Q/C TECHNOLOGIES, INC. 10-K

Item 1A. Risk Factors. An investment in our Common Stock involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks described below, together with other information in this Annual Report on Form 10-K and the other information and documents we file with the SEC. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly, or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Form 10-K. The following information should be read in conjunction with our consolidated financial statements and related notes thereto and with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. Risk Factor Summary Below is a summary of the principal factors that make an investment in our Common Stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC before making investment decisions regarding our Common Stock. Risks Related to Our Business ● We expect that we will need to raise additional capital to fund our operations in order to continue as a going concern. ● The market price of our Common Stock may be subject to significant fluctuations and volatility, and the stockholders of the Company may be unable to resell their shares at a profit and may incur losses. ● We may issue additional equity securities in the future, which may result in dilution to existing investors. ● The concentration of the capital stock ownership with insiders of the Company will likely limit the ability of our stockholders to influence corporate matters. ● We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position. ● An active trading market for our Common Stock may not be sustained. ● Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security or those of third-party providers. ● We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technology. ● The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing products. ● Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technology. ● Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its business. 8 Risks Related to Our Legacy Pharmaceutical Business ● Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks. ● Any legacy pharmaceutical product candidate that obtains marketing approval would be subject to extensive post-marketing regulatory requirements, and could be subject to restrictions or withdrawal from the market. ● The Company’s legacy Supera-CBD program, a synthetic analog of CBD, is in its earliest stages and subject to substantial uncertainty and significant regulatory risks that could reduce the value of this asset. ● The commercial viability of our legacy pharmaceutical product candidates is dependent on market acceptance, pricing, reimbursement, and competition, any of which could reduce the value of these assets. ● The Company’s legacy pharmaceutical operations are subject to healthcare laws and regulations, including anti-kickback, fraud and abuse, and healthcare reform legislation, which could affect the value of these pharmaceutical assets. ● Our legacy pharmaceutical operations involve the use of hazardous materials, and we are subject to environmental, health, and safety laws and regulations. Risks Related to Our Intellectual Property ● Our success depends in part on our ability to obtain, maintain and protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their adequate protection. ● Our potential strategy of obtaining rights to key technologies through in-licenses may not be successful. ● Changes in patent law in the U.S. and in non-U.S. jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our laser-based computing technology and legacy pharmaceutical intellectual property. Risks Related to Our Preferred Stock ● Our Series H Convertible Preferred Stock (the “Series H Preferred Stock”) and Series G Convertible Preferred Stock (“Series G Preferred Stock”) provide for the payment of dividends in cash, in shares of our Common Stock or in additional shares of Series G Preferred Stock, as applicable. If we pay such dividends in shares of Common Stock, it may result in dilution to existing investors. ● Certain outstanding shares of preferred stock and common stock purchase warrants of the Company contain anti-dilution provisions that may result in the reduction of the conversion price of the applicable preferred stock or the exercise price of such warrants in the future. These features may increase the number of shares of Common Stock being issuable upon conversion of such preferred stock or upon the exercise of such warrants. ● The Series H Certificate of Designations and Series H Purchase Agreement, as well as the Series G Certificate of Designations and the Series G Purchase Agreement contain restrictive covenants and terms that may make it difficult to procure additional financing and that may affect our financial condition and results of operations. In addition, we face other business, financial, operational and legal risks and uncertainties set forth under “Risk Factors” in Item 1A of this Annual Report on Form 10-K. 9 Risks Related to our Business We expect that we will need to raise additional funding before we can expect to become profitable from our laser-based computing business or any realization of value from our legacy pharmaceutical product candidates. This additional financing may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. We will require substantial future capital in order to fund the development, commercialization, and deployment of our laser-based computing business, including the qc-LPU100 prototype, performance benchmarking, pilot testing, hardware certifications, manufacturing, and scaling deployment clusters. In addition, we hold legacy pharmaceutical assets, including Isomyosamine and Supera-CBD, and may incur costs in connection with maintaining or disposing of those assets as part of any strategic alternatives we evaluate. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations before any commercial revenue may occur. Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding. In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition. Additional capital might not be available when we need it and our actual cash requirements might be greater than anticipated. If we require additional capital at a time when investment in its industry or in the marketplace in general is limited, we might not be able to raise funding on favorable terms, if at all. If we are not able to obtain financing when needed or on terms favorable to us, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of our assets or merge with another entity. We have recently shifted our business strategy from pharmaceutical development to laser-based computing for blockchain and high-performance computing, and we may not successfully develop, validate or commercialize our new technology. We have historically focused on pharmaceutical research and development of our Isomyosamine and Supera-CBD product candidates. Beginning in September 2025, we redirected our strategy toward energy-efficient blockchain and cryptocurrency infrastructure using laser-based computing. However, the qc-LPU100 prototypes we are developing remain in early-stage development, have not completed performance validation or regulatory certifications, and may not achieve the speed, efficiency, scalability, or energy-consumption improvements we anticipate. If the qc-LPU100 or future LPUs do not perform as expected, cannot be manufactured at commercial scale, or fail to gain adoption from AI, DePin Token, or cryptocurrency infrastructure users, our business prospects and financial condition would be materially adversely affected. Furthermore, our lack of operating history in the technology hardware, photonics, and blockchain markets increases the uncertainty of our ability to execute this new strategy. We may require significant additional capital to develop the qc-LPU100, finance pilot deployments and other development efforts, and execute our hardware commercialization plan, and we may be unable to obtain such capital on acceptable terms or at all. Our shift to laser-based computing for blockchain, DePin Token infrastructure, and AI requires significant capital for prototype development, performance benchmarking, pilot testing, hardware certifications, manufacturing and scaling deployment clusters. Additional capital will likely be needed to fund operations through prototype completion, including R&D efforts, beta-unit deployment, and early commercialization, particularly given the volatility and cyclicality of the cryptocurrency sector. Equity or debt financing may be unavailable or may occur on dilutive or unfavorable terms. Our ability to raise capital may be constrained by our prior going-concern history and our strategic transition. If we cannot secure additional financing, we may be forced to delay or reduce prototype development, defer regulatory certifications, scale back commercialization efforts, or cease operations. Our primary source for developing qc-LPU100 and LPU prototypes is through a licensing partnership, and therefore the Company is dependent upon maintaining and increasing the number of licensing agreements and developing annual recurring revenues through those partnerships, in order to continue to develop its business. We are in the early stages of shifting our business and recently began transitioning our products to LPU technology by licensing through a channel partner. There can be no certainty over the pace and scale of revenue growth generated from such relationship, which might take longer than anticipated to generate material revenues. In addition, we are dependent upon maintaining our existing partnership in order to continue to develop our business and annual recurring revenues. If revenues from our licensing relationship fail to develop, take longer than expected to develop, or we fail to maintain existing or increase the number of our partnerships, the impact could adversely affect its business, financial condition, and results of operations. 10 The market price of our Common Stock has been and may continue to be subject to significant fluctuations and volatility, and the stockholders of the Company may be unable to resell their shares at a profit and may incur losses. The market price of our Common Stock has been and could continue to be subject to significant fluctuation following. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of our Common Stock, regardless of the actual operating performance of the combined company. Some of the factors that may cause the market price of our Common Stock to fluctuate include: ● actions by competitors ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by the us or our competitors; ● conditions or trends in the quantum computing, cryptocurrency and blockchain industries; ● changes in the economic performance or market valuations of quantum computing, cryptocurrency and blockchain companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition; ● sale of our Common Stock by stockholders, including executives and directors; ● volatility and limitations in trading volumes of our Common Stock; ● volatility in the market prices and trading volumes of the quantum computing, cryptocurrency and blockchain stocks; ● our ability to finance our business; ● ability to secure resources and the necessary personnel to pursue our plans; ● failure to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of Common Stock by stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● investigations by regulators into our operations or those of our competitors; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control. In the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigation has often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources of the Company. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments. Moreover, pandemics, inflation, war and other macroeconomic and geopolitical factors have resulted in significant financial market volatility and uncertainty in recent years. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price of our Common Stock. 11 We have a history of operating losses, and we may not achieve or sustain profitability. We anticipate that we will continue to incur losses for the foreseeable future. If we fail to obtain additional funding to conduct our planned research and development efforts, we could be forced to delay, reduce or eliminate our product development programs or commercial development efforts. We have incurred net losses in each year since our inception. We incurred net losses attributable to shareholders of $11,627,122 and $23,359,334, for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $144,122,732. Substantially all our operating losses have resulted from costs incurred in connection with our research and development efforts and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and operating losses over the next several years as we develop our laser-based computing technology, together with anticipated general and administrative expenses, will likely result in the company incurring significant losses for the next several years. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our shareholders’ equity and working capital. Our limited operating history related to our laser-based computing technology may make it difficult to evaluate the success of our business to date and to assess our future viability. As a result of our limited operating history related to our laser-based computing technology , our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our ability to generate revenues will largely be dependent on our ability to develop and produce the qc-LPU100. As a result, our scalable business model relating to our laser-based computing technology has not been formed and our technical roadmap may not be realized as quickly as expected, or even at all. The development of our scalable business model will likely require the incurrence of a substantially higher level of costs than incurred to date, while our revenues will not substantially increase until our technology is developed, that requires a number of technological advancements which may not occur on the currently anticipated timetable or at all. As a result, our historical results relating to our laser-based computing technology should not be considered indicative of our future performance. Further, in future periods, our growth could slow or decline for a number of reasons, including but not limited to increased competition, changes to technology, inability to scale up our technology, a decrease in the growth of the overall market, or our failure, for any reason, to continue to take advantage of growth opportunities. We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties and our future growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. Our success as a business ultimately relies upon fundamental research and development breakthroughs in the coming years and decade. There is no certainty these research and development milestones will be achieved as quickly as expected, or even at all. Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate. Market opportunity estimates and growth forecasts, including those we have generated, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of companies covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us. In addition, alternatives to quantum-class laser-based computing may present themselves and if they did, could substantially reduce the market for quantum computing services. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with quantum computing solutions. The methodology and assumptions used to estimate market opportunities may differ materially from the methodologies and assumptions previously used to estimate the total addressable market. To estimate the size of our market opportunities and our growth rates, we have relied on market reports by leading research and consulting firms. These estimates of the total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate and are based on data published by third parties that we have not independently verified. Advances in classical computing may prove more robust for longer than currently anticipated. This could adversely affect the timing of any quantum advantage being achieved, if at all. 12 Certain stockholders could attempt to influence changes within the Company, which could adversely affect our operations, financial condition and the value of our Common Stock. Our stockholders may from time to time seek to acquire a controlling stake in the Company, engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes. Campaigns by stockholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming and could disrupt our operations and divert the attention of our Board of Directors and senior management. These actions could adversely affect our operations, financial condition, and the value of our Common Stock. Our largest stockholder maintains the ability to significantly influence all matters submitted to our stockholders for approval. As of April 12, 2026, our largest stockholder, PharmaCyte Biotech, Inc. (“Pharmacyte”) beneficially owns more than 10% of the issued and outstanding Common Stock of the Company. As a result, Pharmacyte may be able to significantly influence all matters submitted to the Company’s stockholders for approval, as well as the Company’s management and affairs. For example, Pharmacyte could significantly influence the election of directors or the approval of any merger, consolidation or sale of all or substantially all of the Company’s assets. This concentration of voting power could delay or prevent an acquisition of the Company on terms that other. In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations. We depend on our executive officers and management team to run our business. As we develop new business models and new ways of working, we will need to develop suitable skill sets within our organization. In addition, our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees that have highly technical set of skills. The current market for such positions is highly competitive. Qualified individuals are in high demand and we may incur significant costs to attract and retain them. Moreover, the loss of any of our senior management or other key employees or our inability to recruit and develop capable managers could adversely affect our ability to execute our business plan and we may be unable to find adequate replacements. We have a very limited workforce and are highly dependent on a small number of individuals to execute our business strategy, which exposes us to significant operational risk. As of December 31, 2025, we had only two full-time employees and no part-time employees. Our limited workforce means that we are highly dependent on a very small number of individuals to manage all aspects of our business, including research and development, regulatory compliance, financial management, investor relations, and strategic planning. The loss, incapacity, or departure of any of these individuals could severely disrupt our operations and our ability to execute our business strategy. We rely heavily on third-party contractors and consultants for specialized functions, and any failure to retain or effectively coordinate with these third parties could delay our product development or commercialization efforts. Our minimal staffing also limits our capacity to respond to unexpected challenges, pursue multiple strategic initiatives simultaneously, or scale our operations rapidly if market conditions warrant. If we are unable to attract and retain additional qualified personnel as our business grows, or if our limited workforce is unable to effectively manage the demands of our business, our ability to achieve our strategic objectives could be materially impaired. The quantum computing industry is competitive and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers. Since our change in business strategy, we now operate in markets that are rapidly evolving and highly competitive. We expect competition to intensify as the marketplace continues to mature and new technologies and competitors enter. Our current competitors include: ● less-established public and private companies focused on blockchain and cryptocurrency infrastructure through quantum-class laser-based computing; ● new or emerging entrants seeking to develop competing prototypes; ● research organizations funded by sovereign nations such as China, Russia, Canada, Australia and the United Kingdom, and those in the European Union; additional countries may decide to fund quantum computing programs in the future. We compete based on various factors, including technology, performance, brand recognition and reputation, scalability and reliability, data governance and security. Many of our competitors have substantially greater partner relationships, and financial, technical and other resources than we do. They may be able to respond more effectively than us to new or changing opportunities, technologies and standards. In addition, many countries are focused on developing quantum computing solutions either in the private or public sector and may subsidize quantum technology, which may make it difficult for us to compete. Many of these competitors do not face the same challenges we do in growing our business. Additionally, we must be able to achieve our objectives in a timely manner such that we don’t lose ground to competitors, including competing technologies. Because there are a large number of market participants, including certain sovereign nations, focused on developing quantum computing technology, we must dedicate significant resources to achieving any technical objectives on the timelines established by our management team. Any failure to achieve objectives in a timely manner could adversely affect our business, operating results and financial condition. For all of these reasons, competition may negatively impact our ability to maintain and grow consumption of our platform or put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition. Even if we are successful in developing qc-LPU100 and LPU prototypes, competitors in the industry may achieve technological breakthroughs that render our systems obsolete or inferior to other technology. Our continued growth and success depend on our ability to innovate and develop LPU technology in a timely manner and effectively license these products. Without timely innovation and development, our technology could be rendered obsolete or less competitive by changing customer preferences or because of the introduction of a competitor’s newer technologies. We believe that many competing technologies will require a technological breakthrough in one or more problems related to science, fundamental physics or manufacturing. While it is uncertain whether such technological breakthroughs will occur in the next several years, that does not preclude the possibility that such technological breakthroughs could eventually occur. Any technological breakthroughs that render our technology obsolete or inferior to other products could have a material adverse effect on our business, financial condition or results of operations. The quantum-class laser computing industry is in its early stages and volatile, and if it does not develop, if it develops slower than we anticipate, if it encounters negative publicity or if quantum computing products and services generally do not achieve commercial adoption, the growth of our business will be harmed. The nascent market for quantum-class laser computing technology is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing customer demands and behaviors. Our success will depend to a substantial extent on the willingness of the industry to adopt LPU technology to in organizations, government agencies, and other users of quantum computing offerings. Negative publicity concerning the quantum computing industry as a whole could limit market acceptance of our offerings. If our clients and partners do not perceive the benefits of our technology and services, or if they do not drive customer engagement, then our market may not develop at all, or it may develop more slowly than we expect. Similarly, individual and industry concerns or negative publicity regarding technophobic views in the context of quantum computing could limit market acceptance of our quantum computing products and services. If any of these events occur, our business, prospects, financial condition and operating results could be harmed. In addition, our growth and future demand for our products is highly dependent upon the adoption by developers and customers of quantum computers. Technical failures at other quantum computing companies could limit acceptance of our services and technology. Negative publicity concerning the quantum computing industry as a whole could limit acceptance of our products and services. While we believe that quantum-class laser computing technology will solve many large-scale problems, it is possible that such problems may never be solvable by quantum computing technology. If any of these events occur, it could have a material adverse effect on our business, financial condition and results of operations. The cryptocurrency and blockchain markets are highly volatile, and a sustained downturn in cryptocurrency prices or demand could materially reduce the market for our laser-based computing products. Our laser-based computing products, including the qc-LPU100, are primarily targeted at cryptocurrency infrastructure, DePin Token ecosystems, and blockchain applications. The cryptocurrency market has historically experienced extreme price volatility, including dramatic declines in the market prices of Bitcoin, Ethereum, and other digital assets. A sustained downturn in cryptocurrency prices could significantly reduce investment in cryptocurrency mining, blockchain infrastructure, and related computational services, thereby decreasing demand for our products. Additionally, the cryptocurrency industry has experienced high-profile failures of exchanges, lending platforms, and other participants, which have eroded confidence in the industry. Any reduction in the overall size, growth, or acceptance of the cryptocurrency and blockchain ecosystem, whether due to market conditions, regulatory actions, security breaches, or loss of investor confidence, could materially limit our addressable market and adversely affect our business, financial condition, and results of operations. 13 Unfavorable conditions in our industries or the global economy could limit our ability to grow our business and negatively affect our results of operations. Our results of operations may vary based on the impact of changes in our industries or the global economy on us or our customers and potential customers. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, inflation, international trade relations, tariffs, public health emergencies, political turmoil, natural catastrophes, warfare, and terrorist attacks on the United States or elsewhere, could cause a decrease in business investments, including the progress on development of quantum technologies, and negatively affect the growth of our business. In addition, in challenging economic times, our current or potential future customers may experience cash flow problems and as a result may modify, delay or cancel plans to purchase our products and services. Additionally, if our customers are not successful in generating sufficient revenue or are unable to secure financing, they may not be able to pay, or may delay payment of, amounts they owe. Furthermore, uncertain economic conditions may make it more difficult for us to raise funds through borrowings or sales of debt or equity securities. We cannot predict the timing, location, strength or duration of any economic slowdown, instability or recovery, generally or within any particular industry. Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security or those of third-party providers. In the ordinary course of our business, we and our third-party providers rely on electronic communications and information system to conduct our operations. We and our third-party providers have been, and may continue to be, targeted by parties using fraudulent e-mails and other communications in attempts to misappropriate bank accounting information, passwords, or other personal information or to introduce viruses or other malware to our information systems. On July 20, 2023, we experienced a cybersecurity incident. A third-party forensic technology company’s investigation confirmed that we were a victim of wire fraud due to a compromised electronic mail account. As of the date of this filing, we have identified losses totaling $78,198 related to this incident, net of amounts recovered. Following the incident, we have taken measures to enhance our electronic mail security and have modified our internal procedures to ensure the authenticity of payment instructions and we continue to evaluate additional measures for improving cybersecurity. Despite these prophylactic measures, the risk of such cyber-attacks against us or our third-party providers and business partners remains a serious issue. Cybersecurity incidents are pervasive, and the risks of cybercrime are complex and continue to evolve. Although we are making significant efforts to maintain the security and integrity of our information systems and are exploring various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. In addition, we collect and store sensitive data, including intellectual property, research data, our proprietary business information and that of our suppliers, technical information about our products, and employee records. Similarly, our third-party providers possess certain of our sensitive data and confidential information. The secure maintenance of this information is critical to our operations and business strategy. Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, ransomware, cyber fraud, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks or cyberintrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyberattacks or cyberintrusions, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. Any such access, inappropriate disclosure of confidential or proprietary information or other loss of information, including our data being breached at third-party providers, could result in legal claims or proceedings, liability or financial loss under laws that protect the privacy of personal information, disruption of our operations or our product development programs and damage to our reputation, which could adversely affect our business. Risks Related to Our Legacy Pharmaceutical Business Our legacy pharmaceutical product candidates, Isomyosamine and Supera-CBD, are subject to extensive clinical development, regulatory approval, and commercialization risks that could reduce the value of these assets. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. Clinical drug development is lengthy, expensive, and inherently uncertain. With regard to Isomyosamine, the Company has completed certain early-stage pre-clinical testing and IND submission for some, but not all, targeted indications. With regard to Supera-CBD, the Company remains in the pre-clinical stage, which is the earliest stage of development. Clinical trials are expensive, difficult to design and implement, and can take many years to complete, and their outcomes are inherently uncertain. Failure can occur at any time during the clinical trial process. Success in pre-clinical studies and earlier clinical trials is not predictive of results in later-stage clinical trials. Many companies in the pharmaceutical industry have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and there is a high failure rate for product candidates proceeding through clinical trials. These risks affect the value of the Company’s pharmaceutical assets. The process of obtaining marketing approvals for pharmaceutical products, both in the U.S. and abroad, is expensive and takes many years, and there is no assurance that approval would be obtained. The Company has limited experience in submitting and supporting regulatory filings. Regulatory authorities have substantial discretion in the approval process and may refuse to accept or file any application, or may require additional pre-clinical, clinical, or other studies. Approval may be for a narrower indication than sought, or may be subject to significant limitations, including Risk Evaluation and Mitigation Strategies, post-marketing study requirements, or restricted distribution. These regulatory uncertainties reduce the value of these assets in connection with any strategic alternatives the Company evaluates. Any legacy pharmaceutical product candidate that obtains marketing approval would be subject to extensive post-marketing regulatory requirements, and could be subject to restrictions or withdrawal from the market. The Company’s legacy product candidates and the activities associated with their development and potential commercialization, including testing, manufacturing, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing in compliance with current Good Manufacturing Practices, quality control, quality assurance, and corresponding maintenance of records and documents. Discovery of previously unknown adverse events or other problems with these product candidates, manufacturers, or manufacturing processes, or failure to comply with regulatory requirements, could result in restrictions on such products, warning or untitled letters, withdrawal of products from the market, refusal to approve pending applications, product recalls, fines, suspension or withdrawal of marketing approvals, product seizure, or injunctions or the imposition of civil or criminal penalties. These regulatory risks affect the value of the Company’s pharmaceutical assets. The commercial viability of our legacy pharmaceutical product candidates is dependent on market acceptance, pricing, reimbursement, and competition, any of which could reduce the value of these assets. The commercial viability of Isomyosamine, Supera-CBD, or any other legacy product candidate depends in part on the acceptance of providers, patients, patient advocacy groups, third-party payors, and the general medical community. Market acceptance depends on several factors, including the efficacy, durability, and safety of such product candidates as demonstrated in clinical trials, the potential and perceived advantages over alternative treatments, the cost of treatment, and the strength of marketing and distribution support. Absent adequate coverage and reimbursement from third-party payors, the commercial viability of these products would be adversely affected. The pharmaceutical market is highly competitive, subject to rapid technological change, and significantly affected by existing rival drugs. Competitors may develop products more rapidly or more effectively, and their success could adversely affect the value of the Company’s legacy pharmaceutical programs. The Company’s legacy pharmaceutical operations are subject to healthcare laws and regulations, including anti-kickback, fraud and abuse, and healthcare reform legislation, which could affect the value of these pharmaceutical assets. The Company’s legacy pharmaceutical product candidates and any arrangements with healthcare providers, third-party payors, and customers associated with them are subject to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements through which such products could be marketed, sold, and distributed. These include federal and state anti-kickback statutes, false claims laws, physician transparency requirements, and patient data privacy and security regulations. In addition, healthcare reform legislation, including the Affordable Care Act and subsequent legislative and regulatory changes, has significantly affected the pharmaceutical industry. These laws may increase the difficulty and cost of commercializing pharmaceutical product candidates and may affect the prices that could be set. The FDA’s ability to review and approve new products may also be hindered by a variety of factors, including budget and funding levels, ability to hire and retain key personnel, statutory, regulatory and policy changes, and global health concerns. These regulatory factors affect the value of the Company’s legacy pharmaceutical assets. Our legacy pharmaceutical operations involve the use of hazardous materials, and we are subject to environmental, health, and safety laws and regulations. Our legacy pharmaceutical operations involve the use of hazardous materials, including chemicals and biological materials. We are subject to numerous environmental, health, and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment, and disposal of hazardous materials and wastes. We generally anticipate contracting with third parties for the disposal of these materials and wastes. We will not be able to eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from any use by us of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Our failure to comply with applicable environmental, health, and safety laws and regulations may result in substantial fines, penalties, or other sanctions. 14 Risks Related to Government Regulation Our focus on blockchain and cryptocurrency infrastructure exposes us to regulatory, cybersecurity, and market risks that could materially impact adoption of our technology. Our intended deployment of LPUs for cryptocurrency mining, DePin Token infrastructure, decentralized computing, and AI applications subjects us to evolving regulatory frameworks across multiple jurisdictions. These include potential export controls under ITAR and the Export Administration Regulations, FCC and UL hardware requirements, SEC and CFTC scrutiny regarding cryptocurrency activities, EU MiCA regulations, and emerging standards for post-quantum cryptography. Regulatory changes affecting energy consumption, decentralized computing, or blockchain infrastructure could limit the market for our products or impose compliance burdens. Additionally, DePin Token networks and blockchain applications present cybersecurity, data-integrity, and operational risks that may require substantial resources to mitigate. Any adverse regulatory development, failure to achieve or maintain required certifications, or inability to address cybersecurity risks could delay commercialization or reduce customer adoption of the qc-LPU100. We may be subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws. If we successfully finalize the qc-LPU100 prototypes, our technology and services may be subject to U.S. export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control. U.S. export control and economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products, technologies, and services to U.S. Government embargoed or sanctioned countries, governments, persons and entities. In addition, certain technology may be subject to export licensing or approval requirements. Potential exports of our technology must be made in compliance with export control and sanctions laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges, fines that may be imposed on us and responsible employees or managers and, in extreme cases, the incarceration of responsible employees or managers. In addition, various countries regulate the import of certain encryption technology, including through import permit and license requirements and have enacted laws that could limit our ability to distribute our products and technologies or could limit our end customers’ ability to implement our services in those countries. Changes in our technologies or changes in applicable export or import laws and regulations also may create delays in the introduction and sale of our products and technologies in international markets or, in some cases, prevent the export or import of our technologies to certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations could also result in decreased use of our products and services or in our decreased ability to export or sell our products and services to existing or potential customers. Any decreased use of our products and services or limitation on our ability to export or sell our products and services would likely adversely affect our business, financial condition and results of operations. Other countries in addition to the U.S. and U.K. also regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to license our technology. Changes to our technology or future changes in export and import regulations may create delays in the introduction of our LPU technology in international markets or, in some cases, prevent the export or import of our technology to certain countries, governments, or persons altogether. We expect to incur significant costs in complying with these regulations. Regulations related to quantum computing and LPU technology are currently evolving and we face risks associated with changes to these regulations. The regulatory framework for artificial intelligence (“AI”) technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. In addition, existing laws and regulations may be interpreted in ways that would affect the use of AI in our business. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations. Evolving related to artificial intelligence could affect demand for our laser-based computing products and adversely We incorporate AI solutions into our platform technology, services, and features, and these applications are important in our operations. The regulatory framework for AI technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. In addition, existing laws and regulations may be interpreted in ways that would affect the use of AI in our business. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations. Our laser-based computing products, including the qc-LPU100, are designed to address computationally intensive workloads, including artificial intelligence and machine learning applications. As AI technologies become increasingly subject to regulation, the demand for computing infrastructure that supports AI workloads, including our LPU systems, may be affected development, deployment, or technologies by customers or the markets which products are deployed Certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI technologies, and new laws regulating AI technologies recently entered into force in the United States and Europe. In the United States, the former Biden administration issued a broad Executive Order on the Safe, Secure and Trustworthy Development and Use of Artificial Intelligence (the “2023 AI Order”), which sets out principles intended to guide AI design and deployment for the public and private sectors and signals the increase in governmental involvement and regulation over AI technologies. Agencies such as the Department of Commerce and the FTC have issued proposed rules governing the use and development of AI technologies. Legislation related to AI technologies has also been introduced at the federal level and is advancing at the state level. Such additional regulations may impact our ability to develop, use, and commercialize AI technologies offered by our service providers and within our products and services in the future. This executive order was revoked by President Trump on January 23, 2025. Subsequently, on January 23, 2025, the President issued Executive Order on Removing Barriers to American Leadership in Artificial Intelligence, which directed relevant agencies to develop an action plan to assure global dominance by the United States in artificial intelligence, and to examine any actions taken in connection with the 2023 AI Order, which are incongruent with Trump’s order. On May 21, 2024, the European Union legislators approved the EU Artificial Intelligence Act (the “EU AI Act”), which establishes a comprehensive, risk-based governance framework for artificial intelligence in the EU market. The EU AI Act entered into force on August 2, 2024, and the majority of the substantive requirements will apply from August 2, 2026. The EU AI Act, and developing interpretation and application of the GDPR in respect of automated decision making, together with developing guidance and/or decisions in this area, may affect our use of AI technologies and our ability to provide, improve or commercialize our business, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition. It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI technologies for our business, or require us to change the way we use AI technologies in a manner that negatively affects the performance of our system and business and the way in which we use AI technologies. We may need to expend resources to adjust our system in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI technologies). Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could materially and adversely affect our business, financial condition, results of operations, and prospects. 15 Risks Related to Our Intellectual Property We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position. Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We will primarily rely on patent, copyright, trademark, and trade secret laws, as well as nondisclosure agreements and other methods, to protect our proprietary technologies or processes. It is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose proprietary technologies and processes, despite efforts by the us to protect our proprietary technologies and processes. While we hold rights in several patents, there can be no assurances that any additional patents will be issued, or additional rights will be granted, to us. Even if new patents are issued, the claims allowed may not be sufficiently broad to adequately protect our technology and processes. Our competitors may also be able to develop similar technology independently or design around the patents and other agreements under which we have rights. Currently, the Company has 19 issued U.S. patents, 70 foreign patents, and 4 foreign patent applications pending in such jurisdictions as Canada, China, Israel, and Japan, which if issued are expected to expire between 2036 and 2041. Although we expect to obtain additional patents and in-licenses in the future, there is no guarantee that we will be able to successfully obtain such patents or in-licenses in a timely manner or at all. Further, any of our rights to existing patents, and any future patents issued to us, may be challenged, invalidated, or circumvented. As such, any rights granted under these patents may not provide us with meaningful protection. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. If our patents or rights to patents or under other agreements do not adequately protect our technology or processes, competitors may be able to offer products similar to our products. Our business depends on our exclusive global licensing agreement with LightSolver, and loss of access to this technology or disputes regarding intellectual property could materially and adversely affect our operations. Our core strategy relies on an exclusive global license with LightSolver Ltd. to deploy their LPU technology, including the photonic methodologies needed for the qc-LPU100. We depend on LightSolver for certain intellectual property, know-how, improvements, and ongoing collaboration. Any limitation, interruption, or termination of this license agreement would materially impair our ability to develop or commercialize LPUs. We may also face risks relating to technology transfer, integration of LightSolver’s photonic systems into our hardware platforms, failure to obtain new patents or extensions, and potential intellectual property disputes. If we are unable to secure, maintain, or enforce the intellectual property rights necessary to support our product roadmap, or if LightSolver is unable to meet its obligations or experiences financial, developmental, or operational difficulties, our commercialization efforts could be delayed or rendered infeasible. In addition, although we are not currently experiencing any claims challenging our rights under our licensing and distribution arrangements, we may in the future be subject to claims and/or disputes may arise regarding intellectual property subject to distribution and licensing agreements, including: ● the scope of rights granted under existing and future license and distribution agreements and other interpretation-related issues; ● the extent to which our technology and processes infringe on intellectual property held by the counterparty that is not subject to the distribution or licensing agreement; ● the sublicensing of patent and other rights under our existing relationship and any collaboration relationships we might enter into in the future; ● our diligence obligations under license and distribution agreements and what activities satisfy those diligence obligations; ● Third party rights to intellectual property that our activities (or those of our collaboration partner) are alleged to infringe or violate, which might hinder or prevent our ability to develop, market, and otherwise commercialize such LPU technology and products; and ● Third parties who infringe or violate the intellectual property rights that we or our collaboration partner hold, which if not suitably challenged could result in decreased market share and profitability of our collaboration arrangement. Further, adverse decisions in a dispute, such as by a court, arbitrator, or administrative agency, might also result in the invalidation of, narrowing of the scope of, or other loss or diminishment of rights in the intellectual property that make it difficult or impossible to make fair use of such rights to legally prevent further aspects of competition in certain markets as to certain products. We are generally also subject to all of the same risks with respect to protection of intellectual property that we license or have rights to distribute, as we are for intellectual property that we own, which may be described elsewhere under “Risks Related to Our Intellectual Property.” If we or our collaboration partner(s) fail to adequately protect this intellectual property, our ability to commercialize our laser-based computing products or realize value from our legacy pharmaceutical assets could suffer. Moreover, if disputes over intellectual property that we have licensed or have rights to distribute prevent or impair our ability to maintain our current licensing or distribution arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize our laser-based computing technology or realize value from our legacy pharmaceutical assets, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. 16 Litigation may be necessary to defend against any claims or disputes challenging rights under such licensing and/or distribution arrangements, or for infringing or violating the intellectual property rights of third parties. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property or distribution rights, such as exclusive ownership of, or right to use or commercialize, valuable technology or intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more products or services. We may not be successful in obtaining or maintaining necessary rights to the photonic systems or any related products and services, even through further acquisitions, in-licenses, and distribution arrangements. Competitors may infringe our patents or the patents of our licensors. Although we are not currently involved in any litigation, if our licensing partner initiated legal proceedings against a third party to enforce patent rights covering one of our products or services, the defendant could counterclaim that the patent covering our product or service is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. There are USPTO administrative proceedings that competitors can seek to use to challenge intellectual property rights covering the products we distribute, as well. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Furthermore, because of the substantial amount of discovery required in connection with litigation, there is a risk that confidential information of our or our collaboration partner(s) could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties, including potentially wrongfully use or disclosure of alleged trade secrets of their former employers. Third-party claims of intellectual property infringement may prevent, delay or otherwise interfere with our business operations. Although our business is transitioning away from pharmaceuticals, past activities regarding our product candidates and their development may be accused of infringing, misappropriating or otherwise violating the intellectual property or other proprietary rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries. We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that past activities with our product candidates and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights. Numerous U.S. and foreign issued patents and pending patent applications that are owned by third parties exist in the fields in which we were developing our product candidates. Moreover, it is not always clear to industry participants, including us, which patents cover various types of drugs, products or their methods of use or manufacture. Thus, because of the large number of patents issued and patent applications filed in our field, third parties may allege they have patent rights encompassing our product candidates, technologies or methods. If a third party claims that we infringe, misappropriate or otherwise violate its intellectual property rights, we may face a number of issues, including, but not limited to: ● infringement and other intellectual property claims that, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; ● substantial damages for infringement, which we may have to pay if a court decides that the product candidate or technology at issue infringes on or violates the third party’s rights, and, if the court finds that the infringement was willful, we could be ordered to pay treble damages plus the patent owner’s attorneys’ fees; ● there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Common Stock. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations or could otherwise have a material adverse effect on our business, financial condition, results of operations and prospects. Third parties may assert that we are employing their proprietary technology without authorization, including by enforcing its patents against us by filing a patent infringement lawsuit against us. 17 Risks Related to Our Preferred Stock Holders of our Series H Preferred Stock and Series G Preferred Stock are entitled to certain payments under the applicable Certificate of Designations that may be paid in cash, in shares of Common Stock or in additional shares of Series G Preferred Stock depending on the circumstances. If we make these payments in cash, it may require the expenditure of a substantial portion of our cash resources. If we make these payments in Common Stock, it may result in substantial dilution to the holders of our Common Stock. Holders of our Series H Preferred Shares are entitled to receive dividends of 7% per annum, compounded each calendar quarter, which are payable in arrears (i) on the first trading day of each quarter, commencing on October 1, 2025 (ii) upon any redemption or any required payment upon any Triggering Event (as defined in the Series H Certificate of Designations. The holders of the Series H Preferred Shares are also entitled to receive a dividend make-whole payment. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series H Certificate of Designations), the Series H Preferred Shares accrue dividends at the rate of 15% per annum. In connection with a Triggering Event, each holder of the Series H Preferred Shares will be able to require us to redeem in cash any or all of the holder’s Series H Preferred Shares at a premium set forth in the Series H Certificate of Designations. If such Triggering Event occurs, our financial condition and results of operations could be materially affected. If we do not have sufficient cash resources to make these payments, we may need to raise additional equity or debt capital, and we cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient capital to meet our payment obligations, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of our assets or merge with another entity. Our ability to make payments due to the holders of our Series H Preferred Shares using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as certain provisions of the Delaware General Corporation Law (the “DGCL”). Additionally, the holders of the Series G Preferred Stock are entitled to dividends of 10% per annum, compounded monthly, which are payable in arrears monthly, at the holder’s sole discretion, in cash, or “in kind” in the form of additional Series G Preferred Stock, or a combination thereof. If we do not have sufficient cash resources to make these payments, we may need to raise additional equity or debt capital, and we cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient capital to meet our payment obligations, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of our assets or merge with another entity. Our ability to make payments due to the holders of our Series H Preferred Stock and Series G Preferred Stock using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as certain provisions of the DGCL. Certain outstanding shares of preferred stock and common stock purchase warrants of the Company contain anti-dilution provisions that may result in the reduction of the conversion price of the applicable preferred stock or the exercise price of such warrants in the future. These features may increase the number of shares of Common Stock being issuable upon conversion of such preferred stock or upon the exercise of such warrants. The Series H Certificate of Designations and Series G Certificate of Designations and the warrants issued concurrently therewith (as applicable, the “Series G Warrants” or the “Series H Warrants”), as well as the warrants (as applicable, the “Series F Warrants” or the “Series F-1 Warrants”) issued in connection with the issuance of the Company’s Series F Convertible Preferred Stock, par value $0.001 per share (“Series F Preferred Stock”) and Series F-1 Convertible Preferred Stock, par value $0.001 per share (“Series F-1 Preferred Stock”), contain anti-dilution provisions, which provisions require the lowering of the applicable conversion price or exercise, as then in effect, to the purchase price of equity or equity-linked securities issued in subsequent offerings. If in the future, while any of our Series H Preferred Stock, Series G Preferred Stock, Series H Warrants or Series F Warrants, Series F Warrants, and Series F-1 Warrants are outstanding, we issue securities for a consideration per share of Common Stock (the “New Issuance Price”) that is less than the applicable conversion price of our preferred stock or the exercise price of the warrants, as then in effect, we will be required, subject to certain limitations and adjustments as provided in the applicable Certificate of Designations or the applicable warrants, to reduce the conversion price or the exercise price to be equal to the New Issuance Price, which will result in a greater number of shares of Common Stock being issuable upon conversion or exercise, as applicable, which in turn will increase the dilutive effect of such conversion or exercise on existing holders of our Common Stock. It is possible that we will not have a sufficient number of shares available to satisfy the conversion of the Series H Preferred Stock or Series G Preferred Stock or the exercise of the Series H Warrants, Series G Warrants or Series F Warrants, or Series F-1 Warrants if we enter into a future transaction that reduces the applicable conversion price or exercise price. If we do not have a sufficient number of available shares for any such conversions or any such warrant exercises, we may need to seek stockholder approval to increase the number of authorized shares of our Common Stock, which may not be possible and will be time-consuming and expensive. The potential for such additional issuances may depress the price of our Common Stock regardless of our business performance and may make it difficult for us to raise additional equity capital while any of our Series H Preferred Stock, Series G Preferred Stock or Series G Warrants, Series H Warrants, Series F Warrants, or Series F-1 Warrants are outstanding. The Series H Certificate of Designations and Series G Certificate of Designations contains restrictive covenants and terms that may make it difficult to procure additional financing and that may affect our financial condition and results of operations. The Series H Certificate of Designations and Series G Certificate of Designations contains certain restrictive covenants including but not limited to, maintaining a Cash Minimum (as defined in the Series H Certificate of Designations), restrictions on incurring any indebtedness until the date on which no Series H Preferred Shares or Series G Preferred Stock are outstanding, subject to certain exceptions, restrictions on directly or indirectly, redeeming, repurchasing or declaring or paying any cash dividend or distribution on any of our capital stock (other than as required by the applicable Certificate of Designations and subject to certain exceptions as set forth therein), and restrictions on directly or indirectly, permitting any of our indebtedness to mature or accelerate prior to the Maturity Date (as defined in the Series H Certificate of Designations). Additionally, the Series H Preferred Shares and Series G Preferred Stock also contains certain purchase rights (the “Purchase Rights”) permitting the holders of the applicable preferred stock to acquire upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of all of its Series H Preferred Shares or shares of Series G Preferred Stock. These restrictive covenants may limit our flexibility in raising capital or incurring any indebtedness, which may have an adverse effect on our financial condition. Under the Series H Purchase Agreement and Series G Purchase Agreement, we are subject to certain restrictive covenants that may make it difficult to procure additional financing. The Series H Purchase Agreement contains, among others, the following restrictive covenants: (A) unless Stockholder Approval is obtained, the Company may not effect (i) any Dilutive Issuance (as defined in the Series H Certificate of Designations) or (ii) without the prior written consent of the Required Holders (as defined in the Series H Certificate of Designations), issue or sell (or enter into any agreement or publicly announce the intention to grant, issue or sell) securities containing any anti-dilution price-based adjustments, (B) until ninety (90) days following the earlier of (x) the date on which this registration statement is declared effective or (y) the date on which the selling stockholders may sell their Series H Conversion Shares or shares of Common Stock issuable upon exercise of the warrants issued in connection with the Series H Preferred Stock (the “Series H Warrants”) without restriction pursuant to Rule 144 under the Securities Act, we may not issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security, (C) until all of the Series H Warrants are no longer outstanding, we shall be prohibited from effecting or entering into an agreement to effect any subsequent placement involving a variable rate transaction, and (D) until the later of (i) the Maturity Date (as defined in the Series H Certificate of Designations), and (ii) the date in which no Series H Preferred Shares remain outstanding, the Company must provide the holders of the Series H Preferred Shares the opportunity to participate in any subsequent securities offerings by us. The Series G Purchase Agreement, pursuant to which we issued the Series G Preferred Stock, contains, among others, the following restrictive covenants: (i) until all of the Series G Warrants are exercised, we agreed not to enter into any variable rate transactions; and (ii) until the later of no shares of Series G Preferred Stock being outstanding and the second anniversary of the Series G Closing Date, the opportunity to participate in any subsequent securities offerings by us. If we require additional funding while these restrictive covenants remain in effect, we may be unable to effect a financing transaction on terms acceptable to us, or at all, while also remaining in compliance with the terms of each purchase agreement, or we may be forced to seek a waiver from the investors party to each purchase agreement, which such investors are not obligated to grant to us. 18 General Risk Factors Offers or availability for sale of a substantial number of shares of our Common Stock may cause the price of our Common Stock to decline. Sales of a significant number of shares of our Common Stock in the public market could harm the market prices of our Common Stock and make it more difficult for us to raise funds through future offerings of Common Stock or other securities. Our stockholders and the holders of our options and warrants may sell substantial amounts of our Common Stock in the public market. In addition, the fact that our stockholders can sell substantial amounts of our Common Stock in the public market, whether or not sales have occurred or are occurring, could make it more difficult for us to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, or at all. An active trading market for our Common Stock may not be sustained. The listing of our Common Stock on The Nasdaq Capital Market (“Nasdaq”) does not assure that a meaningful, consistent and liquid trading market exists. An active trading market for shares of our Common Stock may not be sustained. If an active market for our Common Stock is not sustained, it may be difficult for investors to sell their shares either without depressing the market price for the shares or at all. We are subject to various internal control reporting requirements under the Sarbanes-Oxley Act. We can provide no assurance that we will at all times in the future be able to report that our internal controls over financial reporting are effective. As a public company, we are required to comply with Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). In any given year, we cannot be certain as to the time of completion of our internal control evaluation, testing and remediation actions or of their impact on our operations. Upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC and Public Company Accounting Oversight Board (U.S.) rules and regulations. Our management, including our principal executive officer and principal financial officer, does not expect that our internal controls and disclosure controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions, such as growth of the company or increased transaction volume, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. In addition, as a public company, we are required to report, among other things, control deficiencies that constitute material weaknesses or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual consolidated financial statements will not be prevented or detected on a timely basis. If we fail to comply with the requirements of Section 404 or if we report a material weakness, we might be subject to regulatory sanction and investors may lose confidence in our consolidated financial statements, which may be inaccurate if we fail to remedy such material weakness. 19 We incur increased costs and demands on management as a result of compliance with laws and regulations applicable to public companies, which could harm our operating results. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. In addition, the Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules implemented by the SEC and Nasdaq, impose a number of requirements on public companies, including with respect to corporate governance practices. Our management and other personnel need to devote a substantial amount of time to these compliance and disclosure obligations. Moreover, compliance with these rules and regulations has increased our legal, accounting and financial compliance costs and has made some activities more time-consuming and costly. It is also more expensive for us to obtain director and officer liability insurance. If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted. Our common stock is currently listed for trading on The Nasdaq Capital Market. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum stockholders’ equity of $2.5 million and a minimum closing bid price of $1.00 per share or risk delisting, which would have a material adverse effect on our business. A delisting of our common stock from The Nasdaq Capital Market could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. As previously disclosed, on March 17, 2025, we received a written notice (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market indicating that for the last 30 consecutive business days, the bid price for our Common Stock had closed below the minimum $1.00 per share requirement for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The letter also indicated that the Company will be provided with a compliance period until September 15, 2025 (the “Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On September 16, 2025, the Company received written notice from Nasdaq that Nasdaq determined the Company regained compliance with Nasdaq Listing Rule 5550(a)(2), and considers the matter closed. There is no assurance that we will maintain compliance with minimum listing requirements in the future. If our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital. We may issue additional equity securities in the future, which may result in dilution to existing investors. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. The combined Company may, from time to time, sell additional equity securities in one or more transactions at prices and in a manner it determines. If we sell additional equity securities, existing stockholders may be materially diluted. In addition, new investors could gain rights superior to existing stockholders, such as liquidation and other preferences. In addition, the number of shares available for future grant under our equity compensation plans may be increased in the future. In addition, the exercise or conversion of outstanding options or warrants to purchase shares of capital stock may result in dilution to our stockholders upon any such exercise or conversion. In addition, we may be required to issue an indeterminate number of shares of Common Stock to the holders of our Series H Preferred Stock, Series G Preferred Stock and related warrants upon the conversion or exercise of either, as applicable. See “Risk Factors—Risks Related to Our Preferred Stock— Holders of our Series H Preferred Stock, and Series G Preferred Stock are entitled to certain payments under the applicable Certificate of Designations that may be paid in cash, in shares of Common Stock or in additional shares of Series G Preferred Stock depending on the circumstances. If we make these payments in cash, it may require the expenditure of a substantial portion of our cash resources. If we make these payments in Common Stock, it may result in substantial dilution to the holders of our Common Stock.” and “Risk Factors—Risks Related to Our Preferred Stock—The Certificate of Designations for the Series H Preferred Stock and Series G Preferred Stock and the warrants issued concurrently therewith contain anti-dilution provisions that may result in the reduction of the conversion price of the applicable preferred stock or the exercise price of such warrants in the future. These features may increase the number of shares of Common Stock being issuable upon conversion of the Series H Preferred Stock and Series G Preferred Stock or upon the exercise of the warrants.” 20 We do not anticipate paying cash dividends on our Common Stock and, accordingly, stockholders must rely on stock appreciation for any return on their investment. We have never declared or paid cash dividends on our Common Stock and do not expect to do so in the foreseeable future. So long as any shares of Series H Preferred Stock or Series G Preferred Stock are outstanding, as they are at this time, we are not able to declare or pay any cash dividend or distribution on any of our capital stock (other than as required by the respective Certificate of Designations) without the prior written consent of the Required Holders (as defined in the respective Certificate of Designations). The declaration of dividends is further subject to the discretion of our board of directors and limitations under applicable law, and will depend on various factors, including our operating results, financial condition, future prospects and any other factors deemed relevant our board of directors. You should not rely on an investment in us if you require dividend income from your investment in us. The success of your investment will likely depend entirely upon any future appreciation of the market price of our Common Stock, which is uncertain and unpredictable. There is no guarantee that our Common Stock will appreciate in value. If securities analysts do not publish research or reports about our business, or if they publish negative evaluations, the price of our Common Stock could decline. The trading market for our Common Stock relies in part on the availability of research and reports that third-party industry or financial analysts publish about us. There are many large, publicly traded companies active in the technology, blockchain, and laser computing industries, which may mean it will be less likely that we receive widespread analyst coverage. Furthermore, if one or more of the analysts who do cover the Company (if any) downgrades our stock, our stock price would likely decline. If one or more of these analysts cease coverage of the Company, we could lose visibility in the market, which in turn could cause our stock price to decline. Additionally, if securities analysts publish negative evaluations of competitors in the technology and computing industries, the comparative effect could cause our stock price to decline. Anti-takeover provisions of our certificate of incorporation, our bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board and management. Certain provisions of our certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other change of control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. Furthermore, these provisions could prevent or frustrate attempts by our stockholders to replace or remove members of our board of directors. These provisions also could limit the price that investors might be willing to pay in the future for our securities, thereby depressing the market price of our securities. Stockholders who wish to participate in these transactions may not have the opportunity to do so. These provisions, among other things: ● allow the authorized number of directors to be changed only by resolution of our board of directors; ● authorize our board of directors to issue, without stockholder approval, preferred stock, the rights of which will be determined at the discretion of the board of directors and that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that our board of directors does not approve; ● establish advance notice requirements for stockholder nominations to our board of directors or for stockholder proposals that can be acted on at stockholder meetings; and ● limit who may call a stockholder meeting. In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law that may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time. We may be subject to securities litigation in the future. Companies that have experienced volatility in the market price of their stock have frequently been the objects of securities class action litigation. We may be the target of this type of litigation in the future. Class action and derivative lawsuits could result in substantial costs to us and cause a diversion of our management’s attention and resources, which could materially harm our financial condition and results of operations. With respect to any litigation, our insurance may not reimburse us, or may not be sufficient to reimburse us, for the expenses or losses we may suffer in contesting and concluding such lawsuit. Substantial litigation costs, including the substantial self-insured retention that we are required to satisfy before any insurance applies to a claim, unreimbursed legal fees or an adverse result in any litigation may adversely impact our business, operating results or financial condition. We believe that our directors’ and officers’ liability insurance will cover our potential liability with respect to any securities class-action lawsuit; however, the insurer has reserved its rights to contest the applicability of the insurance to such claims and the limits of the insurance may be insufficient to cover any eventual liability. Current market and economic conditions in one or more of our markets could impact our ability to grow our business. Over the last few years in the U.S. and globally, market and economic conditions have been challenging, particularly in light of public health pandemics and, more recently, as a result of uncertainty concerning government shutdowns, debt ceilings, government funding and trade wars. Any negative impact on economic conditions and international markets, continued volatility or deterioration in the debt and equity capital markets, heightened inflation, deflation or other adverse economic conditions may adversely affect our business, liquidity, financial condition, cash flows and results of operations and could cause the market value of our common shares and/or debt securities to decline. 21