to the consideration.

The Company did no t have contract liabilities at September 30, 2024 and December 31, 2023.

The Company did no t have contract liabilities at March 31, 2025 and December 31, 2024.

Disaggregation of Revenue

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Other online and offline channels

The following table sets forth our revenues by product:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cable modems & gateways

1 unchanged sentence

(4) BALANCE SHEET COMPONENTS

Inventories, net consists of the following:

Schedule of inventories

September 30,

Work in process

Finished goods

The Company did no t have consigned inventory held by our customers or in-transit inventory at September 30, 2024 and December 31, 2023.

The Company reviews inventory for obsolete and slow-moving products each quarter and makes provisions based on its estimate of the probability that the material will not be consumed or that it will be sold below cost.

The inventory reserves were $ 0 million and $ 1.7 million as of September 30, 2024 and December 31, 2023, respectively.

Accrued expenses

Accrued expenses consist of the following:

Other payables and accrued expenses

Other payables and accrued

expenses consist of the following:

Schedule of accrued expenses

September 30,

Payroll & related benefits

3 unchanged sentences

Sales and use tax

Franchise tax fees

Total accrued other expenses

(5) BANK CREDIT LINES AND GOVERNMENT LOANS

Bank Credit Line

On March 12, 2021, the Company terminated its Financing Agreement and entered into a loan and security agreement with Silicon Valley Bank (the “SVB Loan Agreement”).

On November 1, 2021, the Company entered into the first amendment to the SVB Loan Agreement (the “First Amendment”).

The SVB Loan Agreement, as amended, provides for a revolving facility up to a principal amount of $ 25.0 million.

The borrowing base equals the sum of (a) 85.0 percent of eligible customer receivables, plus (b) the least of (i) 60 percent of the value of eligible inventory (valued at cost), (ii) 85% of the net orderly liquidation value of inventory, and (iii) $6.2 million in each, as determined by SVB from the Company’s most recent borrowing base statement;

provided that SVB has the right to decrease the foregoing percentages in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the collateral or its value.

The SVB Loan Agreement is secured by substantially all of the Company’s assets but excludes the Company’s intellectual property.

Loans under the credit facility bear interest at a rate per annum equal to (i) at all times when a streamline period is in effect, the greater of (a) one-half of one percent (0.50%) above the Prime Rate or (b) three and three-quarters of one percent (3.75%) and (ii) at all times when a streamline period is not effect, the greater of (a) one percent (1.0%) above the Prime Rate and (b) four and one-quarter of one percent (4.25%).

On December 12, 2022, the Company entered into its second Amendment to the SVB Loan Agreement (the “Second Amendment”).

The Second Amendment (i) reduced the aggregate amount available under the revolving credit line from $ 25 million to $ 10 million, (ii) extends maturity to January 15, 2024, and (iii) provides a waiver for an existing default under the SVB Loan Agreement by virtue of the Company having entered into a Bridge Loan and Security Agreement dated as of November 23, 2022 by and among Borrower and Slingshot Capital, LLC, under which Borrower incurred certain Indebtedness and granted a Lien to Slingshot Capital.

The Company incurred $ 143 thousand in origination costs in connection with entering into the SVB Loan Agreement.

These origination costs were recorded as a debt discount and are being expensed over the remaining term of the facility.

Amortization of debt issuance costs was $ 0 thousand and $ 8 thousand for the three months ended September 30, 2024 and 2023, respectively.

Amortization of debt issuance costs was $ 0 thousand and $ 29 thousand for the nine months ended September 30, 2024 and 2023, respectively.

On October 18, 2023, the Company paid in full the outstanding balance and immediately terminated the SVB Loan Agreement.

As of September 30, 2024 and December 31, 2023, the Company had $ 0 outstanding under the SVB Loan Agreement.

The SVB Loan Agreement included a minimum interest expense of $ 20 thousand per month.

The First Amendment required the Company to maintain certain levels of minimum adjusted EBITDA, which were tested on the last day of each calendar quarter and measured for the trailing 3-month period ending on the last day of each quarter.

The Second Amendment removed the minimum EBITDA covenants.

In addition, pursuant to the SVB Loan Agreement, the Company cannot pay any dividends without the prior written consent of SVB.

On November 30, 2022 (the “Effective Date”), the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a bridge loan in the principal amount up of up to $ 1,500,000 .

In conjunction with the Bridge Loan Agreement, the Company executed a bridge term note (the “Bridge Term Note”) in favor of Slingshot Capital.

The Company has drawn down $ 1,000,000 under the Bridge Loan Agreement.

Subject to Slingshot Capital’s sole discretion, the other $ 500,000 may be drawn by the Company.

Principal amounts borrowed under the Bridge Loan Agreement bear interest of 8.00 % per annum for the period from the Effective Date until February 28, 2023.

Unpaid principal after February 28, 2023 bear an interest of 14.00 % per annum until paid in full.

In the event of default, all outstanding principal and interest shall bear interest at an annual rate of 18 % .

In connection with the Bridge Loan Agreement, the Company, Slingshot Capital, and Silicon Valley Bank (the “Senior Lender”) executed a subordination agreement (the “Subordination Agreement”) on November 30, 2022.

The Loan Agreement is subordinated to the outstanding indebtedness and obligations under the Company’s senior credit facility.

Subject to the Senior Lender’s written consent, the Company shall grant Slingshot Capital a second-priority security interest in all of the Company’s collateral, which shall be subordinated to any and all security interests granted to the Senior Lender and at all times shall be limited to the same collateral granted to the Senior Lender under the senior credit facility.

Principal and interest are not due and payable until the maturity date, which is January 15, 2024, unless the Company’s senior credit facility with the Senior Lender is paid in full in cash on an earlier date.

The Company reimbursed Slingshot Capital $ 20,000 for its reasonable and documented expenses and fees related to the negotiations, documentation, and execution of the Bridge Loan Agreement, Subordination Agreement, and Bridge Term Note.

On December 6, 2023, the Company and Slingshot Capital entered into a Debt Conversion Agreement (“Conversion Agreement”) pursuant to which the Company agreed to issue 734,343 shares of the Company’s common stock (based on $ 1.533 per share) (the “Shares”) in exchange for the cancellation of a total principal amount of $ 1,000,000 (“Principal Amount”) outstanding under the Bridge Loan Agreement and Bridge Term Note (collectively, the “Loan Agreements”), with Slingshot Capital, plus $ 125,778 in accrued and unpaid interest on such Principal Amount as of December 6, 2023.

The price per share used in the exchanged was determined by the weighted average price per share and trade volume on September 13, 2023 and November 28, 2023.

Slingshot Capital is owned by the Company’s former Chairperson of the Board and a former Board of Director, Jeremy Hitchcock and Elizabeth Hitchcock, respectively.

The Company had entered into agreements

to lease certain office space as well as its former warehouses and distribution centers under operating leases.

In May 2020, the

Company signed a two-year lease agreement for 3,218 square feet of office space at 275 Turnpike Executive Park in Canton, MA.

On December 1,

2021, the Company executed an amendment to extend the lease from June 2022 to May 2024 with monthly payments of approximately

As of September 30, 2024, the Company’s leased office space has terminated and was not renewed.

The Company recognizes lease expense

for these leases on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and lease liabilities are recorded

on the balance sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease costs were as follows:

Vendor contingent payments (Note 6)

Rental Fee and Security Deposit

Contract liabilities

Total other payables and accrued expenses

The Company previously had entered into agreements to lease certain office space as well as its former warehouses and distribution centers under operating leases, which have been expired.

Following the expiration, the Company’s newly established Hong

Kong subsidiary in February 2025 executed new office lease agreements.The Company recognizes lease expense for these leases

on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance

sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease liabilities

were as follows:

Schedule of components of lease costs

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating lease costs

Short-term lease costs

Total lease costs

Current operating lease liabilities

Long-term operating lease liabilities

Total lease liabilities

The weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted average remaining lease term and discount rate

September 30,

Three Months Ended

Operating leases:

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Schedule of supplemental cash flow information related to operating leases

Nine Months Ended

September 30,

Three Months Ended

Operating cash flow information:

2 unchanged sentences

ROU asset obtained in exchange for lease liability

As of September 30, 2024, the Company does not have future lease payments after its office lease expired in May 2024.

( 6) COMMITMENTS AND CONTINGENCIES

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Following the Company’s agreement with Motorola Mobility LLC on January 22, 2024, the Company’s quarterly royalty payments, in addition to current and future obligations, were satisfied in exchange for certain assets of the Company.

Royalty expense under the License Agreement amounted to $ 0 million and $ 1.7 million for the three months ended September 30, 2024 and 2023, respectively, and $ 0 million and $ 5.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The royalty expense is reported in selling and marketing expense on the accompanying condensed consolidated statements of operations.

The Company did not incur

royalty expenses under the License Agreement for the three months ended March 31, 2025 and 2024.

On January 22, 2024, the Company, entered into a Letter Agreement re Product Purchase (the “Letter Agreement”) and a Debt Settlement Agreement (the “Settlement Agreement,” and the Letter Agreement, the “Agreements”) with Motorola Mobility, LLC (“Motorola”).

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(b) Vendor Obligation Releases

In its efforts to manage its liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023 who comprised $ 5.0 million of outstanding accounts payable as of December 31, 2023.

In aggregate, the executed release agreements resulted in a reduction of outstanding accounts payable obligations by $3.6 million from $5.0 million to $1.4 million.

The executed release agreements became effective and are contingent upon payment of the $ 1.4 million negotiated amounts received during the period of Q1 2024.

In addition, the Company agreed to pay certain vendors an additional $ 0.4 million contingent upon successful collection of customer receivables.

After the collection of customer receivables, the contingent amount was amended to $ 0.3 million during the period ended September 30, 2024.

In July 2024, the Company paid the contingent amount of $ 0.3 million to its vendors.

In its efforts to manage its

liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023 who

comprised $ 5.0 million of outstanding accounts payable as of December 31, 2023.

In aggregate, the executed release agreements resulted

in a reduction of outstanding accounts payable obligations by $3.6 million from $5.0 million to $1.4 million.

The executed release agreements

became effective and are contingent upon payment of the $ 1.4 million negotiated amounts received during the period of Q1 2024.

the Company agreed to pay certain vendors an additional adjusted $ 0.3 million contingent upon successful collection of customer receivables.

As of March 31, 2024, the contingent amount had not been paid and is accounted in accrued expenses on the accompanying condensed

consolidated balance sheets.

In July 2024, the Company paid the contingent amount

of $ 0.3 million to its vendors.

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If there is a reasonable possibility that a loss may be incurred, the Company discloses the estimate of the amount of the loss or range of losses - that the amount is not material, or that an estimate of the loss cannot be made.

At September 30, 2024, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

At March 31, 2025, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

The Company expenses its legal fees as incurred.

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However, the Company is unable to predict the outcome of these matters.

(8) SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS

Relatively few companies account for a substantial portion of the Company’s revenues.

In the three months ended September 30, 2024, the Company did not have sales or outstanding accounts receivable balance that accounted for 10% of greater individually of the Company’s total net sales and accounts receivable, respectively.

In the three months ended September 30, 2023, two companies, including a marketplace facilitator, accounted for 10% or greater individually and 80 % in the aggregate of the Company’s total net sales.

At September 30, 2023, two companies with an accounts receivable balance of 10% or greater individually accounted for a combined 87 % of the Company’s accounts receivable.

The Company’s customers generally do not enter into long-term agreements obligating them to purchase products.

The Company may not continue to receive significant revenues from any of these or from other large customers.

A reduction or delay in orders from any of the Company’s significant customers, or a delay or default in payment by any significant customer could materially harm the Company’s business and prospects.

Because of the Company’s significant customer concentration, its net sales and operating income could fluctuate significantly due to changes in political or economic conditions, or the loss, reduction of business, or less favorable terms for any of the Company’s significant customers.

The Company participates in the PC peripherals industry, which is characterized by aggressive pricing practices, continually changing customer demand patterns and rapid technological developments.

The Company’s operating results could be adversely affected should the Company be unable to successfully anticipate customer demand accurately;

manage its product transitions, inventory levels and manufacturing process efficiently;

distribute its products quickly in response to customer demand;

differentiate its products from those of its competitors or compete successfully in the markets for its new products.

The Company depends on many third-party suppliers for key components contained in its product offerings.

For some of these components, the Company may only use a single source supplier, in part due to the lack of alternative sources of supply.

During the three months ended September 30, 2024, the Company did not have any concentration of suppliers.

During the three months ended September 30, 2023, the Company had one supplier that provided 100 % of the Company’s purchased inventory.

(9) INCOME TAXES

During the three and nine months ended September 30, 2024, we recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated due to the uncertainty of realizing a benefit from those items.

We have evaluated the positive and negative evidence bearing upon the Company’s ability to realize its deferred tax assets, which primarily consist of net operating loss carryforwards and research and development tax credits.

We considered the history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and we have concluded that it is more likely than not that we will not realize the benefits of our deferred tax assets.

As a result, as of September 30, 2024 and December 31, 2023, we recorded a full valuation allowance against our net deferred tax assets.

As of September 30, 2024 and December 31, 2023, the Company had federal net operating loss carry forwards of approximately $ 79.4 million and $ 76.9 million, respectively, which are available to offset future taxable income.

They are due to expire in varying amounts from 2025 to 2042.

Federal net operating losses occurring after December 31, 2018, of approximated $ 38.5 million may be carried forward indefinitely.

As of September 30, 2024 and December 31, 2023, the Company had state net operating loss carry forwards of approximately $ 48.0 million and $ 44.9 million, respectively, which are available to offset future taxable income.

They are due to expire in varying amounts from 2033 through 2041.

We recorded minimum state income taxes and taxes related to our operations in Mexico.

For the three months ended September 30, 2024 and 2023, income tax expense was $0 - thousand and $24 ( 525 ) thousand, respectively.

For the nine months ended September 30, 2024 and 2023, income tax expense (benefit) was $(11) ( 11,216 ) thousand and $24 24,451 thousand, respectively.

(7) SIGNIFICANT CUSTOMERS AND DEPENDENCY ON KEY SUPPLIERS

During the three months ended

March 31, 2025, the Company had 1 new customer upon launching our SAAS product on March 28, 2025.

As of April 30, 2025, the number

of our customers was 39 .

As of April 30, 2025, prepaid subscription fees received from customers for our SaaS service amounted to $ 203

During the three months ended

March 31, 2024, two companies, including a marketplace facilitator, accounted for 10% or greater individually and 100 % in the aggregate

of the Company’s total net sales.

As of March 31, 2024, one company with an accounts receivable balance of 10% or greater

individually accounted for 100 % of the Company’s accounts receivable.

During the three months ended

March 31, 2025 and 2024, the Company did not have any concentration of suppliers.

(8) RELATED PARTY TRANSACTIONS

The Company leased office space located at 848 Elm Street, Manchester, NH.

The landlord is an affiliate entity owned by Mr.

The two-year facility lease agreement was effective from August 1, 2019, to July 31, 2021 and was extended to July 31, 2022.

On July 18, 2022, the lease agreement was amended to a month-to-month lease arrangement and may be terminated by either party with a 60-day notice.

The Company terminated the lease during the period ended September 30, 2024.

Rent expense charged by related

party and amount due to related party:

The Company leased office space

located at 848 Elm Street, Manchester, NH.

The landlord was an affiliate entity owned by Mr.

Jeremy Hitchcock, who was the Company’s

former Chairman of the Board.

On July 18, 2022, the lease agreement, which originated in August 2019, was amended to a month-to-month

lease arrangement.

The lease was not renewed in September 2024.

The facility lease agreement provided for 2,656 square feet.

For the three-months period ended September 30, 2024 and 2023, the rent expense was $ 0 thousand and $ 9 thousand, respectively.

For the nine-months period ended September 30, 2024 and 2023, the rent expense was $ 27 thousand and $ 27 thousand, respectively.

On November 30, 2022, the Company and Slingshot Capital, LLC (“Slingshot Capital”) entered into a Bridge Loan Agreement (the “Bridge Loan Agreement”) pursuant to which Slingshot Capital agreed to make available a bridge loan in the principal amount up of up to $ 1,500,000 .

The Company has drawn down $ 1,000,000 under the Bridge Loan Agreement.

Subject to Slingshot Capital’s sole discretion, the other $ 500,000 may be drawn by the Company.

The price per share used in the exchanged was determined by the weighted average price per share and trade volume on September 13, 2023 and November 28, 2023.

Slingshot Capital is owned by the Company’s former Chairperson of the Board and a former Board Member, Jeremy Hitchcock and Elizabeth Hitchcock, respectively.

three-months period ended March 31, 2025 and 2024, the rent expense was $ 0 and $ 14 thousand, respectively.

Amount due to Shareholder and related party:

Schedule of due to shareholder and related party

Three Months Ended

Due to the shareholder Cao Yu

Due to the shareholder David Lazar

$50,000 of the $53,000 due to Cao Yu for the period ended March 31,

2025 was made by Cao Yu on behalf of the Company to Beckles & Co for auditor services.

The Company and David Lazar (“Noteholder”) entered into

an unsecured promissory note (the “Convertible Note”), under which, effective as of February 18, 2025 (the “Effective

Date”), the Company agreed to pay to the Noteholder a principal amount of $ 300,000 , together with interest on the balance

of the principal from time to time outstanding, at the rates and at the times described therein.

The outstanding principal balance of

the Convertible Note shall be paid in full on or prior to December 31, 2025.

(9) EARNINGS (LOSS) PER SHARE

Net loss per share for the three and nine months ended September 30, 2024 and 2023, respectively, are as follows:

Net loss per share for the three months ended March 31, 2025 and 2024, respectively, are as follows:

Schedule of net income (loss) per share

Three Months Ended

Nine Months Ended

September 30,

Weighted average common shares basic

1 unchanged sentence

Weighted average common shares dilutive

Basic and diluted

Diluted loss per common share for the three and nine months ended September 30, 2024 and 2023 excludes the effects of 5,230,769 and 2,080 common share equivalents, respectively, since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock issuable upon exercise of outstanding preferred stock, warrants, restricted stock units, and stock options.

Basic and diluted net loss per share

Diluted loss per common share

for the three months ended March 31, 2025 and 2024 excludes the effects of 0 and 5,230,769 common share equivalents, respectively,

since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock issuable upon exercise of

outstanding preferred stock, warrants, restricted stock units, and stock options.

Preferred Stock and Warrants

On January 23, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with David Lazar (“Lazar”), a member of our Board of Directors, whereby, at the closing of the transactions contemplated by the Purchase Agreement (the “Closing”), the Company sold and Lazar (or to any transferee of Lazar’s which acquires the Securities Purchase Rights, as defined below, hereinafter a “Lazar Transferee”) purchased two million 2,000,000 shares of the Company’s preferred stock, $ 0.001 par value per share (the “Preferred Stock”), at a price per share of $ 1.40 , for an aggregate purchase price of $ 2,800,000 , subject to the conditions described below, pursuant to the exemptions afforded by the Securities Act of 1933, as amended, and Regulation S thereunder.

On January 23, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with David Lazar (“Lazar”), a member of our Board of Directors, whereby, at the closing of the transactions contemplated by the Purchase Agreement (the “Closing”), the Company sold and Lazar (or to any transferee of Lazar’s which acquires the Securities Purchase Rights, as defined below, hereinafter a “Lazar Transferee”) purchased 2,000,000 shares of the Company’s preferred stock, $ 0.001 par value per share (the “Preferred Stock”), at a price per share of $ 1.40 , for an aggregate purchase price of $ 2,800,000 , subject to the conditions described below, pursuant to the exemptions afforded by the Securities Act of 1933, as amended, and Regulation S thereunder.

Under the Purchase Agreement, the Company agreed to designate 2,000,000 of the Preferred Stock as Series A Preferred Stock (the “Series A Preferred Stock”) for the sale to Lazar (or a Lazar Transferee).

13 unchanged sentences

On February 26, 2024, the Company held a special meeting of stockholders, who voted and approved (i) the issuance of shares of our common stock, par value $0.01 per share (“Common Stock”) upon conversion of Series A Preferred Stock or exercise of the Warrants to be issued at Closing of the Purchase Agreement, which conversions or exercise would result in a “change of control” of the Company under the applicable rules of Nasdaq and (ii) an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect the increase in authorized shares of Preferred Stock to 10,000,000 .

In January 2024 and September 2024, the Company issued 156,880 and 612,892 , respectively, shares of common stock to board members in exchange for services performed and recorded $ 378,081 in stock-based compensation expense and $ 465,482 in reduction to accrued expenses, respectively.

The Company issued 20,000 and 135,000 shares of common stock to vendors in exchange for services performed in 2024.

The Company recorded $ 48,200 and $ 5,400 in stock-based compensation expense in January 2024 and September 2024.

On February 18, 2025, the

Company entered into an Amended and Restated Securities Purchase Agreement (the “February 18, 2025 SPA”) with David Lazar

(“Seller”) on the one hand, and Cao Yu, Hu Bin, and Youxin Consulting Limited (collectively, “Purchasers”), on

the other hand, whereby Seller, a director and former officer of the Company, sold to the Purchasers (i) 2,219,447 shares (the “Seller

Preferred Stock”) of Series A Convertible Preferred Stock, $0.001 par value per share (the “Preferred Stock”) of the

Company, (ii) a warrant to purchase up to an additional 2,800,000 shares of Common Stock, with an exercise price equal to $1.00 per share,

subject to adjustment therein (the “Warrant”), and (iii) certain amounts owed by the Company to Seller (the “Lazar Receivables”).

On April 10, 2025, Seller transferred 31,258 additional shares of Preferred Stock (the “Additional Shares” and collectively

with the Seller Preferred Stock and the Warrant, the “Securities”) to Purchasers.

The aggregate purchase price for the Securities

and the Lazar Receivables paid to Seller was $500,000 (the “Purchase Price”), of which $300,000 was directed by Seller to

be contributed to the Company in exchange for 1,200,000 newly issued shares of Common Stock to be issued to Seller (the “Lazar Common

Pursuant to the February 18, 2025 SPA, in the event certain milestones were achieved, Seller was to be issued newly issued shares of Common

Stock (the “Earnout Shares”).

On May 9, 2025, the Company

entered into a Second Amended and Restated Securities Purchase Agreement with Seller and Purchasers to remove references to the issuance

of the Lazar Common Stock, which issuance was rescinded and replaced with the Convertible Note described below, and remove references

to the Earnout Shares.

Pursuant to such Second Amended and Restated Purchase Agreement, Seller sells and delivers to Purchasers, and

Purchasers purchases and accepts all of Seller’s right, title and interest in and to the Lazar Receivables and the Securities for

the Purchase Price, which Seller acknowledges and agrees had been previously paid by Purchasers.

Purchasers agree that they will surrender

the Warrant to the Company for cancellation and irrevocably waive and forgive the Lazar Receivables for the benefit of the Company.

(11) SUBSEQUENT EVENTS

Securities Purchase Agreement

On November 18, 2024, the Company

entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Cao Yu, an individual (“Cao”), Hu

Bin, an individual, and Youxin Consulting Limited, a Hong Kong company (the “Investors”), whereby, at the closing of the

transactions contemplated by the Purchase Agreement (the “Closing”), subject to satisfaction of certain closing conditions,

including our stockholders voting in favor of the transaction at a Special Meeting, the Company will sell and the Investors will purchase

shares of the Company’s newly formed Series B preferred stock, $ 0.001

par value per share (the “Preferred Stock”), at a price per share of $ 1.31 ,

for an aggregate purchase price of $ 2,600,000 ,

subject to the conditions described below, pursuant to the exemptions afforded by the Securities Act of 1933, as amended, and Regulation

S thereunder.

The Purchase Agreement contains

customary representations, warranties and agreements of the Company and the Investors, limitations and conditions regarding sales of

the Purchased Securities or underlying Common Stock, indemnification rights and other obligations of the parties.

Furthermore, the Purchase

Agreement contains certain conditions to closing, including:

(i) a resolution appointing three (3) individuals identified in writing

by the Investors to fill the vacancies on the Board of Directors caused by the resignations of all of the members of the Board of Directors

as of the Closing Date, (ii) satisfactory evidence that all reasonably required waivers and/or settlement agreements with the Company’s

creditors, vendors and employees have been received, (iii) the Certificate of Designation of the rights and privileges of the Series

B Preferred Stock, (iv) satisfactory evidence that all third-party and governmental consents have been received or sent and not revoked,

(v) satisfactory evidence that all holders of equity of the Company with redemption rights or rights to participate in the issuance of

Series B Preferred Stock and the shares of Common Stock issuable upon conversion of such shares, if any, have been waived, (vi) satisfactory

evidence that all persons with the right to receive severance, retention bonuses, “stay” bonuses, change in control bonuses,

transaction bonuses or other similar payments or arrangements have waived any and all rights to receive such bonuses, (vii) satisfactory

evidence that identified all related party transactions have been terminated, (viii) satisfactory evidence that all employment agreements

have been terminated, (ix) satisfactory evidence that a satisfactory written opinion of the Company’s counsel that all of the Series

B Preferred Stock and the securities to be purchased pursuant to the Securities Purchase Agreement, dated on even date of the Purchase

Agreement, by and among David Elliot Lazar and the Investors are, and the shares of Common Stock underlying the Series B Preferred Stock

will be, duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities

laws, and none of such shares was or would be issued in violation of any preemptive rights or similar rights to subscribe for or purchase

securities, (x) the Company’s shares be listed on the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select

Market, or any successors to any of the foregoing by no later than December 31, 2024, and (xi) the approval from the stockholders

of the Company of the transactions contemplated by the Purchase Agreement.

The Company has evaluated subsequent events from September 30, 2024, through the date of this filing and has determined that there are no such events, other than those noted above, requiring recognition or disclosure in the financial statements.

Director Appointments

Effective as of April 24, 2025, which is the expiration

of the 10-day period after the filing and mailing of the Company’s Schedule 14F-1 filed and mailed on April 14, 2025, Hu Bin and

Cao Yu were appointed to the Company’s board of directors.

Effective as of April 30, 2025, David Natan and Chan Oi Fat were appointed

to the Company’s board of directors.

Effective as of April 30, 2025, Hu Bin, David Natan and Chan Oi Fat were appointed to the audit

committee, compensation committee and the nominating committee of the Company’s board of directors.

Non-binding Letter of Intent

On March 25, 2025, the

Company entered into a non-binding letter of intent (“LOI”) with Hongyan Sun and Lin Lin (collectively, the “Sellers”),

pursuant to the terms of which the Sellers will transfer 100% of their equity interests in Suzhou Yixuntong Network Technology Co., Ltd.

(the “Target Company”) to the Company (the “Potential Transaction”) for a purchase price not to exceed $2,000,000.

The Company shall make a prepayment of $300,000 to the Sellers, as soon as practicable, upon the signing of the LOI.

Upon the signing of this

LOI, the Target Company and the Sellers (i) have granted the access of the Target Company’s service ports to the Company;

have connected the Company to the Target Company’s Software as a Service platform;

(iii) and is working with the Company to ensure

it can carry out the Multi-Channel Network business in the second quarter of 2025.

The Potential Transaction

is subject to the Company’s satisfactory completion of legal, tax, financial, operation, human resources and administration, and

environmental due diligence of Target Company and such other due diligence as the Company may deem necessary.

The Company and the Sellers

expect to complete the Potential Transaction as soon as reasonably practicable, but in no event later than six (6) months after signing

of the LOI (the “Long-Stop Date”).

The Sellers have agreed that that, from the date of the LOI through the Long-stop Date,

or the date when the Company informs the Sellers that the exclusivity expires, whichever occurs earlier, the Sellers shall refrain, directly

or indirectly from (i) soliciting offers from third parties to acquire Target Company and/or its business, and from offering Target Company

or its business to any person, firm, group or corporation other than the Company;

and (ii) entering into any agreement aimed at selling

or otherwise transferring Target Company or the business or that may otherwise prevent the parties from consummating the Potential Transaction.

The Company expects to announce

additional details regarding the Potential Transaction if and when a definitive agreement is executed.

No assurances can be made that

the Company will successfully negotiate and enter into a definitive agreement with respect to the Potential Transaction, or that the

Potential Transaction will be consummated on the terms or timeframe currently contemplated, or at all.

Any transaction is subject to

board and shareholder holder approval of the Company, regulatory approvals and other customary conditions.

Nasdaq Developments

As previously disclosed, on June 26, 2024, the Company received

a letter (the “June 26, 2024 Letter”) from the staff at the Listing Qualifications Department (the “Staff”) of

the Nasdaq Stock Market LLC (the “Nasdaq”) notifying the Company that the Staff had determined that it did not meet the terms

of the minimum stockholders’ equity requirement of at least $2,500,000 (the “Stockholders’ Equity Requirement”)

for continued listing on the Nasdaq Capital Market pursuant to the Nasdaq Listing Rule 5550(b)(1).

On April 7, 2025, the Company received a second letter from the Staff

(the “April 7, 2025 Letter”) stating that in addition to the failure to meet the Stockholders’ Equity Requirement, the

Staff made additional determinations (the “Additional Deficiencies”) that the Company (1) failed to comply with the Nasdaq’s

shareholder approval requirements pursuant to the Nasdaq Listing Rule 5635 (b), (c) and (d), in connection with the closing of transactions

under that certain Amended and Restated Securities Purchase Agreement, dated February 18, 2025, attached as Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2025, and (2) does

not currently comply with the Nasdaq’s majority independent board, independent audit committee, compensation committee and nomination

committee requirements as set forth in the Nasdaq Listing Rule 5605(b)(1), 5605(c)(2), 5605(d)(2) and 5605(e), respectively.

In connection with the issuance of the April 7, 2025 Letter, on April

7, 2025, the Company and the Nasdaq also entered into a Confidential Settlement and Mutual Release Agreement, pursuant to which the Nasdaq

has agreed not to delist the Company’s securities at this time.

The Company will have the opportunity to present its views and challenge

in writing (1) the Additional Deficiencies, (2) the previously noticed Stockholders’ Equity Requirement in the June 26, 2024 Letter,

and (3) the Form 25 filed by the Nasdaq on April 9, 2025 with the SEC, to the Nasdaq Hearings Panel (the “Panel”), in advance

of a hearing in front of the Panel.

Consistent with the Nasdaq Listing Rule 5815(a)(4)-(5), the Panel will set the applicable deadlines

for written submissions from the Company, and the hearing shall take place, to the extent practicable, within 45 days of the April 7,

In addition to the Additional Deficiencies, the April 7, 2025 Letter

also included a bid price notification that based upon the closing price of the Company’s common stock on the OTC Pink Sheets for

the last 30 consecutive business days, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share.

Company has 180 calendar days, or by October 6, 2025, to regain compliance with the minimum bid price requirement under the Nasdaq Listing

Rule 5550(a)(2) but could be eligible for an additional 180-day compliance period.

On May 9, 2025, the Company entered into, and

simultaneously closed the transactions under, a Securities Purchase Agreement with Cao Yu (“Cao SPA”), whereby the Company

sold 1,585,366 shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”) to Cao Yu, for an aggregate

purchase price of $ 2,600,000 .

On May 9, 2025, the Company entered into, and

simultaneously closed the transactions under, a Securities Purchase Agreement with Hu Bin (“Hu SPA”), whereby the Company

sold 853,659 shares of Common Stock to Hu Bin, for an aggregate purchase price of $ 1,400,000 .

On May 9, 2025, the Company entered into a Second

Amended and Restated Securities Purchase Agreement with Seller and Purchasers to remove references to the issuance of the Lazar Common

Stock, which issuance was rescinded and replaced with the Convertible Note described below, and remove references to the Earnout Shares.

Pursuant to such Second Amended and Restated Purchase Agreement, Seller sells and delivers to Purchasers, and Purchasers purchases and

accepts all of Seller’s right, title and interest in and to the Lazar Receivables and the Securities for the Purchase Price, which

Seller acknowledges and agrees had been previously paid by Purchasers.

Purchasers agree that they will surrender the Warrant to the Company

for cancellation and irrevocably waive and forgive the Lazar Receivables for the benefit of the Company.

On May 9, 2025, the Company and David Lazar (“Noteholder”)

entered into an unsecured promissory note (the “Convertible Note”), under which, effective as of February 18, 2025 (the “Effective

Date”), the Company agreed to pay to the Noteholder a principal amount of $ 300,000 , together with interest on the balance

of the principal from time to time outstanding, at the rates and at the times described therein.

The outstanding principal balance of

the Convertible Note shall be paid in full on or prior to December 31, 2025.

On May 9, 2025, the Company entered into a services agreement with

David Lazar (“Service Provider”), pursuant to which the Company engages Service Provider as an independent contractor, to

(i) use best efforts to obtain a decision from the Securities and Exchange Commission that Nasdaq Stock Market (the “Nasdaq”)

must hold a hearing to consider the merits of the Company’s appeal from being delisted from Nasdaq, (ii) use best efforts to achieve

a Nasdaq Listing for the Company on or before December 31, 2025 (such date of achievement being the “Listing Date”) and (iii)

continue to provide additional services to the Company in furtherance of achieving a Nasdaq Listing through the earlier of December 31,

2025, or the Listing Date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements