What changed in this filing

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Item 1A. Risk Factors

2026-04-02 compared with 2025-04-15 · 368 added, 650 removed, 551 unchanged (65% of the section changed)

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the trading price of our common stock may decline and you may lose all or part of your investment.

Related to Our Financial Condition

have a history of losses, we can provide no assurance that we will ever become profitable, and our auditors concluded that there is substantial

doubt about our ability to continue as a going concern.

incurred net losses available to common stockholders of $23,257,000 ended December 31, 2023, and had accumulated deficits of $49,172,000 and $25,915,000 as of December 31, 2024 and 2023, respectively.

In addition, net

cash used by operating activities was $8,556,000 for the year ended December 31, 2024.

Based upon this and our internally generated

cash flow projections, our auditors concluded that there is substantial doubt about our ability to continue as a going concern for the

next 12 months.

Our future profitability is dependent upon our ability to successfully execute upon our business plan.

We can provide

no assurance that we will be able to sustain or increase profitability on a quarterly or annual basis.

Accordingly, we may continue to

generate losses in the future and, in the extreme case, may need to discontinue operations.

Related to Our Company

have a history of losses, we can provide no assurance that we will ever become profitable,

and the audit report issued by M&K CPAs, PLLC in connection with our audited financial

statements as of and for the year ended December 31, 2025 includes an explanatory paragraph

stating that there is substantial doubt about our ability to continue as a going concern.

will need to raise additional capital in the future, which capital may not be available or,

if available, may not be available on acceptable terms.

growth could strain our personnel and infrastructure resources.

acquisitions and other transactions that we complete in the future could prove difficult

to integrate, disrupt our business, adversely affect our operating results and dilute stockholder

depend upon our executive officers and may not be able to retain or replace these individuals

or recruit additional personnel if they leave, which could harm our business.

success depends on our SemiCab technology platform attaining market acceptance by transportation

failure or inability to enforce our trademarks, trade secrets and other proprietary rights

could adversely affect our image, brands and competitive position.

may not be able to protect our intellectual property rights throughout the world.

information technology systems or data, or those of our service providers or customers or

users, could be subject to cyber-attacks or other security incidents, which could result

in significant liability, reputational damage and other adverse consequences to us.

failure of our information technology systems could significantly disrupt the operation of

our business.

rely on third parties for most of our management information systems and for other back-office

to protect the integrity and security of personal information of our customers and employees

could result in substantial costs, expose us to litigation and damage our reputation.

in the use of AI technologies in our SemiCab business may result in reputational harm or

liability to us, and our business, operating results, and financial results may be adversely

significant changes in U.S.

trade or other policies that block or restrict imports or increase

import tariffs could have a material adverse effect on results of operations.

business, financial condition and results of operations may be materially adversely affected

by any negative impact on the global economy and capital markets resulting from the conflict

in Ukraine and the Middle East and other geopolitical tensions.

inflation and unfavorable economic conditions could negatively affect our business, financial

condition and results of operations.

are exposed to the credit risk of customers who are experiencing financial difficulties and

if these customers are unable to pay us, our revenue and results of operations will be adversely

may have trouble hiring additional qualified personnel.

industries in which we operate are subject to international, federal, state and local laws,

compliance with which is both complex and costly.

could be a party to litigation that could adversely affect us by diverting management attention,

increasing our expenses and subjecting us to significant monetary damages and other remedies.

certificate of incorporation provides limitations on director liability and indemnification

of directors and officers and employees.

insurance may not provide adequate levels of coverage against claims.

inability or failure to recognize, respond to and effectively manage the accelerated impact

of social media could materially adversely impact our business.

impairment in the carrying value of our fixed assets, intangible assets or goodwill could

adversely affect our financial condition and results of operations.

are subject to risks related to the sale of our Singing Machine business.

● Significant

adverse weather conditions and other disasters could negatively impact our results of operations.

Related to the Streeterville Transaction

sale of a substantial number of our securities in the public market by Streeterville and/or

by our existing security holders could cause the price of our common stock to fall.

of our common stock purchased by Streeterville may be issued at a price significantly below

the prevailing market price of our common stock, resulting in substantial dilution of existing

stockholders and a decrease in the price of our common stock.

may be required to make substantial cash payments to Streeterville, which could reduce the

amount of cash available to fund our operations.

Related to Ownership of Our Securities

may raise additional funds in the future through the issuance of equity securities or debt,

which funding may be dilutive to stockholders or impose operational restrictions on us.

market price of our common stock is likely to be highly volatile and subject to wide fluctuations.

quarterly and annual operating results may fluctuate due to increases and decreases in sales

and other factors.

common stock may be affected by price fluctuations, which could adversely impact the value

of our common stock.

sales practice requirements may limit a stockholder’s ability to buy and sell our securities.

investment in our securities is speculative, and there can be no assurance of any return

on any such investment.

identified material weaknesses in our internal control over financial reporting during the

assessment of our internal control that we performed in connection with the preparation of

our audited consolidated financial statements included herein.

we are unable to establish and maintain an effective system of internal control, we may not

be able to accurately report our financial results on a timely basis or prevent fraud.

requirements of being a public company may strain our resources, divert management’s

attention and affect our ability to attract and retain qualified board members.

we are not able to comply with the applicable continued listing requirements of the Nasdaq,

it could delist us, which may adversely affect the market price and liquidity of our common

laws, regulations, and standards relating to corporate governance and public disclosure may

create uncertainty for public companies, increase legal and financial compliance costs and

make some activities more time consuming.

a “smaller reporting company” under applicable law, we are subject to lessened

disclosure requirements, which could leave our stockholders without information or rights

available to stockholders of more mature companies.

SEC rules governing the trading of “penny stocks” may limit the trading and liquidity

of our common stock, which may affect the trading price of our common stock.

have never paid any dividends on our common stock and do not intend to pay any dividends on our common stock in the foreseeable future.

Related to Our Company

have a history of losses, we can provide no assurance that we will ever become profitable, and the audit report issued by M&K CPAs,

PLLC in connection with our audited financial statements as of and for the year ended December 31, 2025 includes an explanatory paragraph

stating that there is substantial doubt about our ability to continue as a going concern.

incurred net losses available to common stockholders of $15,900,000 and $23,257,000 for our fiscal years ended December 31, 2025 and

2024, respectively, and had accumulated deficits of $65,072,000 and $49,172,000 as of December 31, 2025 and 2024, respectively.

net cash used by operating activities was $7,309,000 and $3,985,000 for our fiscal years ended December 31, 2025 and 2024, respectively.

Based upon this, our current cash resources and our internally generated cash flow projections, the audit report issued by M&K CPAS,

PLLC in connection with our audited financial statements as of and for the year ended December 31, 2025 includes an explanatory paragraph

stating that there is substantial doubt about our ability to continue as a going concern.

Our future profitability is dependent upon

our ability to successfully execute upon our business plan.

We can provide no assurance that we will be able to sustain or increase profitability

on a quarterly or annual basis.

Accordingly, we may continue to generate losses in the future and, in the extreme case, may need to discontinue

will need to raise additional capital in the future, which capital may not be available or, if available, may not be available on acceptable

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we are optimistic about our ability to raise sufficient funds to continue our operations for at least one year after the date of this

report, we have not made arrangements to obtain additional capital and can provide no assurance that additional financing will be available

in an amount or on terms acceptable to us, if at all.

Our ability to obtain additional capital will be subject to a number of factors,

including maintenance of our listing on the Nasdaq Stock Market (“Nasdaq”), market conditions and our operating performance.

These factors may make the timing, amount, terms or conditions of any proposed future financing transactions unattractive to us.

cannot raise additional capital when needed, or if such capital cannot be obtained on acceptable terms, we may not be able to pay our

costs and expenses as they are incurred, take advantage of future acquisition opportunities, respond to competitive pressures or unanticipated

events, or otherwise execute upon our business plan.

This may adversely affect our business, financial condition and results of operations

and, in the extreme case, cause us to discontinue operations.

Related to Our Company

report, we have not made arrangements to obtain additional capital and can provide no assurance that additional financing will be

available in an amount or on terms acceptable to us, if at all.

Our ability to obtain additional capital will be subject to a number

of factors, including maintenance of our listing on the Nasdaq, market conditions and our operating

These factors may make the timing, amount, terms or conditions of any proposed future financing transactions unattractive

If we cannot raise additional capital when needed, or if such capital cannot be obtained on acceptable terms, we may not be able

to pay our costs and expenses as they are incurred, take advantage of future acquisition opportunities, respond to competitive pressures

or unanticipated events, or otherwise execute upon our business plan.

This may adversely affect our business, financial condition and

results of operations and, in the extreme case, cause us to discontinue operations.

growth could strain our personnel and infrastructure resources.

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which was the owner of the United States component of our AI logistics and distribution business.

We may continue to expand our business

through the acquisition of additional businesses in the future.

On May 2, 2025, we and SemiCab Holdings

completed the acquisition of substantially all of the issued and outstanding equity shares of SMCB and we purchased the 20% membership

interest in SemiCab Holdings then held by SemiCab, Inc.

We may continue to expand our business through the acquisition of additional

businesses in the future.

successfully execute any acquisition or development strategy, we need to identify suitable acquisition or development candidates, negotiate

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goodwill, investments and other intangible assets.

depend upon our executive officers and may not be able to retain or replace these individuals or recruit additional personnel, which

could harm our business.

believe that we have benefited substantially from the leadership and experience of our executive officers, including Gary Atkinson,

who is our Chief Executive Officer, Alex Andre, who is our Chief Financial Officer and General Counsel, and Bernardo Melo, who is

our Chief Revenue Officer.

Our executive officers may terminate their employment with us at any time without penalty, and we do not

maintain key person life insurance policies on any of our executive officers.

The loss of the services of any of our executive

officers could have a material adverse effect on our business and prospects, as we may not be able to find suitable individuals to

replace such personnel on a timely basis.

In addition, any such departure could be viewed in a negative light by investors and

analysts, which could cause the price of our common stock to decline.

As our business expands, our future success will depend

greatly on our continued ability to attract and retain highly skilled and qualified executive-level personnel.

Our inability to

attract and retain qualified executive officers could impair our growth and have an adverse effect on our business, financial

condition and results of operations.

failure or inability to enforce our trademarks, trade secrets and other proprietary rights could adversely affect our competitive position

or the value of our brands.

registered trademarks for many of the signs, designs and expressions that identify the products and services that we use in

our business, including “The Singing Machine” and “SemiCab”.

We also have common law trademark rights for certain

of our proprietary marks and rely upon trade secrets to protect certain of our rights.

We believe that our trademarks, trade secrets

and other proprietary rights have significant value and are important to our business and competitive position.

We, therefore, devote

time and resources to the protection of these rights.

Our policy is to pursue registration of our important trademarks whenever feasible

and to oppose vigorously any infringement of our trademarks.

We protect our trade secrets and proprietary information, in part, by entering

into confidentiality agreements with our employees and consultants.

We also seek to preserve the integrity and confidentiality of our

proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology

depend upon our executive officers and may not be able to retain or replace these individuals or recruit additional personnel if they

leave, which could harm our business.

believe that we have benefited substantially from the leadership and experience of our executive officers, including Gary Atkinson, who

is our Chief Executive Officer, and Alex Andre, who is our Chief Financial Officer and General Counsel.

Our executive officers may terminate

their employment with us at any time without penalty, and we do not maintain key person life insurance policies on any of our executive

The loss of the services of any of our executive officers could have a material adverse effect on our business and prospects,

as we may not be able to find suitable individuals to replace such personnel on a timely basis.

In addition, any such departure could

be viewed in a negative light by investors and analysts, which could cause the price of our common stock to decline.

As our business

expands, our future success will depend greatly on our continued ability to attract and retain highly skilled and qualified executive-level

Our inability to attract and retain qualified executive officers could impair our growth and have an adverse effect on our

business, financial condition and results of operations.

Our success depends on our SemiCab technology

platform attaining market acceptance by transportation providers.

The continued growth

in market demand for and market acceptance of our SemiCab technology platform is critical to our continued success.

Demand for our SemiCab

technology platform is affected by a number of factors, many of which are beyond our control, including the extension of our SemiCab

technology platform for new use cases, the timing of development and release of new products, features and functionality introduced by

us or our competitors, technological change and the growth or contraction of the market in which we compete.

We may be unable to effectively

adapt our platform and respond to changes in technology and customer needs.

If we are unable to meet customer demand, or if we otherwise

fail to achieve more widespread market acceptance of our SemiCab technology platform, our business, results of operations, financial

condition and growth prospects may be adversely affected.

failure or inability to enforce our trademarks, trade secrets and other proprietary rights could adversely affect our image, brands and

competitive position.

registered trademarks for many of the signs, designs and expressions that identify the services that we use in our business,

including “SemiCab”.

We also have common law trademark rights for certain of our proprietary marks and rely upon trade secrets

to protect certain of our rights.

We believe that our trademarks, trade secrets and other proprietary rights have significant value and

are important to our business and competitive position.

We, therefore, devote time and resources to the protection of these rights.

policy is to pursue registration of our important trademarks whenever feasible and to oppose vigorously any infringement of our trademarks.

We protect our trade secrets and proprietary information, in part, by entering into confidentiality agreements with our employees and

We also seek to preserve the integrity and confidentiality of our proprietary information by maintaining physical security

of our premises and physical and electronic security of our information technology systems.

cannot assure you that the protective actions that we have taken will successfully prevent unauthorized use or imitation of our intellectual

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may not be able to protect our intellectual property rights throughout the world.

prosecuting, and defending intellectual property rights on our products in international jurisdictions is prohibitively expensive.

may use our technologies in jurisdictions where we have not obtained intellectual property rights to develop their own products and,

further, may export otherwise infringing products to territories where we have intellectual property rights, but where enforcement is

not as strong as that in the U.S.

These products may compete with our products in jurisdictions where we do not have any issued or licensed

patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing.

prosecuting, and defending intellectual property rights on our technology in international jurisdictions is prohibitively expensive.

Competitors may use our technologies in jurisdictions where we have not obtained intellectual property rights to develop their own technology

and, further, may export otherwise infringing technology to territories where we have intellectual property rights, but where enforcement

is not as strong as that in the U.S.

Their technology may compete with our technology in jurisdictions where we do not have any issued

or licensed patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from

companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual

property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products

in violation of our proprietary rights generally.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial

cost and divert our efforts and attention from other aspects of our business.

property protection, which could make it difficult for us to stop the infringement of any patents we may have in the future, or the use

of competing technologies in violation of our proprietary rights generally.

Proceedings to enforce any patent rights we may have in the

future in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

information technology systems or data, or those of our service providers or customers or users, could be subject to cyber-attacks or

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affect our reputation and results of operations and could result in litigation against us or the imposition of fines and penalties.

Issues in the use of AI technologies in our

SemiCab business may result in reputational harm or liability to us, and our business, operating results, and financial results may be

adversely affected.

We actively integrate AI technologies

in our SemiCab platform to enhance automation, analytics, customer experience, and operational efficiency.

As we expand the use of AI-enabled

capabilities, we are exposed to risks inherent in the development and deployment of emerging technologies.

AI systems may generate inaccurate,

biased, incomplete, or unintended outputs due to limitations in algorithms, data quality, model design, or oversight.

If AI-enabled features

fail to perform as intended or are perceived as unreliable, we could experience reputational harm, customer dissatisfaction, competitive

disadvantage, or legal exposure.

Certain AI capabilities rely on

third party service providers, cloud infrastructure, or external models.

Disruptions, security incidents, pricing changes, contractual

restrictions, or termination of such services could impair the availability or performance of AI-enhanced features and increase our costs.

The regulatory framework governing

AI, data privacy, and automated decision-making is evolving in the United States and internationally.

New or expanded legal requirements

may require product modifications, increased compliance expenditures, or limitations on certain AI-driven functionality.

Our AI-enabled features process

sensitive customer data.

Any failure to maintain appropriate safeguards, governance controls, or oversight could result in regulatory

scrutiny, litigation, or reputational harm.

We have implemented

governance frameworks, human oversight, security controls, and monitoring processes designed to manage risks associated with AI-enabled

capabilities.

However, these measures may not be sufficient to prevent errors, misuse, security incidents, or regulatory non-compliance.

If our risk management efforts are ineffective, our business, financial condition, and results of operations could be adversely affected.

significant changes in U.S.

trade or other policies that block, or restrict imports or increase import tariffs could have a material

adverse effect on results of operations.

karaoke products are manufactured in southern China.

In recent years, the U.S.

trade or other policies that block or restrict imports or increase import tariffs could have a material adverse

effect on results of operations.

recent years, the U.S.

government has implemented substantial changes to U.S.

trade policies, including import restrictions, increased import tariffs and changes in U.S.

participation in multilateral trade agreements,

such as the United States-Mexico-Canada Agreement to replace the former North American Free Trade Agreement.

government has

assessed supplemental tariffs on certain goods imported from China, resulting in China’s assessment of retaliatory tariffs on certain

imports of U.S.

goods into China and block imports from Myanmar.

In addition, the United States has assessed or proposed supplemental

tariffs and quantitative restrictions on U.S.

imports of certain products from other countries as well.

trade policy continues to

evolve in this regard.

Such changes could prevent or make it difficult or more expensive for us to obtain our products, which could affect

Further tariff increases could require us to increase prices, which likely would decrease customer demand for our products.

Retaliatory tariff and trade measures imposed by other countries could affect our ability to export products and therefore adversely

affect sales.

trade policies, including import restrictions, increased

import tariffs and changes in U.S.

participation in multilateral trade agreements, such as the United States-Mexico-Canada Agreement

to replace the former North American Free Trade Agreement.

government has assessed supplemental tariffs and quantitative restrictions

imports of certain products from numerous countries throughout the world.

trade policy continues to evolve in this regard.

Any significant changes in current U.S.

trade or other policies that restrict imports or increase import tariffs could

have a material adverse effect upon results of our operations.

trade or other policies that restrict imports or increase import tariffs could have a material

adverse effect upon results of our operations.

business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy

and capital markets resulting from the conflict in Ukraine and the Middle East and other geopolitical tensions.

and global markets are experiencing volatility and disruption as a result of the escalation of geopolitical tensions and the start of

the military conflict between Russia and Ukraine.

On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has lead to

market disruptions, including significant volatility in credit and capital markets.

military interventions in Ukraine have led to sanctions and other penalties being levied by the U.S., European Union and other countries

against Russia.

and global markets are experiencing volatility and disruption as a result of the escalation of geopolitical tensions and military

conflicts in and around Ukraine, Israel, and other areas of the world.

Although the length and impact of any potential or ongoing military conflict is highly unpredictable, such conflicts have led to market

disruptions, including significant volatility in credit and capital markets.

For example, Russia’s

military interventions in Ukraine have led to sanctions and other penalties being levied by the U.S., European Union and other

countries against Russia.

Additional potential sanctions and penalties have also been proposed and/or threatened.

Russian military actions and

the resulting sanctions could adversely affect the global economy and financial markets.

In addition, the invasion of Ukraine and the

resulting sanctions imposed on Russia have resulted in increased volatility in the financial markets and the markets for certain commodities

including oil, which may significantly impact the manufacturers that we rely on.

Russian military

actions and the resulting sanctions could adversely affect the global economy and financial markets.

addition, acts of war, terrorism or political instability in oil producing countries (e.g.

the invasion of Ukraine by Russia and

conflicts in the Middle East, including the recent escalation involving Iran, and recent U.S.

intervention in Venezuela) have resulted in increased volatility in the financial markets and the

markets for certain commodities including oil, which may significantly impact the manufacturers that we rely on.

Additionally,

the conflict in the Middle East between Israel and the government of Hamas in Gaza has caused disruptions in shipping lanes in the Red

the conflict in the Middle East between Israel and the government of Hamas in Gaza, Hezbollah in Lebanon, as well as groups in Syria and Iran, have caused disruptions in shipping lanes in the Red

Sea where some major cargo lines have opted to route their vessels away from the region which has increased the time required to reach

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line disruptions and delays may impact the availability and cost of shipping containers during peak shipping season.

we have not experienced any direct impact from the conflicts in the Ukraine and the Middle East, the extent and duration of the military

action, sanctions and resulting market and shipping lane disruptions are impossible to predict but could be substantial and could adversely

affect our operating results as they impact the global economy in the future.

we have not experienced any direct impact from the conflicts in and around Ukraine, the Middle East and elsewhere, the extent and duration of the

military action, sanctions and resulting market and shipping lane disruptions are impossible to predict but could be substantial and

could adversely affect our operating results as they impact the global economy in the future.

inflation and unfavorable economic conditions could negatively affect our business, financial condition and results of operations.

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levels, inflationary pressures or disruptions to credit and capital markets, could lead to decreased consumer confidence and consumer

spending more generally, thus reducing consumer demand for our products.

spending more generally, thus reducing consumer demand for our services.

Such heightened inflationary levels and economic conditions

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our revenue and results of operations will be adversely impacted.

sell products to retailers, including national chains, warehouse clubs, department stores, lifestyle merchants, specialty stores, and

direct mail catalogs and showrooms.

Deterioration in the financial condition of our customers could result in these customers not being

able to pay us for our products and services.

This would have a negative impact on our revenue and results of operations.

sell our services primarily to large, fast-moving consumer goods companies.

Deterioration in the financial condition of our customers

could result in these customers not being able to pay us for our services.

This would have a negative impact on our revenue and results

of operations.

may have trouble hiring additional qualified personnel.

we expand our product development and marketing activities, we will need to hire additional personnel and could experience difficulties

attracting and retaining qualified employees.

Competition for qualified personnel could be intense due to the limited number of individuals

who possess the skills and experience required by such an industry.

We may not be able to afford, attract and retain quality personnel

on favorable terms, or at all.

In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such

personnel have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former

employers own their product or service ideas.

Any of these events could have a material adverse effect on our business, financial condition

and results of operations.

we expand our technology development, service offerings and marketing activities, we will need to hire additional personnel and could

experience difficulties attracting and retaining qualified employees.

Competition for qualified personnel could be intense due to the

limited number of individuals who possess the skills and experience required by such an industry.

We may not be able to afford, attract

and retain quality personnel on favorable terms, or at all.

In addition, to the extent we hire personnel from competitors, we may be

subject to allegations that such personnel have been improperly solicited or that they have divulged proprietary or other confidential

information, or that their former employers own their technology or service ideas.

Any of these events could have a material adverse

effect on our business, financial condition and results of operations.

industries in which we operate are subject to international, federal, state and local laws, compliance with which is both complex and

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have a material adverse effect on our business, financial condition and results of operations.

could be party to litigation that could adversely affect us by diverting management attention, increasing our expenses and subjecting

could be a party to litigation that could adversely affect us by diverting management attention, increasing our expenses and subjecting

us to significant monetary damages and other remedies.

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of operations.

charter provides limitations of director liability and indemnification of directors and officers and employees.

certificate of incorporation provides limitations on director liability and indemnification of directors and officers and employees.

certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law.

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will be required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired.

are subject to risks related to the sale of our Singing Machine business.

August 1, 2025, we entered into an asset purchase agreement with SMC and Stingray USA pursuant to which Stingray USA purchased substantially

all of the assets, and assumed most of the liabilities, associated with our Singing Machine business.

The transaction closed on August

Accordingly, we no longer own or operate the Singing Machine business line.

In connection with the transaction, we also entered

into a transitional services agreement with Stingray USA to provide certain limited services following the closing.

The performance of

these services by us and other related conditions outside of our control could adversely affect our operations and future financial results.

a result of the sale of our Singing Machine business, we became a smaller, less diversified company than we were prior to the transaction,

which could make us more vulnerable to factors impacting our performance, such as changing market conditions and market volatility.

addition, while it is intended that the transaction be tax-free to our stockholders for U.S.

federal income tax purposes, there is no

assurance that the transaction will qualify for this treatment.

If the sale is ultimately determined to be taxable, we or our stockholders

could incur income tax liabilities that could be significant.

Any of these factors could have a material adverse effect on our business,

financial condition, results of operations, cash flows, and the price of our common stock.

adverse weather conditions and other disasters could negatively impact our results of operations.

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adverse effect on our business, financial condition and results of operations.

Related to Our Karaoke Business

we are unable to develop new karaoke products, our revenues may not continue to grow.

karaoke industry is characterized by rapid technological change, frequent new product introductions and enhancements and ongoing customer

demands for greater performance.

In addition, the average selling price of any karaoke machine has historically decreased over its life,

and we expect that trend to continue.

As a result, our products may not be competitive if we fail to introduce new products or product

enhancements that meet evolving customer demands.

The development of new products is complex, and we may not be able to complete development

in a timely manner.

To introduce products on a timely basis, we must:

define and design new products to meet market demand;

features that continue to differentiate our products from those of our competitors;

our products to new manufacturing process technologies;

emerging technological trends in our target markets;

changes in end-user preferences with respect to our customers’ products;

products to market on a timely basis at competitive prices;

effectively to technological changes or product announcements by others.

will need to continue to enhance our karaoke machines and develop new machines to keep pace with competitive and technological developments

and to achieve market acceptance for our products.

At the same time, we will need to continue to identify and develop other products

that may be different from our existing karaoke machines.

manufacturing operations are located in China, subjecting us to risks associated with the manufacturing and shipping of our products.

currently use several contract manufacturers in China to manufacture all our karaoke products.

Our arrangements with these contract manufacturers

are subject to the risks of doing business abroad, such as import duties, trade restrictions, work stoppages, and foreign currency fluctuations,

limitations on the repatriation of earnings and political instability, which could have an adverse impact on our margins.

we have limited control over the manufacturing processes.

As a result, any difficulties encountered by our third-party manufacturers

that result in product defects, production delays, cost overruns or the inability to fulfill orders on a timely basis could adversely

affect our revenues, profitability and cash flow.

Also, since we do not have written agreements with any of these contract manufacturers,

we are subject to additional uncertainty if the contract manufacturers do not deliver products to us on a timely basis.

rely principally on a limited number of contract ocean carriers to ship substantially all of our karaoke products that we import to our

outsourced warehouse facility in Chino, California.

Retailers that take delivery of our products in China rely on a variety of carriers

to import those products.

Any disruptions in shipping, whether in California or China, caused by labor strikes, other labor disputes,

terrorism, and international incidents may prevent or delay our customers’ receipt of our products.

If our customers do not receive

their products on a timely basis, they may cancel their orders or return the products to us.

This would negatively impact our revenue

and results of operations.

rely upon third party suppliers for the components that are incorporated into our karaoke products and if we were unable to obtain these

components as needed, our operations would be adversely affected.

growth and ability to meet customer demand depends in part on our ability to obtain timely deliveries of karaoke machines and our electronic

We rely on third party suppliers to manufacture the parts and materials that are incorporated into these products.

If our suppliers

are unable to provide our factories with the components needed, we will be unable to manufacture our products.

For example, there has

been recent worldwide volatility in the supply of electronic chips due to the increased demand for semiconductors and we are currently

competing with large companies to obtain these parts and could see production and shipment delays.

We cannot guarantee that we will be

able to purchase the components we need at reasonable prices or in a timely fashion.

If we are unable to anticipate and address any shortages

of parts and materials in the future, we may experience manufacturing and delivery delays, which would negatively impact our sales and

depend on the ability of our suppliers to manufacture our products without infringing, misappropriating or otherwise violating the intellectual

property rights or proprietary rights of others.

source our products from a variety of contract manufacturers.

We buy finished goods from our suppliers and generally do not source the

raw materials and components incorporated into the final products.

We rely on our contract manufacturers’ ability to secure injected

plastic, wood cabinets, integrated circuits, display panels, speaker drivers, and other components that are necessary for the manufacture

of our final products.

While we are not responsible for sourcing raw materials, we rely on these suppliers to have all required licenses

and proprietary rights to the materials that are incorporated into our final products.

In addition, we rely on the representations of

our contract manufacturers that they are using materials and components that meet all necessary legal, safety, and compliance requirements.

If our suppliers do not have the proper licenses or rights or are not in compliance with all regulatory requirements, we may be named

a party in disputes or be subject to claims, including claims of infringement or violating the intellectual property or proprietary rights

of third parties, with respect to our products.

in government regulations relating to international tariffs could significantly reduce our revenues, product cost and profitability.

government administration and members of the U.S.

Congress have recently implemented significant changes in U.S.

trade policy and taken

certain actions that are impacting our business, including imposing tariffs on certain goods imported into the United States.

these changes have triggered retaliatory actions by affected countries and may result in “trade wars” and increased costs

for goods imported into the United States.

All of our products are manufactured and imported from China and we sell our products in Canada

and other countries.

The implementation of tariffs has resulted in an increase in the cost of our products.

If we are unable to mitigate

these increased costs through price increases, we may experience lower sales which would negatively impact our revenue, gross profit

margin and results of operations.

small number of our customers account for a substantial portion of the revenue we generate from our karaoke business and the loss of

one or more of these key customers would negatively impact our revenue and cash flow.

rely on a few large customers to provide for a substantial portion of our revenue.

Sales to our top five customers and top three

customers collectively in our karaoke business comprised 79% and 81% of our revenue, respectively, for the year ended

December 31, 2024 and the nine- month transition period ended December 31, 2023, respectively.

We do not have long-term contractual

arrangements with any of our customers and they can cancel their orders at any time prior to delivery.

A reduction in or termination

of orders from any of these customers would negatively impact our revenue and cash flow.

customers may return karaoke products that they have purchased from us which would result in a reduction in our revenue and cash flow.

incur significant product returns from our customers and expect to incur additional returns in the returns.

The return of products is

due to a variety of reasons, including defective units, customers’ overstock and buyer’s remorse.

In addition, the factories

that we utilize for the manufacture of our products charge customary repair and freight costs, which increase our expenses and reduce

our cash flow.

If any of our customers increase the volume of their returned karaoke products to us, our revenue and cash flow would

be negatively impacted.

are subject to pressure from our customers relating to price reduction and financial incentives that negatively impact our revenue and

cash flow from sales of our karaoke products.

are subject to pricing pressure from our customers due to intense competition in the karaoke industry.

Many of our customers have demanded

that we lower our prices to remain competitive with other companies offering karaoke products.

If we do not meet our customers’

demands to lower our regular prices, we may not sell as many karaoke products.

Additionally, we are also subject to pressure from our

customers regarding certain financial incentives, such as return credits or large cooperative promotion incentives, which effectively

reduce our revenue and cash flow.

We have historically offered these co-op promotion incentives to our customers because it is standard

practice in the retail industry.

We incurred co-op promotion incentives of $2,100,000 and $2,600,000 for the year ended December 31,

2024 and the nine-month transition period ended December 31, 2023, respectively.

In the event we continue to experience pricing pressure

from our customers and continue to offer co-op promotion incentives to our customers, our revenue and cash flow will be negatively impacted.

we do not accurately forecast the demand for our karaoke products, our revenue, cash flow and results of operations will be adversely

production lead times range from one to four months due to our reliance on manufacturers in China for the production of our karaoke products.

Therefore, we must commit to production in advance of customers’ orders.

It is difficult for us to forecast customer demand because

we do not have any scientific or quantitative method to predict this demand.

Our forecasting is based on our general expectations about

customer demand, the general strength of the retail market and our historical experiences.

In past years we have overestimated demand

for our products, which led to excess inventory in some of our products.

In the event we fail to accurately forecast demand for our karaoke

products in the future, our revenue, cash flow and results of operations will be adversely affected.

are subject to the costs and risks of carrying inventory for our customers and if we have too much inventory, it will negatively affect

our cash flow from operations.

karaoke business is seasonal in nature.

Many of our customers place orders with us several months prior to the holiday season, but they

schedule delivery two or three months before the holiday season begins.

As such, we are subject to the risks and costs of carrying inventory

during the time period between the placement of the order and the delivery date, which reduces our cash flow.

If we are forced to maintain

excessive inventory levels in the future, we may incur higher storage costs which will have a material adverse effect on our cash flow

and results of operations.

are subject to insurance risk of loss for karaoke products that are damaged while in transit from the manufacturer to the customer and

our warehouse.

of our karaoke products are manufactured in China and are transported to customers and our warehouse in California via ocean vessel.

The risk of loss remains with us until the products are delivered.

As a result, we are subject to the risk that these products could

be damaged while they are in transit to customers or our warehouse.

While we have taken significant measures to reduce the likelihood

of our products being damaged, we cannot guarantee that our products won’t be damaged in the future.

We have obtained insurance

coverage for products that are shipped direct import to our customers and for goods in transit to our California warehouse.

Notwithstanding

this, certain exclusions apply that may prevent insurance from covering a loss.

In the event our products are damaged while in transit

in the future, we could experience a significant loss of revenue and inventory and incur significant out-of-pocket expenses, all of which

would have a negative impact on our cash flow and results of operations.

karaoke business is seasonal and therefore our annual operating results will depend, in large part, on our sales during the relatively

brief holiday season.

of consumer electronics and toy products in the retail channel are highly seasonal, with a majority of retail sales occurring during

the period of September through December in anticipation of the holiday season.

A substantial majority of our sales occur during our

fiscal quarters ended September 30 th and December 31 st .

Sales in these two quarters accounted for 79% and 91% of

our revenue for the year ended December 31, 2024 and the nine-month transition period ended December 31, 2023, respectively.

we fail to generate sufficient sales of our products during this period in future years, our revenue and results of operations will be

negatively adversely affected.

discretionary spending may affect karaoke purchases and is affected by various economic conditions and changes.

of karaoke machines and music are considered discretionary for consumers.

Our success will therefore be influenced by a number of economic

factors affecting discretionary and consumer spending, such as employment levels, business, interest rates, and taxation rates, none

which are under our control.

Additionally, other extraordinary events such as terrorist attacks or military engagements could occur which

may adversely affect the retail environment negatively impact consumer spending.

Any such events would have an adverse affect on our

revenue and results of operations.

our third-party logistics provider experiences disruptions to the operation of its distribution centers, it could have a material adverse

effect on our business, financial condition and results of operations.

do not have our own warehouse or distribution facilities for our karaoke products, but instead rely upon a third-party logistics provider

that is responsible for warehousing and fulfilling our orders.

With the exception of direct import, all of our merchandise is shipped

from our suppliers to one of our provider’s distribution facilities and then packaged and shipped from our distribution facilities

to our customers.

The success of our business depends on our timely receipt of our products so that we can continuously bring new, on-trend

products online for sale.

The success of our business also depends on customer orders being timely processed and delivered to meet promised

delivery dates and satisfy our customers.

The efficient flow of our merchandise requires that we have adequate capacity and uninterrupted

service in our distribution facilities to support both our current level of operations.

Upgrading our existing arrangement or transferring

our operations to another third-party provider, if necessary, would require us to incur additional costs, which could be significant,

and may require us to obtain additional financing.

Our failure to provide adequate order fulfillment, secure additional distribution

capacity when necessary or retain a suitable third-party logistics provider could increase our costs, which in turn could have a material

adverse effect on our business, financial condition and results of operations.

addition, if our current provider encounters difficulties associated with its distribution facilities or if they were to shut down or

be unable to operate for any reason, including because of fire, natural disaster, power outage or other event, we could face inventory

shortages, resulting in “out-of-stock” conditions on our website and delays in shipments, resulting in lost revenue, significantly

higher costs and longer lead times distributing our merchandise.

production costs may increase if we are required to make purchases using the Chinese Yuan instead of the U.S.

of our karaoke products are currently manufactured in China.

During the year ended December 31, 2024 and the nine-month transition period

ended December 31, 2023, the Chinese local currency had no material effect on us as all of our purchases are denominated in the U.S.

If, in the future, our purchases are required to be made in Chinese local currency, the Yuan, we will be subject to the risks

involved in foreign exchange rates.

The value of the Yuan depends largely on the Chinese government’s policies and China’s

domestic and international economic and political developments.

As a result, our production costs may increase if we are required to

make purchases using the Yuan instead of the U.S.

dollar and the value of the Yuan increases over time.

Any significant increase in the

cost of manufacturing our products would have a material adverse effect on our business and results of operations.

also sell some of our karaoke products to Canadian customers, some of whom require us to invoice them in Canadian dollars.

This subjects

us to risks involved in the exchange rate between the Canadian and U.S.

The exchange rate has been stable during the year ended

December 31, 2024 and the nine-month transition period ended December 31, 2023, and the associated exchange rates did not have a material

impact on our financial results.

Should the exchange rate between the Canadian and U.S dollar become more volatile and sales to Canadian

customers increase, the use of Canadian dollars could have a material adverse effect on our business.

profit margin may be negatively impacted by higher raw material prices and higher production and shipping costs.

in the price of oil, electronic chip components and shipping costs have and will continue to affect the sourcing and delivery of the

raw materials and services used in the manufacture and shipping of our karaoke products.

If we are not able to negotiate lower costs,

reduce other expenses, or pass on some or all of these costs to our customers, our profit margin may be adversely affected.

we are unable to compete in the karaoke products category, our revenue, cash flows and results of operations will be negatively impacted.

major competitors for karaoke machines and related products are Singsation ® , Singtrix ® , eKids ® ,

Bonaok, Karaoke USA™, Ion ® Audio, licensed property karaoke product companies and other consumer electronics companies.

In addition, we compete with companies offering other forms of entertainment, including motion pictures, video arcade games, home video

games, theme parks, nightclubs, television, prerecorded tapes, CDs, DVDs and streaming video.

Many of our direct and indirect competitors

are well-established national and international companies that have been in business longer than we have, have greater consumer awareness

than we do, and have substantially greater capital, marketing and human resources than we do.

As our competitors expand their operations

and as new competitors enter the industry, we expect competition to intensify.

Increased competition could result in price reductions,

decreases in profitability and loss of market share by us.

are subject to intense pricing pressure for our karaoke products.

We expect that the intense pricing pressure existent in the market

for karaoke products will continue in the future.

We believe that competition for karaoke machines and other forms of entertainment is

based primarily on price, product features, reputation, delivery times, and customer support.

In the event we are unable to compete successfully

with our current and future competitors, our business, financial condition and results of operations could be materially and adversely

we ship products that contain defects, the market acceptance of our karaoke products and our reputation will be harmed and our customers

could seek to recover their damages from us.

products are complex and, despite extensive testing, may contain defects or undetected errors or failures that become apparent only after

our products have been shipped to our customers or after product features or new versions are released.

Any such defect, error or failure

could result in reduced market acceptance of our products, damage to our reputation, or damage to our relations with our customers, resulting

in the cancellation of orders, warranty costs and product returns.

In addition, any defects, errors, misuse of our products or other

potential problems within or out of our control that may arise from the use of our products could result in financial or other damages

to our customers.

Our customers could seek to have us pay for these losses.

Although we maintain product liability insurance, it may

not be adequate to cover us for these losses.

In the event we experience significant defects, errors or failures with our karaoke products,

or in the event we incur losses for financial and other damages suffered by our customers that are not covered by insurance, our business

and results of operations could be negatively impacted.

Related to Our AI Logistics and Distribution Business

transportation industry historically has experienced cyclical fluctuations in financial results that could negatively impact our business

and results of operations.

has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles, interest rate fluctuations,

currency fluctuations, and other economic factors.

Many of these cyclical fluctuations are beyond SemiCab’s control.

in SemiCab’s business will negatively impact our revenues.

in freight volumes resulting from supply chain disruptions or other factors may impact working capital needs.

reduction in overall freight volumes in the marketplace may occur due to supply chain disruptions or overall economic conditions.

addition, a downturn in customer business cycles could cause a reduction in the volume of freight shipped by those customers and result

in a reduction in freight rates.

During 2023 and 2024, SemiCab experienced a decline in freight volumes as shippers struggled with elevated

inventory levels and consumer demand was negatively impacted by inflation and macroeconomic uncertainty.

As its volumes increase or SemiCab

increases freight rates charged to its customers, the resulting increase in revenues may increase its working capital needs due to its

business model, which generally has a higher length of days sales outstanding than days payables outstanding.

business is susceptible to numerous expense challenges which may impact operating results.

may not be able to appropriately adjust its expenses to changing market demands.

In periods of rapid change, it may be difficult to match

its staffing levels to its business needs.

Higher carrier prices may result in decreased adjusted gross profit margin and a need for

working capital.

Carriers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses.

SemiCab’s adjusted gross profits and income from operations may decrease if SemiCab is unable to increase its pricing to its customers.

Increased demand for over the road transportation services and changes in regulations may reduce available capacity and increase motor

carrier pricing.

In the event market conditions change and its contracted rates are below market rates, SemiCab may be required to provide

transportation services at a loss.

Changing fuel prices and interruptions in fuel supplies may also impact SemiCab, negatively impacting

its gross profit margin.

is dependent on third parties which may impact the provision of its services.

dependence on third parties to provide equipment and services may impact the delivery and quality of its transportation and logistics

SemiCab depends on independent third parties to provide trucking services and to report certain events to them, including but

not limited to, shipment status information and freight claims.

These independent third parties may not fulfill their obligations to

SemiCab, or SemiCab’s relationship with these parties may change, which may prevent SemiCab from meeting its commitments to its

SemiCab’s reliance on these third parties also could cause delays in reporting certain events, including recognizing

If SemiCab is unable to secure sufficient equipment or other transportation services from third parties to meet its commitments

to its customers, its operating results could be materially and adversely affected, and its customers could switch to its competitors

temporarily or permanently.

challenges in the transportation industry may impact SemiCab’s results of operations and operating cash flows.

transportation industry may also be significantly impacted by disruptions such as the availability of transportation equipment, as well

as factors such as labor shortages, fuel prices, shifts in consumer demand toward more locally sourced products, and regulatory changes.

These disruptions may impact the growth rates within the logistics industry and SemiCab’s ability to provide transportation services

for its customers, each of which may adversely impact its results of operations and operating cash flows.

faces substantial competition in the logistics and distribution industry.

in the digital freight industry is intense and broad-based.

SemiCab competes with traditional and non-traditional logistics companies,

including transportation providers that own equipment, third-party freight brokers, technology matching services, internet freight brokers,

carriers offering logistics services, and on-demand transportation service providers.

In addition, customers can offer in-house some

of the services SemiCab provides to them.

Increased competition could reduce the market opportunity for SemiCab’s services and

create downward pressure on freight rates.

Continued rate pressure may adversely affect SemiCab’s adjusted gross profits and income

from operations.

business may be adversely affected by seasonality.

business may be adversely impacted by seasonal changes or significant disruptions in the transportation industry.

Results of operations

for the industry generally show a seasonal pattern as customers reduce shipments during and after the winter holiday season.

believes this historical pattern has been the result of, or influenced by, numerous factors, including national holidays, weather patterns,

consumer demand, economic conditions, and other similar and subtle forces.

Although seasonal changes in the transportation industry have

not had a significant impact on its cash flow or results of operations, SemiCab expects this trend to continue, and it cannot guarantee

it will not adversely impact SemiCab in the future.

relies on technology to operate its business.

has internally developed the majority of its operating systems and also relies on technology provided by third parties.

Its continued

success is dependent on its systems continuing to operate and meet the changing needs of its customers and users.

The continued automation

of existing processes and usage of third-party technology and cloud network capacity will require adaptation and adjustments that may

increase its exposure to cybersecurity risks and system availability reliance.

SemiCab relies on its technology staff and third-party

vendors to successfully implement changes to, and to maintain, its operating systems in an efficient manner.

If SemiCab fails to maintain,

protect, and enhance its operating systems, it may be at a competitive disadvantage and lose customers.

demonstrated by recent material and high-profile data security breaches, computer malware, viruses, computer hacking, and phishing attacks

have become more prevalent, and may occur on SemiCab’s operating systems.

SemiCab can offer no assurance that any future attacks

will have little to no impact on its business.

Furthermore, given the interconnected nature of the supply chain and its significant presence

in the industry, it may be an attractive target for such attacks.

The insurance coverage held by SemiCab may not apply to a particular

loss or it may not be sufficient to cover all liabilities to which we may be subject.

A loss for which SemiCab is not adequately insured

could materially affect its financial results.

it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, a significant impact on

the performance, reliability, security, and availability of SemiCab’s operating systems and technical infrastructure to the satisfaction

of its users may harm its reputation, impair its ability to retain existing customers or attract new customers, and expose it to legal

claims and government action, each of which could have a material adverse impact on its financial condition, results of operations, and

growth prospects.

international operations subject it to complex and ever-changing operational, financial, and data privacy risks .

provides services within foreign countries on an increasing basis.

Its business outside of the U.S.

is subject to various risks, including:

in managing or overseeing foreign operations and agents;

on the repatriation of funds because of foreign exchange controls;

currency fluctuations;

liability standards;

property laws of countries that do not protect its intellectual property rights, including but not limited to, its proprietary information

systems, to the same extent as the laws of the U.S;

related to non-compliance with laws, rules, and regulations in the countries in which it operates including the U.S.

Foreign Corrupt

Practices Act and similar regulations;

laws and regulations regarding the collection, use, processing, and transfer of personal information may impact its services by imposing

restrictions on processing, increase legal claim liability, and increase regulatory scrutiny and fines.

addition, foreign currency fluctuations could result in currency exchange gains or losses or could affect the book value of its assets

and liabilities.

Furthermore, SemiCab may experience unanticipated changes to its income tax liabilities resulting from changes in geographical

income mix and changing international tax legislation.

If SemiCab does not correctly anticipate changes in international economic and

political conditions and comply with applicable laws and regulations, its business and results of operations could be negatively impacted.

may not be able to hire and retain qualified employees .

continued success depends upon its ability to attract and retain motivated logistics and technology professionals.

In periods of rapid

change, it may be more difficult to match its staffing level to its business needs.

SemiCab cannot guarantee it will be able to continue

to hire and retain a sufficient number of qualified personnel to sustain the growth in its business.

In addition, macroeconomic factors

impacting the labor market may result in higher costs to hire and retain qualified personnel.

Because of its highly experienced employee

base, its employees are attractive targets for new and existing competitors.

Continued success depends in large part on its ability to

develop successful employees into managers and architects.

may fail in its efforts to expand its use of machine learning and AI technologies and may be subject to risks and liabilities in the

event it does expand its use of machine learning and AI technologies.

SemiCab fails to successfully integrate AI into its platform and business processes, or if it fails to keep pace with rapidly evolving

AI technological developments, including attracting and retaining talented AI developers and programmers and cybersecurity personnel,

it may face a competitive disadvantage.

At the same time, the use or offering of AI technologies may result in new or expanded risks

and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical concerns, confidentiality,

reputational harm, and security risks.

It is not possible to predict all of the risks related to the use of AI.

Changes in laws, rules,

directives, and regulations governing the use of AI may adversely affect the ability of SemiCab to develop and use AI or subject SemiCab

to legal liability.

The cost of complying with laws and regulations governing AI could be significant Further, market demand and acceptance

of AI technologies are uncertain, there may be challenges to further incorporate AI into SemiCab’s processes.

Each of these risks

could adversely affect SemiCab’s business, financial condition, and results of operations.

have integrated, and may continue to integrate in the future, AI in our logistics and distribution services.

AI technology presents various

operational, compliance, and reputational risks and if any such risks were to materialize, our business and results of operations may

be adversely affected.

have integrated AI technologies into our logistics and distribution services.

We may continue to integrate AI technologies in new product

or service offerings.

Given that AI is a rapidly developing technology that is in its early stages of business use, it presents a number

of operational, compliance and reputational risks.

AI algorithms are currently known to sometimes produce unexpected results and behave

in unpredictable ways (e.g., “hallucinatory behavior”) that can generate irrelevant, nonsensical, fictitious, deficient,

offensive or factually incorrect content and results, which, if incorporated into our platform, may result in reputational harm to us

and be damaging to our brand.

Additionally, content, analyses or recommendations that are based on AI might be found to be biased, discriminatory

Data sets from which large language models learn are at risk of poisoning or manipulation by bad actors, resulting in offensive

or undesired output.

Similarly, the data set could contain copyrighted material resulting in infringing output.

AI output might present

ethical concerns or violate current and future laws and regulations.

expect that there will continue to be new laws or regulations concerning the use of AI technology, which might be burdensome for us to

comply with and may limit our ability to offer or enhance our existing tools and features or new offerings based on AI technology.

the use of AI technology involves complexities and requires specialized expertise.

We may not be able to attract and retain top talent

to support our AI technology initiatives.

If any of the operational, compliance or reputational risks were to materialize, our business

and results of operations may be adversely affected.

may be subject to risks associated with artificial intelligence and machine learning technology.

technological advances in AI and machine learning technology may pose risks to us.

Our use of AI could give rise to legal or regulatory

action, create liabilities, or materially harm our business.

While we aim to develop and use AI and machine learning technology responsibly

and attempt to mitigate ethical and legal issues presented by its use, we may ultimately be unsuccessful in identifying or resolving

issues before they arise.

Further, as the technology is rapidly evolving, costs and obligations could be imposed on us to comply with

new regulations.

also could be exposed to the risks of machine learning technology if third-party service providers or any counterparties, whether or

not known to us, also use machine learning technology in their business activities.

We will not be in a position to control the use of

such technology in third-party products or services.

Use by third-party service providers could give rise to issues pertaining to data

privacy, data protection, and intellectual property considerations.

business is dependent on a single customer .

derives almost all of its revenue from a single customer.

This customer accounted for 99% of its revenue for the year ended December

31, 2024 and the nine-month transition period ended December 31, 2023.

The sudden loss of this customer would materially and adversely

affect its operating results.

may be subject to a variety of claims arising from its transportation operations .

uses the services of thousands of third-party transportation companies in connection with its transportation operations.

time, the drivers employed and engaged by the motor carriers with which SemiCab contracts are involved in accidents, which may result

in serious personal injuries.

The resulting types and amounts of damages may be excluded by or exceed the amount of insurance coverage

maintained by the contracted motor carrier.

SemiCab contractually requires all motor carriers it works with to carry at least $1,000,000

in automobile liability insurance.

SemiCab also requires all contracted motor carriers to maintain workers’ compensation and other

insurance coverage as required by law.

Most contracted motor carriers have insurance exceeding these minimum requirements, as well as

cargo insurance in varying policy amounts.

Although these drivers are not employees of SemiCab and all of these drivers are employees,

owner-operators, or independent contractors of the contracted motor carriers, claims may be asserted against SemiCab.

Claims against

SemiCab may exceed the amount of its insurance coverage or may not be covered by insurance at all.

A material increase in the frequency

or severity of accidents, liability claims, workers’ compensation claims, or unfavorable resolutions of claims could materially

and adversely affect SemiCab’s operating results.

In addition, significant increases in insurance costs or the inability to purchase

insurance as a result of these claims could reduce its profitability.

SemiCab’s involvement in the transportation of certain goods,

including but not limited to, hazardous materials, could also increase its exposure in the event one of its contracted motor carriers

is involved in an accident resulting in injuries or contamination.

its customer contracts, SemiCab may agree to assume cargo liability up to a stated maximum.

Although SemiCab is not legally liable for

loss or damage to its customers’ cargo, from time to time, claims may be asserted against SemiCab for cargo losses.

SemiCab maintains

a broad contingent cargo liability insurance policy to help protect it against catastrophic losses that may not be recovered from the

responsible contracted carrier.

SemiCab also carries various liability insurance policies, including automobile and general liability

business is subject to numerous government regulations .

operations are regulated and licensed by various federal, state, and local transportation agencies in the U.S.

and similar governmental

agencies in foreign countries in which it operates.

SemiCab is subject to licensing and regulation as a property freight broker and

is licensed by the DOT to arrange for the transportation of property by motor vehicle.

The DOT prescribes qualifications for acting in

this capacity, including certain surety bonding requirements.

SemiCab also has and maintains other licenses as required by law.

failure to maintain required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation

of its operating permits and licenses

or regulatory changes could affect the economics of the transportation industry by requiring changes in operating practices or influencing

the demand for, and the cost of providing, transportation services.

SemiCab may experience an increase in operating costs, such as security

costs, as a result of governmental regulations that have been or will be adopted in response to terrorist activities and potential terrorist

No assurance can be given that SemiCab will be able to pass these increased costs on to its customers in the form of rate

increases or surcharges, and its operations and results of operations may be materially and adversely affected as a result.

Related to the Streeterville Transaction

sale of a substantial number of our securities in the public market by Streeterville and/or by our existing security holders could cause

the price of our common stock to fall.

August 21, 2025, we completed the Streeterville Transaction.

As of March 27, 2026, we had completed Pre-Paid Purchases for the aggregate

amount of $21,285,000 and had repaid Pre-Paid Purchases in the aggregate amount of $9,845,000 as a result of Streeterville electing to

exercise its right to purchase a total of 11,303,264 shares of our common stock under the First Pre-Paid Purchase, Second Pre-Paid Purchase

and Third Pre-Paid Purchase.

The Second Pre-Paid Purchase and Third Pre-Paid Purchase have been paid off in full.

However, we have principal

in the amount of approximately $1,085,000 and $10,355,000 outstanding under the First Pre-Paid Purchase and Fourth Pre-Paid Purchase,

respectively.

In the event Streeterville elects to exercise its right to purchase additional shares of our common stock under the First

Pre-Paid Purchase or Fourth Pre-Paid Purchase, we may be required to issue a substantial number of additional shares of our common stock

to Streeterville.

The sale of a substantial number of our shares of common stock in the public market by Streeterville and/or by our

other existing security holders, or the perception that those sales might occur, could result in a significant decline in the public

trading price of our common stock.

of our common stock purchased by Streeterville may be issued at a price significantly below the prevailing market price of our common

stock, resulting in substantial dilution of existing stockholders and a decrease in the price of our common stock .

the funding of each Pre-Paid Purchase, Streeterville has the right, but not the obligation, to purchase from us that number of shares

of common stock up to the lesser of:

(i) a number of shares of common stock equal in value to the outstanding balance of the funded amount,

and (ii) that number of shares of common stock such that Streeterville will not beneficially own greater than 9.99% of our outstanding

shares of common stock.

The price per share used to calculate the number of shares to be issued to Streeterville is equal to 90% of the

lowest daily volume-weighted average price of our common stock during the ten (10) trading days immediately preceding the applicable

purchase date, but not less than the floor price, which is the greater of:

(i) 20% of the Minimum Price prior to the applicable closing

of the Pre-Paid Purchase, and (ii) $0.10.

If Streeterville exercises its right to purchase additional shares of our common stock under

Pre-Paid Purchases, the shares may be sold by us to Streeterville at a price significantly below the prevailing market price.

lead to substantial dilution of existing stockholders.

This dilution, combined with the potential for downward pressure on our share

price if Streeterville promptly sells the shares in the open market, could reduce the market value of our common stock significantly.

may be required to make substantial cash payments to Streeterville, which could reduce the amount of cash available to fund our operations.

Streeterville chooses to not exercise its right to purchase shares of common stock from us, we will be required to repay any outstanding

Pre-Paid Purchases in cash.

We may not have sufficient cash on hand or available resources to meet such a repayment obligation, which

could force us to seek emergency financing or other arrangements which may not be available or, if available, may be on unfavorable terms.

In the event we do have sufficient funds available, the cash payment obligations, if triggered, could significantly reduce the cash we

have available to fund our operations or make necessary investments.

This would adversely affect our financial condition, limit our ability

to pursue growth opportunities, and adversely affect our business prospects.

addition, the occurrence of an event of default under the Pre-Paid Purchases or certain change-of-control or other fundamental transactions

may accelerate repayment or suspend Streeterville’s funding obligations to us.

If an event of default occurs under a Pre-Paid Purchase,

the outstanding balance will become immediately due and payable.

At any time thereafter, upon written notice given by Streeterville,

the outstanding balance will increase by seven-and-a half percent and interest will begin accruing at a rate of the lesser of 18% per

annum or the maximum rate permitted under applicable law.

If we are involved in a change-of-control or other fundamental transaction,

we may be required to repay the Pre-Paid Purchases in cash.

We may not have sufficient cash on hand or available resources to meet such

a repayment obligation, which could force us to seek emergency financing or other arrangements which may not be available or, if available,

may be on unfavorable terms.

In the event we do have sufficient funds available, the cash payment obligations, if triggered, could significantly

reduce the cash we have available to fund our operations or make necessary investments.

This would adversely affect our financial condition,

limit our ability to pursue growth opportunities, and adversely affect our business prospects.

Related to Ownership of Our Securities

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December 6, 2024, we completed a public offering of an aggregate of 21,000 shares of our common stock, pre-funded warrants to purchase

up to 258,412 shares of common stock, Series A warrants to purchase up to 279,412 shares of common stock, and Series

B warrants to purchase up to 279,412 shares of common stock.

Immediately prior to the completion of the offering, we had 14,215,176 shares

of our common stock outstanding.

Additionally, due to price adjustment provisions contained in the Series A and Series B warrants, the

Series A warrants became exercisable into 1,133,652 shares of common stock and the Series B warrants became exercisable into 1,910,975

shares of our common stock.

All of the pre-funded warrants and Class B warrants were exercised in their entirety.

As a result of the offering,

shareholders who owned shares immediately prior to the completion of the offering experienced immediate and substantial dilution as a

result of the issuance of the shares of common stock on December 6, 2024 and the subsequent exercise of the pre-funded warrants and Class

up to 258,412 shares of common stock, Series A warrants to purchase up to 279,412 shares of common stock, and Series B warrants to purchase

up to 279,412 shares of common stock.

Immediately prior to the completion of the offering, we had 71,076 shares of our common stock outstanding.

Additionally, due to price adjustment provisions contained in the Series A and Series B warrants, the Series A warrants became exercisable

into 1,133,652 shares of common stock and the Series B warrants became exercisable into 1,910,975 shares of our common stock.

the pre-funded warrants and Class B warrants were exercised in their entirety.

August 21, 2025, we completed the Streeterville Transaction.

As of March 27, 2026, we had completed Pre-Paid Purchases for the aggregate

amount of $21,285,000 and had repaid Pre-Paid Purchases in the aggregate amount of $9,845,000 as a result of Streeterville electing to

exercise its right to purchase a total of 11,303,264 shares of our common stock under the First Pre-Paid Purchase, Second Pre-Paid Purchase

and Third Pre-Paid Purchase.

who owned shares of our common stock immediately prior to the completion of the December 6, 2024 securities offering experienced immediate

and substantial dilution as a result of the issuance of the shares of common stock on December 6, 2024 and the subsequent exercise of

the pre-funded warrants and Class B warrants.

Additionally, shareholders who owned shares of our common stock immediately prior to the

dates Streeterville elected to purchase 11,303,264 shares of our common stock under the First Pre-Paid Purchase, the Second Pre-Paid

Purchase and the Third Pre-Paid Purchase experienced immediate and substantial dilution.

may need to raise additional capital through the sale of equity securities or the issuance of short- and long-term debt during the next

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the initiation of any such action could cause the price of our common stock to decline

quarterly and annual operating results may fluctuate due to increases and decreases in sales, raw material and supply costs, and other

quarterly and annual operating results may fluctuate due to increases and decreases in sales and other factors.

quarterly and annual operating results may fluctuate significantly because of a variety of factors, including:

or decreases in sales of our products and services;

or decreases in sales of our services;

ability to operate effectively in new markets;

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in consumer preferences and competitive conditions;

publicity relating to us, our vendors or the products we sell;

in the type and delivery of our raw materials and supplies;

publicity relating to us, our vendors or the services we sell;

in the availability of trucks needed to complete shipments;

consumer confidence and fluctuations in discretionary spending;

in raw material and supply costs, labor costs or other variable costs and expenses;

in labor costs or other variable costs and expenses;

distractions or unusual expenses associated with our expansion plans;

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investment in our securities is speculative, and there can be no assurance of any return on any such investment.

are cautioned that an investment in the securities offered hereby is highly speculative and involves a significant degree of risk.

success of our business and the ability to achieve our business goals and objectives, as outlined in this prospectus, are subject to

are cautioned that an investment in our securities is highly speculative and involves a significant degree of risk.

success of our business and the ability to achieve our business goals and objectives, as outlined in this report, are subject to

numerous uncertainties, contingencies and risks.

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We reported a stockholders’

deficit of $872,000 on June 30 th in that quarterly report.

Pursuant to the listing rule and instructions from Nasdaq, we submitted

a plan to regain compliance with the listing rule and were given an extension until November 14, 2024 to evidence compliance through

a public filing.

deficit of approximately $872,000 on June 30, 2024 in that quarterly report.

Pursuant to the listing rule and instructions from Nasdaq,

we submitted a plan to regain compliance with the listing rule and were given an extension until November 14, 2024 to evidence compliance

through a public filing.

November 19, 2024, we filed our Quarterly Report on Form 10-Q for our fiscal quarter ended September 30, 2024 with the SEC.

we reported stockholders’ equity of $2,700,000.

That same day we filed a Form 8-K with the SEC stating that we believed we had

regained compliance with the stockholders’ equity requirement.

On November 22, 2024, we received a letter from the Nasdaq indicating

that, based on the Form 8-K filed on November 13, 2024, the Nasdaq had determined that we were in compliance with the stockholders’

The Nasdaq advised us that it would continue to monitor our ongoing compliance with the stockholders’ equity requirement

and, if at the time of our next periodic report, we fail to comply with the requirement, we may be subject to delisting.

we reported stockholders’ equity of approximately $2,700,000.

That same day we filed a Form 8-K with the SEC stating that we believed

we had regained compliance with the stockholders’ equity requirement.

On November 22, 2024, we received a letter from the Nasdaq

indicating that, based on the Form 10-Q that we filed on November 19, 2024, the Nasdaq had determined that we were in compliance with

the stockholders’ equity rule.

The Nasdaq advised us that it would continue to monitor our ongoing compliance with the stockholders’

equity requirement and, if at the time of our next periodic report, we fail to comply with the requirement, we may be subject to delisting.

December 30, 2024, we received notice from the Nasdaq indicating that the bid price for our common stock had closed below $0.10 per share

for the 13-consecutive trading day period ended December 27, 2024 and, accordingly, we would be subject to the provisions contemplated

under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and its securities would be subject to delisting from Nasdaq unless we timely request a

under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and our securities would be subject to delisting from Nasdaq unless we timely request a

hearing before the Nasdaq hearings panel.

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a newly convened hearing panel if the initial panel is unavailable.

November 28, 2025, we received an additional letter from the Nasdaq indicating that our stockholders’ equity as reported in our

Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025, did not satisfy the continued listing requirement under

Nasdaq Listing Rule 5550(b)(1), which requires that a listed company’s stockholders’ equity be at least $2,500,000.

a stockholders’ equity of approximately $100,000 on September 30, 2025 in that quarterly report.

Pursuant to the listing rule and

instructions from Nasdaq, we submitted a plan to regain compliance with the listing rule and were given an extension until May 27, 2026

to evidence compliance through a public filing.

we were unable to meet the continued listing of the Nasdaq, our common stock could be subject to delisting.

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

What changed 10-K

Item 1A. Risk Factors