GridAI Technologies Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

Note 1 - The Company and Basis of Presentation

The Company

GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.) (the “Company”) and its wholly-owned subsidiary, First Wave Bio, Inc. (“FWB”), are collectively referred to as the “Company.” Historically, the Company focused on the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

In May 2024, the Company previously changed its name from First Wave Biopharma, Inc. to Entero Therapeutics, Inc. The Company’s historical development pipeline consisted of gut-restricted GI clinical drug candidates, including the biologic Adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients. The Company is evaluating strategic alternatives related to its historical gastrointestinal therapeutic assets while continuing development activities related to Adrulipase.

The Company terminated its license agreement with Sanofi on February 26, 2025, and no further payments have been made related to its Capeserod program, a selective 5-HT4 receptor partial agonist. The Company is also exploring strategic alternatives for its Niclosamide program, an oral small molecule with antiviral and anti-inflammatory properties.

On September 30, 2025, the Company completed a share exchange transaction with GridAI Corp., a Nevada corporation (“GridAI”), and the stockholders of GridAI (the “Sellers”), pursuant to which GridAI became a wholly-owned subsidiary of the Company (the “GridAI Acquisition”). Following the GridAI Acquisition, the Company expanded its operations to include an artificial intelligence-driven energy technology platform focused on distributed energy resource optimization and grid-edge applications. In connection with the GridAI Acquisition, the Company subsequently changed its corporate name from Entero Therapeutics, Inc. to GridAI Technologies Corp on October 1, 2025.

Pursuant to the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of GridAI in exchange for (i) an aggregate of 424,348 shares of the Company’s common stock, representing 19.99% of the issued and outstanding shares of common stock as of the date of entry into the Share Exchange Agreement, and (ii)38,801.546 shares of the Company’s Series H Non-Voting Convertible Preferred Stock, having such rights and preferences as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series H Non-Voting Convertible Preferred Stock filed with the Delaware Secretary of State on October 1, 2025. The Series H Non-Voting Convertible Preferred Stock is convertible into an aggregate of 38,801,546 shares of the Company’s common stock, subject to stockholder approval and certain conditions and adjustments as set forth in the Certificate of Designation.

See Note 3 – Business Combination – GridAI Acquisition for additional information regarding the transaction.

As of December 31, 2025, the Company’s consolidated subsidiaries include First Wave Bio, Inc., GridAI Corp., AMPX UK Holdings, and AMPX Limited. AMPX UK Holdings is a majority-owned subsidiary of the Company and is the parent of AMPX Limited. These entities are included in the Company’s consolidated financial statements.

The Company is also engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

Risks and Uncertainties

The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use as In-Process Research and Development (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with ImmunogenX, LLC (“IMGX”) which included intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). The IMGX transaction was subsequently rescinded on December 31, 2025, and the Company no longer holds the related intellectual property or patents.

As of December 31, 2025, the Company’s intangible assets primarily relate to technologies and intellectual property acquired in connection with the AMP X and GridAI transactions. Intangible assets related to IPR&D are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written off, and the Company will record a noncash impairment loss in its Consolidated Statements of Operations. For those technologies that reach commercialization, the related intangible assets will be amortized over their estimated useful lives.

For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. As of December 31, 2025, the Company had cash and cash equivalents of $899,784 and an accumulated deficit of approximately $208.8 million. The Company has incurred recurring losses, has experienced recurring negative operating cash flows, and requires significant cash resources to execute its business plans. The Company entered into a revolving loan agreement on January 27, 2025 with a principal amount of up to $2.0 million. The revolving loan matured on January 31, 2026 and wasnot repaid at maturity. On April 1, 2026, the Company received a demand letter from the lender asserting that the Company is in default under the revolving loan agreement and demanding repayment of approximately $1.0 million, including principal, accrued interest and contractual default amounts. The Company is currently in active discussions with the lender regarding this matter. The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has been, and is expected to continue, exploring various potential strategies available including but not limited to raising capital, restructuring its indebtedness and identifying and evaluating potential strategic alternatives but there can be no assurance that these efforts will be successful, that the Company will be able to raise necessary capital on acceptable terms, reach agreement with lenders, or that the strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. The Company is evaluating all potential strategic options, including a merger, reverse merger, sale, wind-down, liquidation and dissolution or other strategic transaction. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stakeholder value or that it will make any cash distributions to stockholders. Any failure in these efforts could force the Company to delay, limit or terminate operations, make reductions in its workforce, discontinue research and development programs, liquidate all or a portion of assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. If the Company is not able to obtain necessary capital, it may be required to terminate operations, liquidate all or a portion of assets and/or seek bankruptcy protection. As a result, the Company concluded that its plans at this stage do not alleviate substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of Grid AI and its wholly owned subsidiaries and FWB. Intercompany transactions and balances have been eliminated upon consolidation.

Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The accompanying consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Segment Information

The Company operates throughtwo operating segments: (i) its legacy biopharmaceutical business focused on the research and development of gastrointestinal therapeutic candidates, and (ii) its GridAI business, which focuses on the development and commercialization of artificial intelligence-driven energy optimization platforms and technologies.

The Chief Executive Officer (“CEO”), as the Company’s chief operating decision maker, reviews financial information and allocates resources between these two operating segments based on their respective business activities, strategic priorities, and capital requirements. This approach enables the CEO to assess the performance of each segment and make decisions regarding resource allocation and strategic direction.

Reverse Stock Split

On December 18, 2023, the Company effected a reverse stock split, whereby every twenty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with maturities of three months or less from date of purchase to be cash equivalents. As of December 31, 2025 and December 31, 2024, the Company has classified zero as restricted cash. A portion of the Company’s cash and cash equivalents is held by foreign subsidiaries and is denominated in foreign currencies, including British Pound Sterling and Czech Koruna.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. In addition, the Company maintains cash balances in foreign financial institutions in jurisdictions in which it operates, including the United Kingdom and the Czech Republic. The Company may from time to time have cash in banks in excess of FDIC insurance limits. Cash held outside the United States may not be subject to U.S. federal deposit insurance and may be subject to foreign exchange risk and local regulatory restrictions. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Equity-Based Payments to Non-Employees

Equity-based payments to non-employees are measured at fair value on the grant date per Accounting Standard Update (“ASU”) No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting.

Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period. See Note 5

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company hasnot recognized any impairment charges through December 31, 2025 related to goodwill.

Digital Assets

The Company is evaluating the planned acceptance of stable-coins as a form of consideration in future transactions. Under U.S. GAAP, digital assets similar to stable-coins are potentially classified within the scope of ASU 2023-08 (ASC 350-60, Crypto Assets) and would be measured at fair value with changes recognized in earnings. Digital assets that do not meet the scope criteria would continue to be accounted for as indefinite-lived intangible assets under ASC 350 and measured at cost, less impairment. The Company is currently assessing the appropriate classification and measurement for any such digital assets based on their specific characteristics. As of December 31, 2025, the Company didnot hold any stable-coins or other in-scope crypto assets.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment*(“ASC 360”*). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through December 31, 2025.

Income Taxes

Income taxes are recorded in accordance with ASC 740, Accounting for Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The Company determines its deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company operates in foreign jurisdictions, primarily in the United Kingdom, through its AMPX subsidiaries. The Company accounts for income taxes in these jurisdictions in accordance with ASC 740, including the recognition of deferred tax assets and liabilities based on local tax laws and enacted rates. Deferred tax liabilities arising from taxable temporary differences in foreign jurisdictions are evaluated in conjunction with available net operating loss carryforwards and other tax attributes. In certain foreign jurisdictions, net operating loss carryforwards are available to offset deferred tax liabilities, and accordingly, no valuation allowance has been recorded where such offsets are expected to be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. At December 31, 2025 and 2024, the Company does not have any significant uncertain tax positions.

Leases

Leases are recorded on the balance sheet as right of use assets and lease obligations. Lease liabilities are recognized based on the present value of the future minimum lease payments over the least term at the commencement date. Leases with a term of 12 months or less at inception are expensed monthly over the lease term. The lease term is determined by assuming the exercise of renewal options that are reasonably certain. The implicit interest rate or the incremental borrowing rate is used in determining the present value of future payments.

Income (Loss) Per Share

Basic income (loss) per share (“EPS”) is computed by dividing the loss attributable to common shareholders by the weighted average number of shares of Common Stock outstanding. Diluted EPS reflects the potential dilution that could occur from shares of Common Stock issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options is excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.

The dilutive effect of stock options and warrants is determined using the treasury stock method. Stock options and warrants to purchase shares of Common Stock of the Company during 2025 and 2024 were not included in the computation of diluted EPS because the Company has incurred a loss in 2025 and 2024 and the effect would be anti-dilutive. Prefunded warrants were also evaluated for inclusion in earnings per share; however, they were determined to be anti-dilutive for the year ended December 31, 2025 and the year ended December 31, 2024. See Note 18

Research and Development

The Company records intellectual property acquired in business acquisitions that has not reached technological feasibility and which has no alternative future use, as In-Process R&D (“IPR&D”) at the acquisition date. On March 13, 2024, the Company entered into an acquisition agreement with IMGX which included the intellectual property and patents for Latiglutenase and CypCel, which was accounted for as a business acquisition (see Note 3 and Note 4). Subsequent to the acquisition, the Company rescinded the IMGX transaction, which was completed on December 31, 2025. As a result, the Company no longer holds the related intellectual property or patents and derecognized associated assets of approximately $63.4 million.

Intangible assets related to IPR&D are considered definite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off, and the Company will record a noncash impairment loss on its Consolidated Statements of Operations. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. The impairment test for indefinite-lived intangible assets is a one-step test that compares the fair value of the intangible asset to its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. The Company has not recognized any impairment charges through December 31, 2025 related to IPR&D.

Following the acquisition of Grid AI Corp. on September 30, 2025, the Company’s research and development activities also include technology and platform development related to energy optimization and digital infrastructure solutions. Costs associated with these activities, primarily consisting of professional fees and personnel-related expenses, are expensed as incurred. During the year ended December 31, 2025, certain of these costs were classified within research and development expense, while other costs continued to be classified within operating expenses based on their nature.

For tax purposes, intangible assets related to IPR&D are considered indefinite-lived intangible assets.

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

Assets Held for Sale and Discontinued Operations

Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. Depreciation and amortization of assets cease upon designation as held for sale.

Discontinued operations comprise activities that were disposed of, discontinued or held for sale at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes, and represent a strategic business shift having a major effect on the Company’s operations and financial results according to ASC Topic 205, Presentation of Financial Statements.

As of December 31, 2025, the Company does not have any assets or liabilities classified as held for sale and has not presented any discontinued operations.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Energy generation revenue

Energy generation revenue is generated primarily from contracts with various non-affiliated parties under long-term power purchase agreements (“PPAs”) or feed-in tariffs. The Company recognizes energy revenue when persuasive evidence of an arrangement exists, and energy has been generated and transmitted to the grid. The price of energy is fixed or determinable and the collectability of the resulting receivable is reasonably assured.

Engineering, procurement & construction (“EPC”) revenue

The Company recognizes revenue for sale of EPC and development services over time based on the estimated progress to completion using a cost-based input method. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize.

Cost-based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy EPC and development services contracts and, therefore, reflect the transfer of goods or services to a customer under such contracts. Costs incurred towards contract completion may include costs associated with direct materials, labor, subcontractors, and other indirect costs related to contract performance.

Management fee and other revenues

Operation and maintenance (“O&M”) services are transferred over time when customers receive and consume the benefits provided by the Company’s performance under the terms of service arrangements. Revenues from O&M services are recognized when the work completed to date does not require re-performances and the costs of O&M services are expensed when incurred.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for expected credit losses, which is based on management’s assessment of the collectability of customer accounts, historical experience, and current economic conditions. As of December 31, 2025 and 2024, the Company did not record any allowance for credit losses.

Notes Payable and Warrants

The Company accounts for notes payable in accordance with applicable guidance under ASC 470, Debt. Notes payable are initially recorded at their principal amount, net of any discounts, and are subsequently measured at amortized cost using the effective interest method.

In connection with certain financing arrangements, the Company has issued warrants to purchase its common stock. The Company evaluates such warrants to determine whether they should be classified as equity or as a liability in accordance with ASC 480 and ASC 815. Warrants that meet the criteria for equity classification are recorded in additional paid-in capital, while warrants that require liability classification are recorded at fair value with changes in fair value recognized in earnings.

Foreign Currency

The Company’s functional currency is the U.S. dollar. For foreign subsidiaries, the functional currency is generally the local currency. The Company operates through subsidiaries in multiple jurisdictions, including the United Kingdom, Czech Republic, and Australia, whose functional currencies are primarily the British Pound Sterling, Czech Koruna, and Australian Dollar, respectively. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date, while income and

expense accounts are translated at average exchange rates during the period. Resulting translation adjustments are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity.

Foreign currency transaction gains and losses are recognized in the consolidated statements of operations as incurred. Transactions denominated in currencies other than the functional currency are recorded at the exchange rate in effect at the date of the transaction, and monetary assets and liabilities are remeasured at exchange rates in effect at the reporting date, with resulting gains and losses recognized in the consolidated statements of operations.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for all public entities for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 on January 1, 2025 and the adoption did not have a material effect on the Company’s financial statement disclosures.

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, introducing a practical expedient and an accounting policy election for certain entities in estimating expected credit losses for current accounts receivable and current contract assets arising from transactions within the scope of ASC 606, Revenue from Contracts with Customers. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing forecasts. ASU 2025-05 is effective for the Company beginning in the first quarter of 2026, with early adoption permitted, and should be applied prospectively. The Company is currently evaluating the potential impact of the new guidance on its consolidated financial statements; however, no material effect is expected based on the current nature of the Company’s receivables and contract assets.

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). ASU 2025-04 revises the definition of “performance condition” for share-based consideration payable to a customer, removes the policy election to account for forfeitures as they occur for awards with service conditions, and clarifies that ASC 606 variable consideration guidance does not apply to such awards. This guidance is effective for the Company beginning in the first quarter of 2027, with early adoption permitted, and may be applied on a modified retrospective or retrospective basis. The Company does not currently issue share-based consideration to customers and does not expect the adoption of ASU 2025-04 to have a material impact, but will continue to monitor for applicability.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) (“ASU 2025-03”), which clarifies the requirements for determining the accounting acquirer in the acquisition of a variable interest entity. ASU 2025-03 is effective beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of ASU 2025-03, however, does not expect it to have a material impact on its financial statements.

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt should be accounted for as induced conversions. The guidance is effective for the Company beginning in the first quarter of 2026, with early adoption permitted, and may be applied prospectively or retrospectively. While the Company has outstanding convertible debt, no induced conversions have been undertaken. Management does not expect the adoption of ASU 2024-04 to have a material impact unless future inducement transactions occur.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosures of specified expense categories, qualitative descriptions of remaining amounts in expense captions, and disclosure of selling expenses and the Company’s definition thereof. This guidance is effective for the Company beginning with the 2027 annual report, with early adoption permitted. The Company is evaluating its reporting processes to ensure compliance with the new disclosure requirements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires expanded disclosures of rate reconciliation categories, significant reconciling items, and disaggregated income taxes paid, net of refunds. The guidance is effective for the Company beginning with the 2025 annual report, with early adoption permitted, and should be applied prospectively, with retrospective adoption also permitted.

Management has reviewed the above standards and, based on the Company’s current operations and transactions, does not expect their adoption to have a material impact on the Company’s consolidated financial statements.

The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Note 3 – Business Acquisitions

IMGX Acquisition (subsequently rescinded)

On March 13, 2024, the Company acquired ImmunogenX, Inc., a Delaware corporation, in accordance with the terms of an Agreement and Plan of Merger, dated March 13, 2024 (the “Merger Agreement”), by and among the Company, IMMUNO Merger Sub I, Inc., a Delaware corporation (“First Merger Sub”), IMMUNO Merger Sub II, LLC, a Delaware limited liability company (“Second Merger Sub”), and ImmunogenX. Pursuant to the Merger Agreement, First Merger Sub merged with and into ImmunogenX, pursuant to which ImmunogenX was the surviving corporation (the “First Merger”). Immediately following the First Merger, IMGX merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity and a wholly owned subsidiary of the Company (the “Second Merger” and, together with the First Merger, the “IMGX Merger”). Second Merger Sub subsequently changed its name to ImmunogenX, LLC. The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Under the terms of the Merger Agreement, following the consummation of the Merger (the “Closing”), in exchange for the outstanding shares of capital stock of ImmunogenX immediately prior to the effective time of the First Merger, the Company issued to the stockholders of ImmunogenX an aggregate of (A)36,830 shares of Common Stock, and (B)11,777.418 shares of Series G Preferred Stock, each share of which is convertible into 1,000 shares of Common Stock, upon shareholder approval. Following the closing of the acquisition, the Company had 2,303,135 shares of common stock issued and outstanding.

The Company incurred transaction costs of approximately $5.5 million which are included in the Company’s condensed consolidated statement of operations.

In addition, the Company assumed (i) all ImmunogenX stock options immediately outstanding prior to the First Merger, each becoming an option to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Options”) and (ii) all ImmunogenX warrants immediately outstanding prior to the First Merger, each becoming a warrant to purchase Common Stock subject to adjustment pursuant to the terms of the Merger Agreement (the “Assumed Warrants”). The Assumed Options are exercisable for an aggregate of 200,652 shares of Common Stock, have an exercise price of $0.81 and expire between February 1, 2031 and June 6, 2033. The Assumed Warrants are exercisable for an aggregate of 127,680 shares of Common Stock, have exercise prices ranging from $3.03 to $3.92 and expire between September 30, 2032 and September 6, 2033.

Tungsten Partners LLC (“Tungsten”) acted as financial advisor to the Company in connection with the Merger. As partial compensation for services rendered by Tungsten, the Company issued to Tungsten or its affiliates or designees an aggregate of 18,475 shares of Common Stock and 595.808 shares of Series G Preferred Stock. The fair value of the advisory fees was approximately $4.0 million which are included in the approximately $5.5 million of transaction costs noted above.

The Merger was accounted for as a business combination under the acquisition method of accounting with First Wave as the accounting acquirer. Under the acquisition method, the total purchase price of the acquisition is allocated to the net identifiable tangible and intangible assets acquired and liabilities assumed based on the fair values as of the date of such acquisition. The preliminary fair value of the consideration totaled approximately$60.1 million, summarized as follows:

The Company has made a provisional allocation of the purchase price of the Merger to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the provisional purchase price allocations relating to the Merger:

The fair value of IPR&D was capitalized as of the IMGX Merger date and accounted for as definite-lived intangible assets until completion or disposition of the assets or abandonment of the associated research and development efforts. Upon successful completion of the development efforts, the useful lives of the IPR&D assets will be determined based on the anticipated period of regulatory exclusivity and will be amortized within operating expenses. Until that time, the IPR&D assets will be subject to impairment testing and will not be amortized. The goodwill recorded related to the IMGX Merger is the excess of the fair value of the consideration transferred by the acquirer over the fair value of the net identifiable assets acquired and liabilities assumed at the date of such acquisition. The goodwill recorded is not deductible for tax purposes.

All intangible assets acquired are not subject to amortization and their associated estimated acquisition date fair values are as follows:

Net loss in the Condensed Consolidated Statement of Operations for the twelve months ended December 31, 2024 includes net losses of IMGX from the date of acquisition to December 31, 2024 of approximately $2.4 million, which is classified as discontinued operations.

On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to a Rescission Agreement, as amended, pursuant to which the transaction was unwound. As a result, the Company no longer holds the assets and liabilities associated with the IMGX acquisition and the previously held for sale classification is no longer applicable.

Pro forma disclosure for the IMGX acquisition

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Acquisition had taken place on January 1, 2024. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date:

Acquisition of Grid AI Corp.

On September 30, 2025, the Company completed the acquisition of Grid AI Corp. (“Grid AI”), a Nevada corporation, pursuant to the terms of a Share Exchange Agreement (the “Grid AI Agreement”) dated September 30, 2025, by and among the Company and the shareholders of Grid AI (the “Sellers”). Under the terms of the Grid AI Agreement, each Seller transferred to Entero all of the issued and outstanding shares of Grid AI in exchange for equity interests of the Company as described below. The Share Exchange Agreement establishes the terms governing consideration allocation, post-closing ownership structure, milestone-based conversion features, and certain rescission mechanics that may impact the ultimate fully-diluted ownership of the Company.

The acquisition of Grid AI was undertaken to expand the Company’s capabilities in AI-driven energy optimization and distributed energy resource management, including battery storage and energy orchestration solutions. The transaction is expected to enhance the Company’s strategic positioning in the data center and energy infrastructure markets and provide access to Grid AI’s proprietary technology, customer relationships, and operational platform.

Additional Terms of the Share Exchange Agreement

In connection with the Share Exchange Agreement, the equity consideration issued to the Sellers includes adjustment provisions intended to ensure that the relative ownership levels of the parties remain consistent with the economic intent of the agreement, subject to the achievement of specified milestones and receipt of required shareholder approvals. The agreement also contains rescission and reallocation provisions under which certain elements of the consideration issued may be adjusted if those conditions are not met. These provisions do not affect the preliminary purchase accounting conclusions reached as of the acquisition date.

Consideration Transferred

At closing, the Company issued to the Sellers:

The combined fair value of the equity consideration issued to the Sellers was estimated at $27.1 million, consisting of $2.1 million attributable to the common stock issued and $25.0 million attributable to the Series H Preferred Stock. The Company recognized a non-controlling interest of approximately $5.3 million, representing the estimated fair value of the 25% ownership interest in Amp UK Holdings (“AMPX”), a subsidiary of Grid AI, not owned directly or indirectly by the Company.

No cash consideration was paid. Transaction costs related to the acquisition were not material and were expensed as incurred.

Purchase Price Allocation

The transaction was accounted for under the acquisition method of accounting in accordance with ASC 805 with GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.) identified as the accounting acquirer based on the evaluation of control, governance rights, and the legal form of the transaction. The preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values at the acquisition date, is as follows:

The purchase price allocation is preliminary and subject to adjustment during the measurement period, which extends up to one year from the acquisition date of September 30, 2025 (i.e., through September 30, 2026). During the measurement period, the Company may record adjustments to the provisional amounts recognized for assets acquired and liabilities assumed based on additional information obtained about facts and circumstances that existed as of the acquisition date.

Pro forma disclosure for the Grid AI Corp. Acquisition

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the acquisition of Grid AI Corp. had taken place on January 1, 2025. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date.

The excess of the fair value of the consideration transferred over the fair value of the identifiable net assets acquired was recorded as goodwill of approximately $22.4 million. The goodwill recognized is primarily attributable to expected synergies from integrating Grid AI’s operations with the Company’s existing platform, including anticipated growth in AI-driven energy optimization solutions, expansion into new markets, workforce expertise, and the assembled workforce, which do not qualify for separate recognition as intangible assets. None of the goodwill is expected to be deductible for tax purposes.

All intangible assets acquired are subject to amortization and their associated estimated acquisition date fair values are as follows:

Note 4 – Discontinued Operations, Assets Held for Sale

The Company previously completed a merger with IMGX and, during the year ended December 31, 2024, initiated a plan to dispose of certain IMGX assets and liabilities. As a result, such assets and liabilities were classified as held for sale and the results of IMGX were presented as discontinued operations in the consolidated financial statements for the year ended December 31, 2024.

On December 31, 2025, the Company completed the rescission of the IMGX transaction pursuant to a Rescission Agreement, as amended. As a result of the rescission, the previously contemplated disposal of IMGX did not occur, and the Company no longer holds the assets and liabilities of IMGX and no longer classifies such amounts as held for sale or as discontinued operations.

In connection with the rescission, the Company returned all equity consideration previously issued to the IMGX shareholders, including (i)36,830 shares of common stock and (ii)11,777.418 shares of Series G preferred stock, and cancelled all assumed options and warrants. The Company also transferred all ownership interests in ImmunogenX, LLC to the former shareholders.

As a result, the Company derecognized assets of approximately $83.2 million and liabilities of approximately $23.7 million, representing net assets of approximately $59.3 million. The rescission resulted in the reversal of previously recognized equity balances, including approximately $57.8 million of Series G preferred stock and related additional paid-in capital.

The rescission resulted in a loss of approximately $0.9 million, which was recorded within discontinued operations in the consolidated statement of operations.

Accordingly, upon completion of the rescission on December 31, 2025, the Company derecognized all assets and liabilities associated with IMGX and no longer consolidates IMGX in its financial statements.

The following table summarizes the Company’s loss from discontinued operations for the years ended December 31, 2025 and 2024.

No discontinued operations were presented for the year ended December 31, 2025 as a result of the completion of the rescission of the IMGX transaction.

The assets and liabilities associated with discontinued operations consist of the following as of December 31, 2024 and the amounts derecognized during the year ended December 31, 2025:

As of December 31, 2024, assets and liabilities classified as held for sale were presented as current assets and liabilities, respectively, based on the Company’s plan at that time to dispose of IMGX.

The Company recognized total depreciation and amortization of $34,381, amortization of debt discount of $5,847 and a reduction in right-of-use asset of $4,382 for the year ended December 31, 2024. Changes in accounts payable of $760,123, accrued liabilities of $381,163, lease liabilities of $3,611 and deferred tax liability of $112,400 were also recognized. These amounts are categorized as cash used in operating activities within the Consolidated Statements of Cash Flows.

Interest expense of approximately $1 million was recognized for the year ended December 31, 2025, primarily related to a note payable associated with liabilities classified as held for sale.

As a result of the rescission, the Company derecognized all assets and liabilities previously classified as held for sale, reversed the related equity consideration issued in connection with the IMGX acquisition, and recorded a gain of approximately $0.6 million within discontinued operations. Accordingly, such classification is no longer applicable for periods subsequent to December 31, 2025.

Note 5 - Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value of the Company’s financial instruments are as follows:

At December 31, 2025 and 2024, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

Note 6 – Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements consisted of the following:

Depreciation expense was $0 and $14,565 for each of the years ended December 31, 2025 and December 31, 2024, respectively.

Note 7 – Goodwill

Goodwill is as follows:

Note 8 – Intangible Assets

The following identifiable intangible assets were recognized as part of the Grid AI acquisition and are not classified as held for sale. These assets are amortized on a straight-line basis over their estimated useful lives:

Note 9 - Accrued Expenses

Accrued expenses consisted of the following:

Note 10 – Capital Stock

Our certificate of incorporation, as amended and restated (the “Charter”) authorized the issuance of up to 100,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

On December 18, 2023, the Company effected a reverse stock split, whereby every twenty shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

On August 18, 2025, the Company effected a reverse stock split, whereby every three shares of the Company’s issued and outstanding common stock was converted automatically into one issued and outstanding share of common stock, but without any change in the number of authorized shares of common stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Common Stock

The Company had 4,224,145 and 1,584,650 shares of its Common Stock issued and outstanding at December 31, 2025 and 2024, respectively.

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of the stockholders. The Company’s Charter and Amended and Restated Bylaws (the “Bylaws”) do not provide for cumulative voting rights.

In addition, the holders of the Company’s Common Stock will be entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds; however, the current policy of the Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of the Company’s Common Stock will be entitled to share ratably in all assets that are legally available for distribution.

Holders of the Company’s Common Stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Common Stock. The rights, preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of the Company’s preferred stock that it may designate and issue in the future.

Preferred Stock

The Board is authorized to divide the preferred stock into any number of series, fix the designation and number of each such series, and determine or change the designation, relative rights, preferences, and limitations of any series of preferred stock. The Board may increase or decrease the number of shares initially fixed for any series, but no decrease may reduce the number below the shares then outstanding and duly reserved for issuance.

On July 16, 2020, the Company designated approximately 5,194.81 shares as Series B Preferred Stock. As of December 31, 2025 and 2024,475.56 and 475.56 shares of Series B Preferred Stock were issued and outstanding, respectively. Each share of Series B Preferred Stock has a liquidation preference equal to its stated value of $7,700 per share, plus any accrued and unpaid dividends. Approximately 2,282.23 shares of Series B Preferred Stock remain authorized but undesignated and unissued. As of December 31, 2025 and 2024, the Company had accrued dividends payable related to the Series B Preferred Stock of approximately$1,647,822 and $1,310,581, respectively, which are included in accrued dividend payable on the consolidated balance sheets.

On January 5, 2021, the Company designated 75,000 shares as Series C Preferred Stock. Shares of Series C Preferred Stock converted into Common Stock (or Prefunded Warrants, as applicable) or redeemed shall be canceled and shall not be reissued. As of December 31, 2025 and 2024,0 shares of Series C Preferred Stock were issued and outstanding, with approximately 41,903 shares of Series C Preferred Stock remaining authorized but unissued.

On July 15, 2022, the Company designated 150 shares as Series D Preferred Stock and had 0 shares of Series D Preferred Stock issued and outstanding on December 31, 2025 and 2024.

On July 15, 2022, the Company designated 150 shares as Series E Preferred Stock and had 0 shares of Series E Preferred Stock issued and outstanding on December 31, 2025 and 2024.

On November 28, 2022, the Company designated 7,000 shares as Series F Preferred Stock and had 0 shares of Series F Preferred Stock issued and outstanding on December 31, 2025 and 2024.

On September 30, 2025, the Company designated 38,801.546 shares of Series H Non-Voting Convertible Preferred Stock. As of December 31, 2025 and December 31, 2024,38,801.546 and 0 shares of Series H Preferred Stock were issued and outstanding, respectively. Each share of Series H Preferred Stock has a liquidation preference of $618.53 per share, resulting in an aggregate liquidation preference of approximately $24.0 million as of December 31, 2025. The Series H Preferred Stock was issued to the shareholders of Grid AI Corp. as part of the consideration for the acquisition of Grid AI Corp. (See Note 3).

The Series H Preferred Stock is convertible into shares of the Company’s Common Stock, subject to stockholder approval, achievement of defined milestone events relating to the business of AMPX, and certain beneficial ownership limitations. Following stockholder approval, each share is convertible at a stated conversion ratio (initially 1:1,000, subject to adjustment) and is issuable in multiple tranches upon the achievement of defined milestone events relating to the business of AMPX. Conversion is further limited such that holders may not convert shares if, as a result, they would beneficially own more than a specified percentage of the Company’s outstanding Common Stock.

The Series H Preferred Stock does not have voting rights, except as required by law or as otherwise provided in the Certificate of Designation, and is not redeemable.

As of and through December 31, 2025, no shares of Series H Preferred Stock had been converted into Common Stock.

At December 31, 2025, the Company had approximately 9,999,485.04 shares of preferred stock remaining authorized but unissued.

Mezzanine Equity

Series G Preferred Stock

The Company had 595.81 and 12,373.226 shares of Series G Convertible Preferred Stock issued and outstanding as of December 31, 2025 and 2024, respectively.

On March 13, 2024, the Company issued 12,373.226 shares of Series G Convertible Preferred Stock in connection with the IMGX Merger.

On December 31, 2025, the Company completed a rescission of the IMGX transaction pursuant to the Rescission Agreement, as amended. In connection with the rescission,11,777.416 share of the Series G Convertible Preferred Stock issued in connection with the IMGX Merger was cancelled and returned to the Company.

As of December 31, 2025,595.81 shares of Series G Convertible Preferred Stock remain issued and outstanding, representing a stated value of approximately $3.9 million.

The following is a summary of the principal terms of the Series G Convertible Preferred Stock as set forth in the Certificate of Designation of the Series G Convertible Preferred Stock:

General; Transferability. Share of Series G Preferred Stock will be uncertificated and issued in book-entry form. Shares of Series G Preferred Stock may be transferred by the holders thereof without the consent of the Company, provided that such transfer is in compliance with applicable securities laws.

Conversion. Following stockholder approval of the conversion of the Series G Preferred Stock into Common Stock in accordance with the listing rules of the Nasdaq Stock Market (the “Conversion”), each share of Series G Preferred Stock will automatically convert into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series G Preferred Stock is prohibited from converting shares of Series G Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

The Series G Preferred Stock is redeemable for cash at the option of the holder thereof at any time following the date that is six months after the initial issuance of the Series G Preferred Stock (without regard to the lack of obtaining the requisite stockholder approval to convert the Series G Preferred Stock into Common Stock), at a price per share equal to the then-current fair value of the Series G Preferred Stock, which shall be the last reported closing sale price of the Company’s Common Stock as reported on the Nasdaq Stock Market as of the trading day immediately prior to the conversion event. As such, Series G Preferred Stock is classified as Mezzanine Equity on the balance sheet.

Voting Rights. Except as otherwise required by law, the Series G Preferred Stock does not have voting rights. However, as long as any shares of Series G Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series G Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the

Series G Preferred Stock or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or bylaws of the Company, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, in each case if any such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series G Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series G Preferred Stock, (iii) prior to the earlier of stockholder approval of the Conversion or the six-month anniversary of issuance, consummate either: (A) any Fundamental Transaction (as in the Certificate of Designation) or (B) any stock sale to, or any merger, consolidation or other business combination of the Company with or into, another entity in which the stockholders of the Company immediately before such transaction do not hold at least a majority of the capital stock of the Company immediately after such transaction, or (iv) enter into any agreement with respect to any of the foregoing.

Liquidation Preference. The Series G Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

Dividend Rights. Holders of Series G Preferred Stock are entitled to receive dividends on shares of Series G Preferred Stock equal to, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock.

Redemption. The shares of Series G Preferred Stock shall not be redeemable at the option of the Company or the holder thereof.

Trading Market. There is no established trading market for any of the Series G Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Series G Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Series G Preferred Stock will be limited.

Most Favored Nations Exchange Right and Waiver Agreements

In the event the Company effects any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash consideration, or a combination of units thereof (a “Subsequent Financing”), each holder of the Series B Preferred Stock used to have the right, subject to certain exceptions set forth in the Series B Certificate of Designations, at its option, to exchange (in lieu of cash subscription payments) all or some of the Series B Preferred Stock then held (with a value per share of Series B Preferred Stock equal to the stated value of each share of Series B Preferred Stock, or $7,700.00, plus accrued and unpaid dividends thereon, of the Series B Preferred Stock (the “Exchange Amount”)) for any securities or units issued in a Subsequent Financing on dollar-for-dollar basis (the “Series B Exchange Right”). Effective May 12, 2022, the holders of 81.3% of the outstanding shares of the Series B Preferred Stock permanently waived for themselves and all other holders of the Series B Preferred Stock the Series B Exchange Right with respect to any Subsequent Financing occurring on or after January 1, 2022 (the “Permanent Waiver”). Holders of Series B Preferred Stock as of the April 27, 2022 record date were entitled to notice of and to consent to the Permanent Waiver.

As of December 31, 2024, (i) holders of approximately 1,839.76 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $14.4 million had previously elected to exercise their Series B Exchange Rights into Series C Preferred Stock, convertible into an aggregate of 395 shares of Common Stock (which conversion the Company has elected to make in full), and additional Investor Warrants exercisable for up to an aggregate of 395 shares of Common Stock, (ii) holders of approximately 169.57 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $1.6 million had previously elected to exercise their Series B Exchange Rights into 136 shares of Common Stock with no warrants, and (iii) holders of approximately 30.91 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $265,000 had previously elected to exercise their Series B Exchange Rights into 44 shares of Common Stock, and additional Series C Warrants exercisable for up to an aggregate of 44 shares of Common Stock.

At The Market Agreement with H.C. Wainwright

On May 26, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of Common Stock. The Company has not made any sales of common stock under the ATM Agreement to date. As of May 24, 2022, the Company was authorized to offer and sell

up to $8.0 million of its Common Stock pursuant to the ATM Agreement. The Company did not utilize the ATM Agreement during the twelve months ended December 31, 2025 or the year ended December 31, 2024.

August 2025 Reverse Stock Split

On August 18, 2025, the Company effected a reverse stock split of its issued and outstanding common stock at a ratio of 1-for-3. As a result of the reverse stock split, every three shares of the Company’s issued and outstanding common stock were automatically converted into one share of common stock, without any change to the par value per share or the number of authorized shares. The reverse stock split proportionately adjusted the number of shares underlying the Company’s outstanding warrants and pre-funded warrants, and the corresponding exercise prices of such warrants were adjusted in accordance with their terms.

September 2025 Registered Direct Offering

On or about September 2025, the Company completed a Registered Direct Offering (the “September 2025 Offering”) priced at market under Nasdaq rules, for an aggregate of (i) shares of Common Stock, (ii) pre-funded warrants (the “September 2025 Pre-Funded Warrants”) to purchase shares of Common Stock and (iii) common warrants (the “September 2025 Warrants”) to purchase shares of Common Stock. The September 2025 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The September 2025 Warrants are exercisable immediately and will expire pursuant to their terms. The Company received gross proceeds of $3,025,000, less placement agent’s fees and other offering expenses.

Pre-Funded Warrant Exercises

During the year ended December 31, 2025, investors exercised pre-funded warrants to purchase shares of the Company’s Common Stock in connection with previous offerings. In connection with such exercises, the Company issued shares of Common Stock in excess of the number of pre-funded warrants exercised. The excess shares issued were recorded as a deemed dividend and recognized as a reduction to additional paid-in capital.

July 2024 Inducement Offering

On July 10, 2024, the Company entered into a warrant exercise inducement offer letter (the “Inducement Letter”) with a holder (the “Holder”) of warrants to purchase shares of the Company’s common stock (the “Existing Warrants”) pursuant to which the Holder agreed to exercise for cash their Existing Warrants to purchase 587,529 shares of the Company’s common stock (the “Existing Warrant Shares”), in the aggregate, at a reduced exercised price of $3.27 per share, in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) on substantially the same terms as the Existing Warrants as described below, to purchase up to 1,175,116 shares of the Company’s common stock (the “Inducement Warrant Shares”). The Inducement Warrants will be exercisable upon the receipt of stockholder approval and may be exercised until the fifth anniversary of the date on which such stockholder approval is obtained. The Company received aggregate gross proceeds of approximately $1.9 million from the exercise of the Existing Warrants by the Holder and the sale of the Inducement Warrants. The Company engaged Roth Capital Partners, LLC (“Roth”) to act as its financial advisor in connection with the transactions summarized above and paid Roth approximately $116,000 for its services and for reimbursement for certain expenses.

May 2024 Registered Direct Offering

On May 14, 2024, the Company completed a Registered Direct Offering (the “May 2024 Offering”) priced at market under Nasdaq rules, for an aggregate of (i)275,000 shares of Common Stock, (ii) pre-funded warrants (the “May 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 91,000 shares of Common Stock and (iii) common warrants (the “May 2024 Warrants”) to purchase up to an aggregate of 732,000 shares of Common Stock. The public offering price for each share of Common Stock and accompanying May 2024 Warrant to purchaseone share of Common Stock was $2.95 per share. The May 2024 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The May 2024 Warrants have an exercise price of $2.70 per share, are exercisable immediately and will expiresix years from the initial exercise date.

The Company received gross proceeds of approximately $1.1 million less placement agent’s fees and other offering expenses of approximately $182,000.

March 2024 Registered Direct Offering

On March 6, 2024, the Company completed a Registered Direct Offering (the “March 2024 Offering”) priced at market under Nasdaq rules, for an aggregate of (i)173,100 shares of Common Stock, (ii) pre-funded warrants (the “March 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 352,525 shares of Common Stock and (iii) common warrants (the “March 2024 Warrants”) to purchase up to an aggregate of 525,625 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2024 Warrant to purchaseone share of Common Stock was $7.61 per share. The March 2024 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The March 2024 Warrants have an exercise price of $7.48 per share, are exercisable immediately and will expire five years from the initial exercise date. The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $393,000.

Common Stock Issuances

2025 Issuances

During the year ended December 31, 2025, the Company issued 1,358,498 shares of Common Stock upon the exercise of warrants in connection with a registered direct offering for which the Company received gross proceeds of $3,025,000, less placement agent’s fees and other offering expenses.

During the year ended December 31, 2025, the Company issued an aggregate of 424,377 shares of Common Stock to the shareholders of Grid AI Corp. as consideration for the acquisition of Grid AI Corp., with a value of approximately $2.1 million.

During the year ended December 31, 2025, in connection with the rescission of the IMGX transaction, the Company canceled an aggregate of 12,277 shares of Common Stock previously issued in connection with the IMGX acquisition.

During the year ended December 31, 2025, the Company issued an aggregate of 710,000 shares of Common Stock upon the exercise of warrants.

During the year ended December 31, 2025, the Company issued an aggregate of 158,897 shares of Common Stock upon the vesting of RSUs (See Note 12).

2024 Issuances

During the year ended December 31, 2024, the Company issued 57,700 and 91,667 shares of Common Stock under the March 2024 Offering and May 2024 Offering, respectively, for which the Company received net proceeds of approximately $4.5 million.

During the year ended December 31, 2024, the Company issued 587,529 shares of Common Stock under the July 2024 Inducement Offering for which the Company received net proceeds of approximately $1.7 million.

During the year ended December 31, 2024, the Company issued an aggregate of 12,277 shares of Common Stock with a value of $2.3 million in connection with the IMGX acquisition.

During the year ended December 31, 2024, the Company issued an aggregate of 6,158 shares of Common Stock with a value of approximately $121,000 to its financial advisors in connection with the IMGX acquisition.

During the year ended December 31, 2024, the Company issued an aggregate of 147,842 shares of Common Stock upon the exercise of pre-funded warrants issued at a par value of $0.0001.

During the year ended December 31, 2024, the Company issued an aggregate of 12 shares of Common Stock upon the exchange of an aggregate of 13 shares of Series B Preferred Stock with a stated value of approximately $303,337 plus accrued dividends of approximately $94,540.

During the year ended December 31, 2024, the Company issued an aggregate of 116,667 shares of its Common Stock to consultants with a grant date fair value of approximately $1,541,995 for investor relations services provided, which was recorded as stock-based compensation and included as part of general and administrative expense.

During the year ended December 31, 2024, the Company issued an aggregate of 44,467 shares of Common Stock upon the vesting of RSUs (See Note 12).

Note 11 – Warrants

Warrant activity for the years ending December 31, 2025 and 2024 were as follows:

The weighted average fair value of warrants granted during the years ended December 31, 2025 and 2024, was $4.34 and $4.71 per share, respectively. The grant date fair values were calculated using the Black-Scholes model with the following weighted average assumptions:

The outstanding warrants expire from 2025 through 2030.

During the year ended December 31, 2025, the Company issued warrants to purchase an aggregate of 5,659,110 shares of the Company’s Common Stock in connection with its financing activities (See Note 10). Additionally, the Company cancelled warrants to purchase 42,560 shares of the Company’s Common Stock in connection with the IMGX rescission. The Company also had warrant exercises during the year, resulting in the issuance of 2,068,665 shares of common stock upon exercise of warrants.

During the year ended December 31, 2024, the Company issued warrants to purchase 58,403 shares of the Company’s Common Stock and pre-funded warrants to purchase 39,169 shares of the Company’s Common Stock in connection with the March 2024 Offering, warrants to purchase 81,333 shares of the Company’s Common Stock and pre-funded warrants to purchase 10,111 shares of the Company’s Common Stock in connection with the May 2024 Offering, and warrants to purchase 1,175,166 shares of the Company’s Common Stock in connection with the July Inducement Offering (See Note 10). Additionally, the Company assumed warrants to purchase 42,560 shares of the Company’s Common Stock in connection with the IMGX acquisition.

During the year ended December 31, 2024, an investor exercised pre-funded warrants to purchase 147,842 shares of the Company’s Common Stock and common stock warrants to purchase 587,529 shares of the Company’s Common Stock in connection with previous offerings.

Note 12 – Equity Incentive Plan

The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which took effect on September 11, 2020. From the adoption and approval of the 2020 Plan, no new awards have been or will be made under the 2014 Plan.

The 2020 Plan allows for the issuance of securities, including stock options to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2020 Plan was 79 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise, automatically increase to equal ten percent (10%) of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan or the 2020 Plan. The number of shares permitted to be issued as “incentive stock options” (“ISOs”) is 357 under the 2020 Plan.

As of January 1, 2026, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 941,100 under the 2020 Plan’s evergreen provision.

The following table summarizes the Company’s stock option activity:

There wereno grant of options during the year ended December 31, 2025.

The total fair value of the stock options vested, subject to service-based milestone vesting conditions, during the year ended December 31, 2025 and 2024 was approximately$0 and $7,000.

The total fair value of the stock options vested, subject to performance-based milestone vesting conditions, during the year ended December 31, 2025 and 2024 was approximately $0 and $0.

Restricted Stock and Restricted Stock Units

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock unit awards (“RSUs”) refer to an award under the 2014 Plan, which constitutes a promise to grant shares of Common Stock at the end of a specified restriction period.

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock unit awards (“RSUs”) refer to awards under the Company’s 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which represent a right to receive shares of Common Stock upon satisfaction of applicable vesting conditions.

As of December 31, 2025 and December 31, 2024, the Company hadno unrecognized stock-based compensation expense related to unvested RSUs.

RSU activity under the 2020 Plan for the year ended December 31, 2025 was as follows:

During the year ended December 31, 2025, the Board approved the grant of 317,230 RSUs pursuant to the 2020 Plan, which vested immediately upon issuance. Accordingly,158,897 RSUs vested and were issued during the year ended December 31, 2025.

During the year ended December 31, 2024, the Board approved the grant of 50,140 RSUs pursuant to the 2020 Plan, which vest quarterly over aone - year period. During the year ended December 31, 2024,48,364 RSUs vested of which 3,897 were issued in January 2025.

Stock - based Compensation Expense

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:

As of December 31, 2025, the Company hadno material unrecognized stock - based compensation expense related to its outstanding stock options and restricted stock units, as substantially all awards were fully vested as of year-end.

As of December 31, 2024, the Company had unrecognized stock - based compensation expense of approximately $21,000. Approximately $7,000 of this unrecognized expense will be recognized over the average remaining vesting term of the stock options of 0.16 years.

Note 13 – Agreements

License Agreement with Sanofi

On September 13, 2023, the Company entered into a License Agreement with Sanofi, pursuant to which the Company received a license to obtain certain exclusive worldwide rights to develop and commercialize Capeserod, a selective 5-HT4 receptor partial agonist which the Company intended to repurpose and develop for gastrointestinal indications.

The Company paid Sanofi an upfront payment of $500,000 in October 2023 and Sanofi was eligible to receive up to $46.0 million in potential development and regulatory milestone payments and up to $235.0 million in potential commercial milestone payments. Sanofi was also eligible to receive mid-to-high single-digit royalties on net sales, as well as a percentage of sublicense and transfer revenues with respect to Capeserod. Sanofi also had a right of first refusal with respect to Capeserod out-licensing transactions.

The upfront payment of $500,000 was recorded as research and development expense in the year ended December 31, 2023. Depending on the status of development at the time a contingent payment is recognized, the Company may determine that the payment should be expensed as research and development or be capitalized as an intangible asset. This determination will be based on the facts and circumstances that exist at the time a contingent payment is recognized.

The License Agreement was to expire on a country-by-country basis upon the later of: (i) the expiration of the last to expire valid claim of an applicable patent in such country covering such licensed product, (ii) the expiration of the regulatory exclusivity for such licensed product in the applicable country and (iii) the tenth anniversary of the date of first commercial sale of a licensed product in such country. Each party may terminate the License Agreement if the other party materially breaches its obligations under the License Agreement and fails to cure such material breach within 60 days from the date of such notice of breach, except in the case of payment breach, as to which the breaching party will have only aten-day cure period. Sanofi may terminate the License Agreement upon any bankruptcy proceedings by the Company. The Company may terminate the License Agreement by providing Sanofi with at least 60 days prior written notice; provided, however, that Sanofi shall be entitled to any and all payments due and owed to Sanofi prior to the effective date of termination. On February 26, 2025, the Company provided notice to Sanofi to terminate the License Agreement. No payments are due to Sanofi and the Company terminated its agreement effective in February 2025.

Note 14 – Leases

On June 30, 2025, the Company terminated its lease for office space consisting of 3,472 square feet in Boca Raton, Florida, which was used as its corporate headquarters. The lease was originally scheduled to expire on August 31, 2026.

As of December 31, 2025, the weighted-average remaining lease term and weighted-average discount rate under operating leases were as follows:

Future minimum lease payments under non-cancelable operating leases as of December 31, 2025 were as follows:

In connection with the lease default, the Company fully impaired the related right-of-use (“ROU”) asset.

The Company continues to recognize the related lease liability of $135,609 as of December 31, 2025.

Additionally, the Company recorded an accrual of $236,511 related to remaining obligations, settlement costs and associated penalties.

The default was accounted for in accordance with ASC 842 and resulted in the following impact on the Company’s financial statements:

Note 15 – Debt

The below balances are presented on the consolidated balance sheets as deferred consideration of $6,250,000 and notes payable of $2,027,184 as of December 31, 2025. Debt consists of the following:

Deferred Consideration

In connection with the acquisition of Grid AI Corp., the Company recognized deferred consideration payable of $7,000,000 as part of the purchase consideration. During the year ended December 31, 2025, the Company made cash payments of $750,000 toward this obligation. As of December 31, 2025, the outstanding balance was $6,250,000. The deferred consideration is non-interest bearing and is expected to be settled in cash or through other arrangements in accordance with the terms of the acquisition agreement. The consideration payable is non-interest bearing and is expected to be settled through future cash payments or other negotiated arrangements in accordance with the terms of the acquisition agreement.

Note Payable

As of December 31, 2025, all outstanding debt is classified as current.

Revolving Line of Credit

Effective January 31, 2025, the Company entered into a Revolving Loan Agreement dated January 27, 2025 (the “Revolving Loan Agreement”), pursuant to which the lender agreed to make available borrowings up to $2,000,000. As of December 31, 2025, the Company had drawn $700,000 under the facility, with approximately $1.3 million remaining available, subject to customary drawdown conditions.

Borrowings under the Revolving Loan Agreement are evidenced by a revolving note (the “Revolving Note”) which bears interest at a rate of 18% per annum, calculated on a 360-day year. The proceeds from the facility are being used for general corporate purposes.

The Revolving Loan Agreement has a contractual maturity date of January 29, 2026.

The Revolving Loan Agreement contains customary affirmative and negative covenants, including restrictions on the incurrence of additional indebtedness, affiliate transactions, and certain corporate actions without lender consent.

On April 1, 2026, the Company received a notice of default from the lender under the Revolving Loan Agreement due to the failure to repay the outstanding balance by the maturity date. The lender has demanded repayment of the outstanding principal of $700,000 together with accrued interest and other amounts due under the agreement. Management is actively engaged in discussions with the lender to resolve the matter.

Promissory Note with Warrants

During the period from October 17, 2025 through December 26, 2025, the Company entered into financing arrangements that included promissory notes issued together with warrants to purchase shares of the Company’s common stock. The aggregate principal amount of the notes issued during the period was $2,300,000, and the Company received gross proceeds of $2,300,000. The warrants issued in connection with these arrangements were determined to have an aggregate fair value of approximately $(1,040,851) at issuance, which was recorded as a debt discount. The notes do not bear stated interest and are accreted to their face value over the term of the instruments using the effective interest method of 12.81%. During the year ended December 31, 2025, the Company recognized approximately $366,255 of interest expense related to the amortization of the debt discount using the effective interest method. After repayments and amortization of the debt discount, the carrying value of these notes was $1,017,184 as of December 31, 2025. The promissory notes are unsecured and mature one year and one day from their respective issuance dates.

Promissory Notes Payable

The Company had two unsecured promissory notes outstanding with an aggregate principal balance of approximately $310,000 as of December 31, 2025. These notes were assumed as part of the Grid AI acquisition. Each note bears interest at a rate of 2.0% per annum and is payable in a lump sum at maturity. The notes mature on the earlier of (i) January 1, 2026 or (ii)two business days following the Company’s receipt of $1.5 million or more in financing from one or more sources other than the holders. The notes are unsecured and may be prepaid by the Company at any time without penalty. The agreements contain customary events of default, including non-payment, covenant breaches and bankruptcy-related events, which would result in acceleration of amounts due. As a subsequent event, the Company is evaluating repayment or refinancing of these obligations following the January 1, 2026 maturity date.

Note 16 - Related Party Transactions

The Company has related party transactions with AMP Solar Group Ltd. (“AMP Solar Group”), which holds a 25% non-controlling interest in AMP UK Holdings, a subsidiary of the Company.

AMP Solar Group is part of the broader Amp Energy group of companies. Amp Z is an affiliated platform within the Amp Energy ecosystem and operates under common ownership and/or control with AMP Solar Group. As a result of this relationship, transactions between Grid AI Corp. and Amp Z are considered related party transactions.

In connection with the acquisition of Grid AI Corp. on September 30, 2025, the Company assumed deferred consideration liabilities totaling $7.0 million. During the period from the acquisition date through December 31, 2025, the Company made payments and/or recognized adjustments totaling $0.75 million related to this deferred consideration. As of December 31, 2025, the outstanding balance of such deferred consideration was $6.25 million.

The Company also has amounts payable to related parties, including North York and Strategic EP LLC, related to services provided under arrangements predating the Grid AI acquisition. These obligations are non-interest bearing and are included within notes payable on the consolidated balance sheets.

The Company has entered into consulting and service arrangements with certain members of management, including the Chief Executive Officer and Chief Financial Officer, either directly or through affiliated entities. For the year ended December 31, 2025, the Company incurred expenses related to these arrangements, which were recorded within general and administrative expenses in the consolidated statements of operations. As of December 31, 2025, amounts due to related parties associated with these arrangements were not material.

Consulting Agreement and Equity Compensation

On December 19, 2025, the Compensation Committee of the Board of Directors approved an Amended and Restated Consulting Agreement between the Company and Access Alternative Group S.A. (the “Consultant”), an entity affiliated with the Company’s Chief Executive Officer, pursuant to which the Consultant provides services to the Company, including services in connection with the duties of the Chief Executive Officer. Under the terms of the Consulting Agreement, the Company agreed to pay the Consultant base compensation of $25,000 per month, retroactive to October 1, 2025, and a quarterly fee of $20,000, payable for each quarter in which the Company remains in compliance with Nasdaq listing requirements. The Consultant is also eligible to receive certain additional compensation, including a one-time cash payment and equity-based compensation upon the achievement of specified milestones. In addition, the Compensation Committee approved the grant of 1,000,000 restricted stock units (“RSUs”) under the Company’s 2020

Omnibus Equity Incentive Plan. The RSUs vest in equal quarterly installments during 2026, subject to the achievement of certain performance objectives, with accelerated vesting upon certain events, including a change in control or termination without cause.

Note 17- Commitments and Contingencies

Legal Matters

The Company is currently engaged in discussions with Ellenoff Grossman & Schole LLP (“EGS”) regarding certain outstanding legal fees. As of the date of issuance of these financial statements, the parties are actively negotiating a potential resolution. EGS has proposed a settlement in the range of approximately $400,000. The Company disputes the amount proposed and does not believe it reflects an appropriate resolution of the matter. The Company expects that any ultimate settlement, if reached, would be for a significantly lower amount. As of December 31, 2025, the Company has not recorded a liability related to this matter, as management has determined that a loss is not probable. The Company will continue to evaluate this matter as additional information becomes available.

Government Grant

During 2025, AMPX, a subsidiary of the Company, applied for government grants related to research and development expenditure tax credits in the United Kingdom. For the year ended December 31, 2025, the Company recognized approximately $1.3 million of government grant income related to these programs, which is included inother income. A corresponding receivable has been recorded within other receivables on the consolidated balance sheet as of December 31, 2025. This amount was received subsequently in April 2026.

Note 18 - Income Taxes

The Company is subject to taxation at the federal and state levels in the United States. At December 31, 2025 and 2024, the Company had no tax provision.

At December 31, 2025 and 2024, the Company had gross deferred tax assets of approximately $39.1 million and $39.6 million, respectively. A full valuation allowance of approximately $38.2 million and $37.6 million was recorded as of December 31, 2025 and 2024, respectively, as the Company has determined that it is more likely than not that the deferred tax assets will not be realized. The change in the valuation allowance was approximately $0.6 million and $4.2 million for the years ended December 31, 2025 and 2024, respectively. The significant components of the Company’s net deferred tax assets and liabilities consisted of:

Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:

At December 31, 2025 and 2024, the Company had gross deferred tax assets of approximately $33.7 million and $23.7 million, respectively. As the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax asset, a valuation allowance of approximately $38.2 million and $37.6 million has been established at December 31, 2025 and 2024, respectively. The change in the valuation allowance was approximately $.6 million and $4.2 million in 2025 and 2024, respectively.

At December 31, 2025, the Company had approximately $119.990 million of gross federal NOLs which will begin to expire in fiscal year 2033 if unused. The Company’s ability to use its NOL carryforwards may be limited if it experiences an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended. An ownership change generally occurs if certain stockholders increase their aggregate percentage ownership of a corporation’s stock by more than 50 percentage points over their lowest percentage ownership at any time during the testing period, which is generally the three-year period preceding any potential ownership change. The Company has not completed a study to determine whether transactions that have occurred over the past three years may have triggered an ownership change limitation. To the extent a limitation occurred, it would not have a material impact on the Company’s financial statements as the related deferred tax assets are fully offset by a valuation allowance as of the current period. The Company had takenno uncertain tax positions that would require disclosure under ASC 740, Accounting for Income Taxes, at December 31, 2025 and 2024, respectively. The Company’s main state tax jurisdictions are Florida and Massachusetts.

Note 19 - Net Loss per Common Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the periods presented, all potentially dilutive securities have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

All shares of Common Stock that may potentially be issued in the future are as follows:

**Note 20 –Employee Benefit Plans **

401(k) Plan

Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan, which complies with Section 401(k) of the Internal Revenue Code and covers substantially all employees of the Company.

All employees are eligible to participate in the plan. Employees may contribute from 1% to 100% of their compensation, and the Company may match contributions equal to 100% of the first 6% of employee contributions and may also make discretionary profit-sharing contributions.

The Company didnot have any employees during the year ended December 31, 2025 and, accordingly, no employer contributions were made under the plan for that period. Employer contributions under the 401(k) plan amounted to approximately $5,402 and $95,000 for the years ended December 31, 2025 and 2024, respectively.

Note 21 - Segments

The Company applies the provisions of ASC 280,Segment Reporting, which requires segment information to be reported based on the “management approach,” reflecting the manner in which the Company’s Chief Operating Decision Maker (“CODM”) allocates resources and assesses performance.

In 2025, in connection with the acquisition of Grid AI Corp. on September 30, 2025, the Company reassessed its operating and reportable segments. Based on this assessment, the Company determined that it operates throughtwo operating and reportable segments:

The measure of segment profit or loss is loss from operations, as reported in the consolidated statements of operations. This measure is used by the CODM to assess performance and make resource allocation decisions. Segment assets are measured as total assets, as reported in the consolidated balance sheets. The Company’s segments differ with respect to the nature of products and services, regulatory environments, and customer bases. As such, management has concluded that aggregation of these segments is not appropriate under ASC 280.

The following represents selected information for the Company’s reportable segments:

Operations by reportable segment for the year ending December 31, 2025 are as follows:

Operations by reportable segment for the year ending December 31, 2024 are as follows:

Note 22 - Subsequent Events

Revolving Loan Agreement

On January 27, 2025, the Company entered into a Revolving Loan Agreement (the “Revolving Loan Agreement”) pursuant to which the lender agreed to provide up to $2.0 million in financing. In connection with the Revolving Loan Agreement, the Company issued a revolving note bearing interest at 18% per annum, accruing daily. Under the terms of the Revolving Loan Agreement, all outstanding principal, accrued interest and other amounts were due on January 31, 2026 (the “Maturity Date”).

As of the Maturity Date, the Company did not repay the amounts due under the Revolving Loan Agreement and, accordingly, is in default under the agreement. On April 1, 2026, the Company received a demand letter from the lender’s counsel asserting that the Company is in default and demanding repayment of approximately $1.0 million, which includes outstanding principal, accrued interest and contractual default amounts.

The Revolving Loan Agreement provides that upon an event of default, the lender may accelerate the indebtedness and require repayment of up to 120% of the outstanding amounts due, including accrued interest and other costs. Management is actively negotiating with the lender regarding the default and is evaluating potential resolutions; however, there can be no assurance that these efforts will be successful.

Equity Awards

On January 1, 2026, the Company issued an aggregate of 160,000 shares of common stock upon the vesting of RSU’s to certain members of its board of directors under the Company’s 2020 Omnibus Equity Incentive Plan.

During the period from January 1, 2026 through April 24, 2026, the Company issued an aggregate of approximately 1,429,068 shares of its common stock in a series of transactions to a limited number of investors, including existing investors and related parties.

On April 24, 2026, the Company issued 91,743 shares of its common stock upon the exercise of outstanding warrants for cash consideration. The Company issued 250,000 shares of common stock to the Chief Executive Officer in accordance with the consultant agreement.

Promissory Note-**$255,000

On February 5, 2026, the Company issued a promissory note (the “$225,000 Note”) to Michael J. DesLauriers (the “Holder”) in the principal amount of $225,000. The $225,000 Note maturesone year and one day from the issuance date and does not bear interest. The Company may extend the maturity date at its option in increments ofone year and one day, subject to the terms of the note. The $225,000 Note provides that upon an event of default, including failure to repay amounts due or the occurrence of certain bankruptcy-related events, the outstanding principal amount may be declared immediately due and payable at the option of the Holder. In connection with the issuance the Company issued a warrant to the Holder to purchase up to 68,400 shares of the Company’s common stock at an exercise price of $2.50 per share, subject to adjustment, with a term offive years from the initial exercise date.

Promissory Note-**$225,000

On February 20, 2026, the Company issued a promissory note (the “$225,000 Note – Rogers”) to Dave Rogers (the “Holder”) in the principal amount of $225,000. The $225,000 Note – Rogers maturesone year and one day from the issuance date and does not bear interest. The Company may extend the maturity date at its option in increments ofone year and one day, subject to the terms of the note. The $225,000 Note – Rogers provides that upon an event of default, including failure to repay amounts due or the occurrence of certain bankruptcy-related events, the outstanding principal amount may be declared immediately due and payable at the option of the Holder. In connection with the issuance the Company issued a warrant to the Holder to purchase up to 68,400 shares of the Company’s common stock at an exercise price of $2.50 per share, subject to adjustment, with a term offive years from the initial exercise date.

Promissory Note -**$169,000

On March 6, 2026, the Company issued a promissory note (the “$169,000 Note”) to Michael J. DesLauriers (the “Holder”) in the principal amount of $169,000. The $169,000 Note maturesone year and one day from the issuance date and does not bear interest. The Company may extend the maturity date at its option in increments ofone year and one day, subject to the terms of the note. The $169,000 Note provides that upon an event of default, including failure to repay amounts due or the occurrence of certain bankruptcy-related events, the outstanding principal amount may be declared immediately due and payable at the option of the Holder. In connection with the issuance the Company issued a warrant to the Holder to purchase up to 51,376 shares of the Company’s common stock at an exercise price of $2.50 per share, subject to adjustment, with a term offive years from the initial exercise date.

Promissory Note-**$230,000

On March 30, 2026, the Company issued a promissory note (the “$230,000 Note”) to Michael J. DesLauriers (the “Holder”) in the principal amount of $230,000. The $230,000 Note maturesone year and one day from the issuance date and does not bear interest. The Company may extend the maturity date at its option in increments ofone year and one day, subject to the terms of the note. The $230,000 Note provides that upon an event of default, including failure to repay amounts due or the occurrence of certain bankruptcy-related events, the outstanding principal amount may be declared immediately due and payable at the option of the Holder. In connection with the issuance the Company issued a warrant to the Holder to purchase up to 69,920 shares of the Company’s common stock at an exercise price of $2.50 per share, subject to adjustment, with a term offive years from the initial exercise date.

Warrant Exercises

On February 23, 2026, the Company approved the exercise of common stock purchase warrants held by Strategic EP LLC and North York Ltd. In lieu of cash payment of the exercise price, the Company authorized the cancellation of outstanding promissory notes totaling approximately $310,000, with such amounts applied toward the exercise price of the warrants.

Settlement Agreement

On March 17, 2026, the Company approved the issuance of shares of common stock with an aggregate value of approximately $177,300 to settle outstanding obligations with Dark Arts Consulting. The number of shares to be issued will be determined based on the closing price of the Company’s common stock on the date the Company files its Annual Report on Form 10-K.

Marketing Agreement

On March 17, 2026, the Company approved the issuance of 45,000 shares of common stock in connection with a marketing services agreement with Outside The Box Capital Inc.

Board Actions

On February 23, 2026, the Board of Directors approved certain corporate actions, including the exercise of common stock purchase warrants, which resulted in the issuance of approximately 142,202 shares of common stock, and the settlement of related obligations. In connection with such actions, the Board also approved a correction to a previously issued promissory note, increasing the principal amount of the Strategic note from $125,000 to $155,000 to reflect the amount funded.