Fabric.AI, Inc.

FABRIC.AI, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

Organization

Fabric.AI, Inc. (“Fabric.AI” or the “Company”) is a Delaware corporation headquartered in New York, New York. The Company operates through its wholly-owned subsidiary, AYRO Operating Company, Inc. (“AYRO Operating”).

On April 27, 2026, the Company amended its Amended and Restated Certificate of Incorporation to change its name from “StableX Technologies, Inc.” to “Fabric.AI, Inc.” effective April 28, 2026. The Company’s ticker for its common stock, par value $0.0001 per share (“common stock”), symbol changed from “SBLX” to “FABC” and began trading under the new symbol on The Nasdaq Capital Market on April 29, 2026.

Nature of Operations

During the quarter ended June 30, 2026, the Company initiated a strategic transformation focused on the design and development of fabless semiconductor technologies for artificial intelligence (“AI”) data center infrastructure, including MicroLED-based optical interconnects and other system-critical semiconductor solutions intended to enable faster, more efficient and scalable AI workloads.

On April 27, 2026, the Company entered into a Joint Development and License Agreement (“JDA”) and related commercial agreements with Kopin Corporation (“Kopin”) to jointly develop and commercialize MicroLED-based optical interconnect technologies and related semiconductor products. For additional information, see Note 16. Commitments and Contingencies.

Our initial product under development is the Neural I/o™ chip, a micro light-emitting diode (“MicroLED”) based optical interconnect being developed in collaboration with Kopin Corporation, a Delaware corporation (“Kopin”) (Nasdaq: KOPN), pursuant to a Joint Development and License Agreement dated April 27, 2026 (the “JDA”), by and between the Company and Kopin. The Neural I/o chip is intended to replace traditional electrical interconnects with optical links to enable high-bandwidth, low-latency communication between compute nodes, with an initial focus on GPU-to-GPU connectivity for AI data center applications.

The collaboration with Kopin combines the Company’s system-level design capabilities with Kopin’s expertise in MicroLED materials science, process development and fabrication. The Neural I/o TM chip leverages Kopin’s proprietary MicroLED technology and patented bi-directional NeuralDisplay architecture, which repurposes programmable MicroLED pixels as optical transceivers intended to transmit data with lower power consumption relative to existing copper-based and laser-based interconnect solutions. The parties have agreed to jointly develop prototype and demonstration versions of the technology in accordance with development plan established under the JDA. Intellectual property developed through the collaboration will be jointly owned by the Company and Kopin, while Kopin retains ownership of its pre-existing technology and has granted the Company commercialization rights for commercial market applications.

The Company’s semiconductor initiatives are in the early stages of development. The extent to which the Company advances its semiconductor technologies and related activities will depend on factors including available capital, market conditions, regulatory developments, technical progress, manufacturing feasibility and customer adoption within the AI infrastructure industry. As of the date of this filing, the Company had approximately $7.5 million in cash and cash equivalents and $20.4 million in marketable securities available to support its strategic transition and ongoing development activities.

During 2025, the Company had initiated a digital asset treasury strategy associated with the stablecoin ecosystem. During the quarter ended June 30, 2026, the Company disposed of all its digital asset holdings and does not intend to develop this strategy further (see Note 7. Digital Assets).

During the year ended December 31, 2025, the Company paused active development and commercialization activities related to its electric vehicle business while it evaluates strategic alternatives for that business line. During the quarter ended June 30, 2026, the Company sold its assets associated with electric vehicle operations (see Note 15. Sale of Legacy Electric Vehicle Assets).

NOTE 2. LIQUIDITY AND GOING CONCERN

The unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”), which contemplates continuation of the Company as a going concern. The Company is subject to a number of risks similar to those of earlier stage commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the potential need to obtain additional capital, competition from larger companies, other technology companies, and other technologies. The Company has a limited operating history and the sales and income potential of its business and market are unproven.

During the quarter ended June 30, 2026, the Company completed equity financing transactions that generated approximately $21.5 million in gross proceeds (see Note 8. Stockholders’ Equity for additional information regarding these financing transactions). As of the date of this filing, the Company had approximately $7.5 million in cash and cash equivalents and $20.4 million in marketable securities. Based on the Company’s current cash position and management’s operating plan, management believes the Company has sufficient liquidity to fund operations for at least the next twelve months from the issuance date of these unaudited condensed consolidated financial statements.

Management evaluated whether conditions and events raised substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date these unaudited condensed consolidated financial statements are issued. Although the Company’s recurring operating losses and negative operating cash flows initially raised substantial doubt about its ability to continue as a going concern, management concluded that such substantial doubt has been alleviated as a result of the capital raised during the quarter ended June 30, 2026, and the Company’s current operating plan. Accordingly, management believes the Company has sufficient liquidity to fund its operations for at least the next twelve months from the issuance date of these unaudited condensed consolidated financial statements. However, the Company may require additional capital in the future to support the continued development and commercialization of its business, including its semiconductor development initiatives, and there can be no assurance that such financing will be available on acceptable terms, if at all.

The Company incurred a net loss of $14,896,507 and cash used in operating activities of $7,219,867 for the six months ended June 30, 2026. In addition, overall working capital increased by $23,048,350 during the six months ended June 30, 2026, primarily as a result of the financing transactions completed during the quarter.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are described in Note 3 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The following policies are new to the Company during the six months ended June 30, 2026, or have been updated to reflect changes in the current period.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 30, 2026.

Use of Estimates

The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. The Company evaluates estimates and assumptions on an ongoing basis.

Intangible Assets

Intangible assets acquired individually or as part of a group of assets are recorded at cost, which for noncash consideration is measured at the fair value of the consideration transferred on the acquisition date. The Company’s intangible assets consist of an acquired license right that has been determined to have an indefinite useful life. Indefinite-lived intangible assets are not amortized.

The Company evaluates its indefinite-lived intangible assets each reporting period to determine whether events and circumstances continue to support an indefinite useful life. Indefinite-lived intangible assets are tested for impairment at least annually, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Recently Issued Accounting Pronouncements Not Yet Adopted

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,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its financial statements.

NOTE 4. BASIC AND DILUTED NET LOSS PER SHARE

Due to the Company incurring a net loss for the three and six months ended June 30, 2026 and 2025, the following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as their inclusion would have been anti-dilutive:

NOTE 5. INVESTMENTS IN MARKETABLE SECURITIES

The Company’s investments consist of (i) U.S. Treasury bills and (ii) investments in a U.S. government money market fund. These investments are measured at fair value with changes in fair value recognized in earnings within Other income (expense), net in the unaudited condensed consolidated statements of operations.

The Company classifies investments with original maturities of three months or less at the date of purchase as cash and cash equivalents and those with original maturities greater than three months as marketable securities.

Trading debt securities: the Company’s U.S. Treasury bills are classified as trading debt securities. Realized and unrealized gains and losses are recognized in earnings.

Money market fund: the Company also invests in a prime institutional money market fund, which is a pooled investment vehicle that invests in a diversified portfolio of short-term, high-quality debt instruments, including U.S. government securities, commercial paper, certificates of deposit, and repurchase agreements. The investment is recorded at fair value and changes in fair value are recognized in earnings.

The following table summarizes the Company’s trading securities by major investment type as of June 30, 2026 and December 31, 2025:

The Company recognized an unrealized gain of $62,805 and $53,959 for the three and six months ended June 30, 2026, and an unrealized loss of $7,457 and $79,164 for the three and six months ended June 30, 2025. The Company recognized realized gains of $26,123 and $94,492 for the three months ended June 30, 2026 and 2025, respectively, and $64,100 and $305,554 for the six months ended June 30, 2026 and 2025, respectively.

NOTE 6. INTANGIBLE ASSETS

During the quarter ended June 30, 2026, in connection with the Kopin Joint Development Agreement, see Note 16. Commitments and Contingencies, the Company recognized an intangible asset of $17,238,716 representing the fair value of its right to acquire the license to use Kopin’s technology in the Company’s fabless semi-conductor manufacturing operations (the “License”). The fair value of the License was determined based on the fair value of the consideration transferred to Kopin, comprising the $730,533 initial fair value of the Series J Convertible Preferred Stock issued to Kopin (see Note 8. Stockholders’ Equity) and the $16,379,662 initial fair value of the associated anti-dilution liability (see Note 11. Fair Value Measurements), together with $128,521 of direct transaction costs incurred in connection with the transaction.

The License provides the core technology used in the Company’s fabless semiconductor manufacturing operations, and the Company expects its future revenue to be generated from the sale of semiconductors manufactured using that technology. In determining the useful life of the License, management analyzed all pertinent factors, including the terms of the underlying agreements and management’s intent and ability to continue the arrangement. As of June 30, 2026, management expects to extend the arrangement beyond its initial term and considers the probability of non-renewal or termination to be remote. Because the License is expected to contribute to the Company’s cash flows without a foreseeable limit, management concluded that the License has an indefinite useful life. Accordingly, the License is not amortized.

The Company reassess each reporting period whether events and circumstances continue to support indefinite useful life. The License is tested for impairment at least annually, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. An impairment loss is recognized to the extent the carrying amount of the License exceeds its fair value. No impairment was recognized during the three and six months ended June 30, 2026.

Intangible assets subject to amortization consisted of the following at June 30, 2026:

NOTE 7. DIGITAL ASSETS

The following table presents a reconciliation of the Company’s digital asset activity for the six months ended June 30, 2026:

During the three and six months ended June 30, 2026, the Company recognized a gain on change in fair value of digital assets of $75,054 and a loss on change in fair value of digital assets of $538,609, respectively.

During the quarter ended June 30, 2026, the Company disposed of all of its digital assets.

NOTE 8. STOCKHOLDERS’ EQUITY

Preferred Stock

Series H Convertible Preferred Stock

On June 30, 2015, the Company filed the Certificate of Designations, Preferences and Rights of the Series H Preferred Stock (the “Series H Certificate of Designation”) with the Secretary of State of Delaware, establishing and designating the rights, powers and preferences of the Series H Preferred Stock. Under the terms of the Series H Certificate of Designation, each share of the Company’s Series H Convertible Preferred Stock (the “Series H Preferred Stock”) has a stated value of $154.00 and is convertible into shares of the Company’s common stock, equal to the stated value divided by the conversion price of $23,654.10 per share (subject to adjustment in the event of stock splits or dividends). The Company is prohibited from effecting the conversion of the Series H Preferred Stock to the extent that, as a result of such conversion, the holder would beneficially own more than 9.99%, in the aggregate, of the issued and outstanding shares of the Company’s common stock calculated immediately after giving effect to the issuance of shares of common stock upon such conversion.

In the event of liquidation, the holders of the Series H Preferred Stock are entitled, pari passu with the holders of common stock, to receive a payment in the amount the holder would receive if such holder converted the Series H Preferred Stock into common stock immediately prior to the date of such payment.

Series H-3 Convertible Preferred Stock

On March 30, 2017, the Company filed the Certificate of Designation, Preferences and Rights of the Series H-3 Preferred Stock (the “Series H-3 Certificate of Designation”) with the Secretary of State of the State of Delaware, establishing and designating the rights, powers and preferences of the Series H-3 Preferred Stock. Under the terms of the Series H-3 Certificate of Designation, each share of the Series H-3 Preferred Stock has a stated value of $138.00 and is convertible into shares of common stock, equal to the stated value divided by the conversion price of $21,196.60 per share (subject to adjustment in the event of stock splits and dividends). The Company is prohibited from effecting the conversion of the Series H-3 Preferred Stock to the extent that, as a result of such conversion, the holder or any of its affiliates would beneficially own more than 9.99%, in the aggregate, of the issued and outstanding shares of common stock calculated immediately after giving effect to the issuance of shares of common stock upon the conversion of the Series H-3 Preferred Stock.

In the event of liquidation, the holders of the Series H-3 Preferred Stock are entitled, pari passu with the holders of common stock, to receive a payment in the amount the holder would receive if such holder converted the Series H-3 Preferred Stock into common stock immediately prior to the date of such payment.

Series H-6 Convertible Preferred Stock

On February 5, 2020, the Company filed the Certificate of Designations, Preferences and Rights of the Series H-6 Preferred Stock (the “Series H-6 Certificate of Designation”) with the Secretary of State of the State of Delaware, establishing and designating the rights, powers and preferences of the Series H-6 Preferred Stock. The Company designated up to 50,000 shares of Series H-6 Preferred Stock and each share has a stated value of $72.00 (the “H-6 Stated Value”). Each share of Series H-6 Preferred Stock is convertible at any time at the option of the holder thereof, into a number of shares of common stock of the Company determined by dividing the H-6 Stated Value by the initial conversion price of $460.80 per share, which was then further reduced to $320.00 under the anti-dilution adjustment provision, subject to a 9.99% blocker provision and further reduced to $92.16 under the anti-dilution adjustment provision. The Series H-6 Preferred Stock has the same dividend rights as the common stock, except as provided for in the Series H-6 Certificate of Designation or as otherwise required by law. The Series H-6 Preferred Stock also has the same voting rights as the common stock, except that in no event shall a holder of Series H-6 Preferred Stock be permitted to exercise a greater number of votes than such holder would have been entitled to cast if the Series H-6 Preferred Stock had immediately been converted into shares of common stock at a conversion price equal to $92.16. In addition, a holder (together with its affiliates) may not be permitted to vote Series H-6 Preferred Stock held by such holder to the extent that such holder would beneficially own more than 9.99% of the Company common stock. In the event of any liquidation or dissolution, the Series H-6 Preferred Stock ranks senior to the common stock in the distribution of assets, to the extent legally available for distribution.

The holders of Series H-6 Preferred Stock are entitled to certain anti-dilution adjustments if the Company issues shares of its common stock at a lower price per share than the applicable conversion price of the Series H-6 Preferred Stock. If any such dilutive issuance occurs prior to the conversion of the Series H-6 Preferred Stock, the conversion price will be adjusted downward to a price that cannot be less than $92.16.

Series H-7 Preferred Stock

On August 7, 2023, the Company entered into a Securities Purchase Agreement (the “Series H-7 Purchase Agreement”), pursuant to which it agreed to sell to certain existing investors (the “Series H-7 Investors”) in a private placement (the “Series H-7 Private Placement”) (i) an aggregate of 22,000 shares of the Company’s newly designated Series H-7 convertible preferred stock, par value $0.0001 per share, with a stated value of $1,000 per share (“Series H-7 Preferred Stock”), and (ii) warrants (the “Series H-7 Investor Warrants”) initially exercisable for up to an aggregate of 171,875 shares of common stock at a conversion price of $128.00 per share. The Company raised gross proceeds of $22,000,000 from the sale, which closed on August 10, 2023.

In connection with the Series H-7 Private Placement, pursuant to an Engagement Letter (the “Palladium Engagement Letter”), dated August 7, 2023, between the Company and Palladium Capital Group, LLC (the “Placement Agent”), the Company agreed to pay the Placement Agent (i) a cash fee equal to 6% of the gross proceeds from any sale of securities in the Series H-7 Private Placement and (ii) warrants (“Placement Agent Warrants,” and together with the Series H-7 Investor Warrants, the “Warrants”) to purchase shares of common stock equal to 2% of the number of shares of common stock that the Series H-7 Preferred Stock are initially convertible into, with an initial exercise price of $128.00 per share (subsequently reduced to $32.00 per share pursuant to the stock combination event adjustment provisions (the “Stock Combination Event”) following the one-for-eight Reverse Stock Split (the “2023 Reverse Stock Split”) effected on September 15, 2023) and a five-year term.

The shares of Series H-7 Preferred Stock are convertible into common stock at the election of the holder at any time with an initial conversion price of $128.00 per share, which pursuant to the Stock Combination Event, was subsequently reduced to $32.00 per share. On April 30, 2025, in connection with the issuance of stock options to certain officers of the Company and pursuant to the full ratchet and anti-dilution provisions contained in the Series H-7 Certificate of Designations and the Series H-7 Warrants, (i) the Series H-7 Conversion Price was adjusted from $32.00 per share to $7.616 per share and (ii) the exercise price of the Series H-7 Warrants was adjusted from $32.00 per share to $7.616 per share and the number of shares of common stock issuable upon exercise of such warrants was adjusted proportionally. On June 25, 2025, in connection with the reverse stock split effected on June 25, 2025, (the “2025 Reverse Stock Split”) pursuant to the stock combination event adjustment provisions contained in the Series H-7 Certificate of Designations, (i) the Series H-7 Conversion Price was adjusted from $7.616 per share to $6.1933 per share and (ii) the exercise price of the Series H-7 Warrants was adjusted from $7.616 per share to $6.1933 per share and the number of shares of common stock issuable upon exercise of such warrants was adjusted proportionally.

On February 9, 2024, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment of Certificate of Designations of Series H-7 Convertible Preferred Stock, which became effective upon filing, which amended the commencement of the monthly installment dates, to be between May 7, 2024, and August 7, 2025. The first such installment dates were May 7, 2024 and August 7, 2024, as elected by the applicable investor.

On December 2, 2024, the Company entered into a Waiver and Amendment Agreement (the “Amendment”) with the Required Holders (as defined in the Certificate of Designations). Pursuant to the Amendment, the Company and the Required Holders agreed (i) to amend (a) the Certificate of Designations, by filing a Certificate of Amendment to the Certificate of Designations (the “Certificate of Amendment”), and (b) the Series H-7 Purchase Agreement, such that, in each case, the Director Equity Grants are deemed to constitute “Excluded Securities” under the Transaction Documents (as such term is defined in the Series H-7 Purchase Agreement), and (ii) that the Required Holders waive the applicability of certain other provisions of the Transaction Documents with respect to such Director Equity Grants. The Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of December 2, 2024.

On March 30, 2025, the Company entered into an Omnibus Waiver and Amendment Agreement (“Waiver and Amendment Agreement”) with the Required Holders (as defined in the Certificate of Designations (the “Series H-7 Certificate of Designations”) for the Series H-7 Preferred Stock, pursuant to which, the Required Holders agreed (A) to amend (i) the Series H-7 Certificate of Designations, as described below, by filing a Certificate of Amendment to the Series H-7 Certificate of Designations with the Secretary of State of the State of Delaware (the “March 2025 Certificate of Amendment”), and (ii) that certain Securities Purchase Agreement, dated as of August 7, 2023 (the “Series H-7 Purchase Agreement”) to (A) amend the definition of “Excluded Securities” such that the definition includes the issuance of common stock issued after the date of the Series H-7 Purchase Agreement pursuant to an Approved Stock Plan (as defined in the Series H-7 Purchase Agreement), which in the aggregate does not exceed more than 2% of the shares of common stock issued and outstanding on the date immediately prior to the date of the Series H-7 Purchase Agreement (the “Excluded Securities Modification”), and (B) to waive certain restrictive covenants contained in the Series H-7 Purchase Agreement as described therein.

In addition, the March 2025 Certificate of Amendment amends the Series H-7 Certificate of Designations to (i) amend the restrictive covenant of the Series H-7 Certificate of Designations such that the Company is required from January 1, 2025, until no shares of Series H-7 Preferred Stock are outstanding, to maintain unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least 120% of the aggregate stated value of the Series H-7 Preferred Stock then outstanding, (ii) amend the definition of “Excluded Securities” substantially similar to the Excluded Securities Modification, and (iii) remove the restrictive covenant provision relating to the Segregated Cash (as defined in the Series H-7 Certificate of Designations) requirement. The March 2025 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of March 31, 2025.

On May 13, 2025, the Required Holders (as defined in the Series H-7 Certificate of Designations) executed and delivered a waiver (the “May 2025 Waiver”) to the Company, pursuant to which, the Required Holders agreed to waive any Equity Conditions Failure (as defined in the Series H-7 Certificate of Designations) including, without limitation, any rights or remedies in connection with such Equity Conditions Failure, effective as of March 31, 2025, and as of the date of the May 2025 Waiver.

On August 4, 2025, the Company entered into an Omnibus Waiver, Consent, Notice and Amendment (the “Series H-7 Agreement”) with the Required Holders (as defined in the Series H-7 Certificate of Designations). Pursuant to the Series H-7 Agreement, the Required Holders agreed to (i) amend the Series H-7 Purchase Agreement to amend the definition of “Excluded Securities” as set forth in the Series H-7 Amendment, (ii) waive certain rights under the Series H-7 Purchase Agreement, Series H-7 Warrants and Series H-7 Certificate of Designations in respect of the issuance of the Company’s Series I Convertible Preferred Stock (“Series I Preferred Stock”), and (iii) consent to the issuance of the Series I Preferred Stock, as required pursuant to certain terms of the Series H-7 Certificate of Designations, the Series H-7 Purchase Agreement and the Series H-7 Warrants, as applicable. In consideration of the foregoing, the Company agreed to pay to the Required Holders an aggregate of $350,000 by September 30, 2025, which may be paid in the form of cash, or, at the Holders’ sole election, added to the outstanding aggregate stated value of the Series H-7 Preferred Stock. Accordingly, the Company recorded the $350,000 in consent and waiver fee – Series H-7 on the consolidated statements of operations for the year ended December 31, 2025, and recorded the $350,000 in accrued preferred stock redemption payable (H-7), which was later settled through the issuance of 4,377 shares of Series H-7 Preferred Stock, as noted below.

The Company and the Required Holders further agreed pursuant to the Series H-7 Agreement to amend the Series H-7 Certificate of Designations by filing a Certificate of Amendment to the Series H-7 Certificate of Designations (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware. The Certificate of Amendment amends the Series H-7 Certificate of Designations to (i) extend the maturity date to February 4, 2027, (ii) revise the applicable payment dates and corresponding payable amounts of Dividends and Instalment Amounts (each as defined in the Series H-7 Certificate of Designations), (iii) modify the definition of “Excluded Securities” and (iv) modify the schedule of Instalment Dates (as defined in the Series H-7 Certificate of Designations). The Certificate of Amendment to the Series H-7 Certificate of Designations was filed with the Secretary of State for the State of Delaware on August 6, 2025.

Pursuant to the Series H-7 Agreement, the accrued preferred stock redemption payable related to the Series H-7 Preferred Stock, at the time of the Series H-7 Agreement, was settled through the issuance of 4,377 shares of Series H-7 Preferred Stock. As a result, the Company eliminated the accrued preferred stock redemption payable (H-7) balance of $5,309,174 on the consolidated balance sheets, with a corresponding increase to the carrying value of the Series H-7 Preferred Stock, net of issuance costs.

On April 27, 2026, the Company entered into an Omnibus Waiver, Consent, Notice and Amendment (the “April 2026 Series H-7 Amendment”) with the Required Holders, pursuant to which the Company filed an amended and restated Certificate of Designations of the Series H-7 Preferred Stock that (i) extended the maturity date to October 27, 2027, and (ii) removed the installment (amortization) payment obligations and related covenants. In consideration of the foregoing, the Company issued the Waiver Warrants described below.

The Company determined that the April 2026 Series H-7 Amendment should be accounted for as an extinguishment of the original Series H-7 Preferred Stock and a reissuance of the amended instrument as a new instrument on April 27, 2026. Immediately prior to the extinguishment, the carrying value of the Series H-7 Preferred Stock was adjusted to its redemption value, and the amended instrument was recognized at its reissuance date fair value, with no impact to net income. In connection with the extinguishment, the Company also derecognized the embedded derivative liability previously bifurcated from the Series H-7 Preferred Stock related to the installment redemption features removed by the April 2026 Amendment.

The Amended Series H-7 Preferred Stock continues to be classified within temporary (mezzanine) equity and considered probable of becoming redeemable, with changes in redemption value continuing to be accreted to the maturity date using the effective maturity method.

The Company identified embedded derivative features in the Series H-7 Preferred Stock that are bifurcated and measured at fair value, with subsequent changes recognized in earnings (see Note 11. Fair Value Measurements). At issuance, the Company recorded a total discount of $15,484,324, comprised of the embedded derivative fair value of $5,147,000, issuance costs of $563,324, and fair value of warrants issued of $9,774,000. The discount is being accreted using the effective interest method, with accretion of $0 and $1,686,854 recorded as deemed dividends during the six months ended June 30, 2026 and 2025, respectively.

The Series H-7 Certificate of Designations requires the Company to maintain unencumbered cash and cash equivalents of at least 120% of the aggregate stated value of outstanding Series H-7 Preferred Stock. The Company had $5,114,563 and $110,264 in restricted cash as of June 30, 2026 and December 31, 2025.

The Series H-7 Certificate of Designations includes triggering events that would allow holders to require redemption at a premium, including suspension of trading for five consecutive days or failure to pay amounts when due.

As a result of the issuance of the Series K Preferred Stock, as described below, the conversion price was reduced from $6.1933 to $2.51 per share.

During the quarter ended June 30, 2026, Required Holders converted the remaining 1,180 shares of Series H-7 Preferred Stock for an aggregate amount of 534,975 shares of common stock. As a result, there were no outstanding shares of Series H-7 Preferred Stock at June 30, 2026.

During the three and six months ended June 30, 2026, the Company recognized $(15,241) and $160,099 of net preferred dividends which is comprised of $151,024 and $9,075 of accrued and deemed preferred dividends for cash premium on instalment redemptions ultimately settled in shares of Common Stock.

During the three and six months ended June 30, 2025, the Company recognized $870,461 and $1,704,194 of net preferred dividends which is comprised of $546,825 and $1,041,643 of accrued and deemed dividends for cash premium for instalment redemptions ultimately settled in shares of Common Stock.

Series I Preferred Stock

On August 4, 2025, the Company entered into a Securities Purchase Agreement (the “Series I Purchase Agreement”) with certain accredited investors, pursuant to which it agreed to sell (i) an aggregate of 7,000 shares of the Company’s newly-designated Series I Preferred Stock, with a par value of $0.0001 per share and a stated value of $1,000 per share, initially convertible into up to 875,000 shares of the Company’s common stock at an initial conversion price of $8.00 per share pursuant to the Certificate of Designations of the Series I Preferred Stock (the “Series I Certificate of Designations”) and (ii) warrants to acquire up to an aggregate of 875,000 shares of common stock (the “Series I Warrants”) at an exercise price of $8.00 per share (collectively, the “Series I Private Placement”). The closing of the Series I Private Placement occurred on August 8, 2025. The aggregate gross proceeds from the Series I Private Placement were $7,000,000.

In connection with the Series I Private Placement, pursuant to (A) an engagement letter (the “GPN Agreement”) with GP Nurmenkari Inc. (“GPN”) and (B) an engagement letter (the “Palladium Agreement,” and collectively with the GPN Agreement, the “Engagement Letters”) with Palladium Capital Group, LLC (“Palladium,” and collectively with GPN, the “Placement Agents”), the Company engaged the Placement Agents to act as non-exclusive placement agents in connection with the Series I Private Placement, pursuant to which, the Company agreed to (i) pay each Placement Agent a cash fee equal to 4% of the gross proceeds of the Series I Private Placement (including any cash proceeds realized by the Company from the exercise of any outstanding warrants of the Company), (ii) reimbursement and payment of certain expenses, and (iii) issue to each of the Placement Agents on the closing date, warrants to purchase up to an aggregate number of shares of common stock equal to 4% of the aggregate number of shares of common stock underlying the securities issued in the Series I Private Placement, including upon exercise of any outstanding warrants of the Company, with terms identical to the Series I Warrants (the “Series I Placement Agent Warrants”).

The Series I Preferred Stock is convertible into shares of common stock (the “Series I Conversion Shares”) at the election of the holder at any time at an initial conversion price of $8.00 per share (the “Series I Conversion Price”). The Series I Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like and dilutive issuances (in each case, subject to certain exceptions). The Company is required to redeem the Series I Preferred Stock in equal instalments, commencing on November 30, 2025, and thereafter on the last trading day of the third calendar month immediately following the previous Instalment Date, until the maturity date of October 27, 2027.

The holders of the Series I Preferred Stock are entitled to dividends of 7% per annum, compounded each calendar quarter, which are payable in arrears (i) quarterly on each Installment Date (as defined in the Series I Certificate of Designations), in cash out of funds legally available therefor and, (ii) prior to the first Installment Date, payable by way of inclusion of the dividends in the Conversion Amount (as defined in the Series I Certificate of Designations) on each conversion date occurring prior to the first Installment Date. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series I Certificate of Designations), the Series I Preferred Stock accrue dividends at the rate of 15% per annum. The holders of the Series I Preferred Stock are entitled to vote with holders of the Common Stock on an as-converted basis, with the number of votes to which each holder of Series I Preferred Stock is entitled to be calculated assuming a conversion price of $7.628 per share, which was the Minimum Price (as defined in Rule 5635 of the Rules of the Nasdaq Stock Market) applicable immediately before the execution and delivery of the Series I Purchase Agreement, subject to certain beneficial ownership limitations as set forth in the Certificate of Designations.

Notwithstanding the foregoing, the Company’s ability to settle conversions using shares of common stock is subject to certain limitations set forth in the Series I Certificate of Designations. Further, the Series I Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of the Series I Preferred Stock under the Series I Certificate of Designations.

The Series I Certificate of Designations includes certain triggering events including, among other things, the suspension from trading or the failure of the common stock to be trading or listed (as applicable) on an eligible market for a period of five (5) consecutive trading days, the Company’s failure to pay any amounts due to the holders of the Series I Preferred Stock when due. In connection with a triggering event, each holder of Series I Preferred Stock will be able to require the Company to redeem in cash any or all of the holder’s shares of Series I Preferred Stock at a premium set forth in the Series I Certificate of Designations.

The shares of Series I Preferred Stock were determined to be more akin to a debt-like host than an equity-like host. The Company identified the following embedded features that are not clearly and closely related to the debt host instrument: 1) make-whole interest upon a contingent redemption event, 2) make-whole interest upon a conversion event and 3) an increase in the dividend rate related to the occurrence of a triggering event. These features were bundled together, assigned probabilities of being affected and measured at fair value. Subsequent changes in fair value of these features are recognized in the unaudited condensed consolidated statement of operations. The Company estimated the $23,000 fair value of the bifurcated embedded derivative at issuance using a Monte Carlo simulation model, with the following inputs: (i) estimated equity volatility of 135.0%, (ii) the time to maturity of 1.49 years, (iii) a discounted market interest rate of 13.76%, (iv) dividend rate of 7.0%, (v) a penalty dividend rate of 15.0%, and (vi) probability of default of 9%. The fair value of the bifurcated derivative liability was estimated utilizing the with and without method which uses the probability weighted difference between the scenarios with the derivative and the plain vanilla maturity scenario without a derivative.

On April 27, 2026, the Company entered into an Omnibus Waiver, Consent, Notice and Amendment (the “April 2026 Series I Amendment,” and together with the April 2026 Series H-7 Amendment, the “April 2026 Amendment”) with the Required Holders, pursuant to which the Company filed an amended and restated Certificate of Designations of the Series I Preferred Stock that (i) extended the maturity date to October 27, 2027, and (ii) removed the installment (amortization) payment obligations and related covenants. In consideration of the foregoing, the Company issued the Waiver Warrants described below.

The Company determined that the April 2026 Series I Amendment should also be accounted for as an extinguishment of the original Series I Preferred Stock and a reissuance of the amended instrument as a new instrument on April 27, 2026. Immediately prior to the extinguishment, the carrying value of the Series I Preferred Stock was adjusted to its redemption value, recognizing the related change in fair value of the embedded derivative liability, as discussed in Note 10. Derivative Instruments, through that date. The amended Series I Preferred Stock was then recognized at its reissuance date fair value, with no impact to net income. The Holder’s previously identified option to defer installment payments, which was not separately bifurcated prior to the amendment, is removed with no separate accounting effect.

The amended Series I Preferred Stock continues to be classified within temporary (mezzanine) equity and considered probable of becoming redeemable, with changes in redemption value continuing to be accreted to the maturity date using the effective interest method.

The discount to the fair value is included as a reduction to the carrying value of the Series I Preferred Stock. During the year ended December 31, 2025, the Company recorded a total discount of $10,887,185 upon issuance of the Series I Preferred Stock, which was comprised of the issuance date fair value of the associated embedded derivative of $24,000, stock issuance costs of $1,322,669, of which $567,854 was paid in cash and $754,815 was allocated as the Series I Placement Agent Warrants both of which were recorded to mezzanine equity, and the fair value of the Series I Warrants of $3,981,034. As of June 30, 2026, it is probable that the Series I Preferred Stock will be redeemed. In accordance with ASC 480-10-S99-3A, the Company is accreting the discount on the effective interest method and $2,689,931 was recorded as a deemed dividend during the six months ended June 30, 2026.

In connection with the Series I Purchase Agreement, the Company and the investors entered into a Registration Rights Agreement (the “Series I Registration Rights Agreement”), pursuant to which the Company is required to file a resale registration statement (the “Series I Registration Statement”) with the SEC to register for resale 200% of the shares of common stock issuable upon conversion of the Series I Preferred Stock and upon exercise of the Series I Warrants promptly following the closing date, but in no event later than 30 calendar days after the closing date, and to have such Series I Registration Statement declared effective by the Effectiveness Deadline (as defined in the Series I Registration Rights Agreement). On September 8, 2025, the Company filed the Series I Registration Statement with the SEC and subsequently amended the Series I Registration Statement on October 10, 2025. On January 9, 2026, the SEC declared the Series I Registration Statement effective.

As a result of the issuance of the Series K Preferred Stock, as described below, the conversion price was reduced from $8.00 to $2.51 per share.

During the quarter ended June 30, 2026, Series I Preferred Stock holders converted 6,700 shares of Series I Preferred Stock for an aggregate amount of 2,669,316 shares of common stock. As a result, there were 300 shares of Series I Preferred Stock outstanding at June 30, 2026.

During the three and six months ended June 30, 2026, the Company recognized $(49,913) and $11,609 of net preferred dividends which is comprised of $252,509 and $(240,900) of accrued and deemed preferred dividends for cash premium on instalment redemptions ultimately settled in shares of Common Stock.

Series J Preferred Stock

On April 27, 2026, in connection with the JDA, see Note 16. Commitments and Contingencies, the Company issued to Kopin 730 shares of newly designated Series J Convertible Preferred Stock, par value $0.0001 per share and stated value $1,000 per share (the “Series J Preferred Stock”), constituting 19.9% of the pro forma fully diluted outstanding shares of Common Stock, as consideration for Kopin’s grant of the license to the project technology. The Series J Preferred Stock is classified as temporary (mezzanine) equity because it may be settled in cash or other assets upon the occurrence of a Fundamental Transaction (as defined in the Series J Certificate of designations), which is an event not solely within the Company’s control. Because the shares are not currently redeemable and it is not probable that they will become redeemable (as the Company does not consider the occurrence of a Fundamental Transaction to be probable), the carrying amount is not adjusted to the redemption amount.

The Company accounted for the issuance as an asset acquisition under ASC 805. Because the Series J Preferred Stock was issued as non-cash consideration rather than for cash, it was initially measured at its issuance-date fair value of $730,533, determined on an as-converted basis using the $2.51 conversion price and the Company’s common stock price on the issuance date, and recorded in temporary equity. In addition, the Company recognized an anti-dilution liability at its issuance date fair value of $16,379,662 (see below and Note 11. Fair Value Measurements). The total consideration transferred, consisting of the fair value of the Series J Preferred Stock and the anti-dilution liability, together with $128,521 of directly attributable transaction costs, was recognized as an intangible asset of $17,238,716 representing the acquired right to use the licensed project technology (see Note 6. Intangible Assets).

The following table summarizes the initial accounting for the transaction:

The Series J Preferred Stock is convertible into shares of Common Stock at the holder’s option at any time at an initial conversion price of $2.51 per share (the “Series J Conversion Price”), subject to customary adjustments for stock dividends, stock splits, and reclassifications. The number of Series J Conversion Shares initially may not exceed 291,049 (the “Maximum Issuance”); however, the Maximum Issuance is increased upon the occurrence of a Dilutive Issuance (as defined in the Series J Certificate of Designations) or a Dilutive Conversion. Once adjustments to the Maximum Issuance have been made in respect of (i) Dilutive Issuances and (ii) any exercises for cash of Common Stock Equivalents outstanding as of April 27, 2026, or approved for grant by the Board on such date, in an aggregate amount equal to $50 million, no further adjustments to the Maximum Issuance are made for any subsequent Dilutive Conversions or Dilutive Issuances. However, the Company’s obligation to issue shares of Common Stock to Kopin in respect of non-cash issuances, including conversions of preferred stock, is not subject to the $50 million cap and continues regardless of whether such cap has been reached. Anti-dilution shares issued to Kopin are delivered in the form of Series J Preferred Stock, computed on a preferred share equivalent basis at the Series J Conversion Price of $2.51 per share.

Upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to the Company’s Common Stock and its other junior capital stock, and pari passu with the Series H-7 Convertible Preferred Stock, with respect to preferences as to dividends, distributions and payments.

Holders are entitled to dividends of 6% per annum, accruing daily and payable semi-annually on each June 30 and December 31, in cash; provided that the Company may, at its sole option, elect to pay dividends in kind by issuing additional shares of Series J Preferred Stock having an aggregate stated value equal to the dividend then due. Unpaid dividends continue to accrue daily and compound on a semi-annual basis at the applicable rate until paid in full.

The Company identified anti-dilution provisions in the Series J Preferred Stock that are a freestanding financial instrument and required the recognition of an anti-dilution liability. The anti-dilution liability was initially recognized at its issuance date fair value of $16,379,662 and is measured at fair value on a recurring basis, with subsequent changes in fair value recognized in other income (expense), net in the unaudited condensed consolidated statements of operations. During the quarter ended June 30, 2026, the Company issued 3,080 additional shares of Series J Preferred Stock to under the anti-dilution provisions, a portion of which was applied against the $50 million cash issuance cap; the settlement of this obligation in Series J Preferred Stock reduced the anti-dilution liability by $4,871,467, with a corresponding increase in the temporary equity (see below). For the three and six months ended June 30, 2026, the Company recognized a loss of $8,044,334 for the change in fair value of the anti-dilution liability. After these changes, the fair value of the anti-dilution liability was $19,552,529 as of June 30, 2026 (see Note 11. Fair Value Measurements).

Except as expressly set forth in the Series J Certificate of Designations or as otherwise required by law, the Series J Preferred Stock does not have any voting rights prior to conversion into shares of Common Stock; upon any such conversion, the holders of the converted shares are entitled full voting rights as holders of Common Stock.

As of June 30, 2026, the carrying amount of the Series J Preferred Stock was $5,636,020.

Series K Preferred Stock

On April 27, 2026, the Company entered into a Securities Purchase Agreement with certain accredited investors (the “Series K Private Placement”), pursuant to which it issued 21,500 shares of newly designated Series K Convertible Preferred Stock, par value $0.0001 per share and stated value of $1,000 per share, for aggregate gross proceeds of $21,500,000. The Series K Preferred Stock is classified as temporary equity (mezzanine equity) because it is redeemable for cash or other assets upon the occurrence of events not solely within the Company’s control, including certain triggering events, a change of control and certain bankruptcy related events.

The $21,500,000 of gross proceeds was allocated between the Series K Preferred Stock and the Series K Warrants based on their relative fair values at issuance, as described below. The initial carrying amount of the Series K Preferred Stock of $10,851,482 represents $12,714,483 of gross proceeds allocated to the Series K Preferred Stock, net of $1,863,001 of allocated issuance costs. The carrying amount is not accreted to the redemption amount because the Series K Preferred Stock is not currently redeemable and it is not probable that it will become redeemable, as the occurrence of the events that would permit or require redemption is not currently probable. Dividends on the Series K Preferred Stock accrue and increase the carrying amount, with a corresponding reduction of income available to common stockholders.

The Series K Preferred Stock and the Series K Warrants were issued together in a single transaction. Because the Series K Warrants are classified in stockholders’’ equity, the Company allocated the $21,500,000 of. Gross proceeds between the two instruments based on their relative fair values at issuance. The issuance date fair values were $24,789,000 for the Series K Preferred Stock and $17,128,827 for the Series K Warrants. Issuance costs of $3,150,306, consisting of a $1,720,000 placement agent cash fee, $60,000 of other cash offering costs, and $1,370,306 representing the fair value of warrants issued to the placement agent, were allocated between the two instruments in proportion to the gross proceeds allocated to each. The following table summarizes the allocation of the Series K Private Placement proceeds and issuance costs:

As of the issuance date, no bifurcated derivative liability was recognized because the fair value of the bifurcated features was determined to be $0; accordingly, no portion of the proceeds allocated to the Series K Preferred Stock was further allocated to a derivative.

Holders are entitled to dividends of 7% per annum, compounded quarterly and payable in arrears in cash out of funds legally available therefor, unless the Company and holder mutually agree to convert dividends into Common Stock at a price not less than the floor price. Dividends accrue at 15% per annum during the occurrence and continuance of a triggering event. The Series K Preferred Stock is convertible, at the holder’s option, into a fixed number of shares of Common Stock at $2.51 per share, and is currently convertible into up to 8,565,737 shares of Common Stock, settled in shares, subject to beneficial ownership limitations. The conversion price may be reduced upon the issuance of Common Stock or Common Stock Equivalents at a price below the then-effective conversion price (excluding standard anti-dilution adjustments). Upon a triggering event, a holder may require cash redemption at the greater of 130% of the conversion amount or 130% of a value based on the closing sale price of the Common Stock, and the shares are mandatorily redeemable at such price upon certain bankruptcy events. Upon a change of control, a holder may require redemption at a premium. Upon liquidation, holders are entitled, before any distribution to junior stock, to the greater of 125% of the conversion amount or the amount they would receive upon conversion. Holders vote with holders of Common Stock as a single class on an as-converted basis. The Series K Preferred Stock is a participating security because holders participate, on an as-converted basis, in dividends and other distributions of the Company’s assets declared to holders of Common Stock. Because the Company reported a net loss for the three and six months ended June 30, 2026, there were no undistributed earnings to allocate to the Series K Preferred Stock under the two-class method, and the as-converted shares underlying the Series K Preferred Stock were excluded from the computation of diluted earnings per share for both periods because their effect would have been anti-dilutive.

For the three and six months ended June 30, 2026, the Company recognized $259,194 and $259,194, respectively, of dividends on the Series K Preferred Stock, which are deducted in computing income available to common stockholders. No shares of Series K Preferred Stock were converted, and no triggering event or change of control occurred, during the three and six months ended June 30, 2026.

The Series K Preferred includes a down-round provision that, when triggered, results in a deemed dividend reducing income available to common stockholders in computing basic earnings per share. The down-round feature was not triggered during the three and six months ended June 30, 2026.

The Company determined that the Series K Preferred Stock is more akin to an equity-like host. The Company separated two embedded features: (i) an optional conversion upon a triggering event with a variable conversion price and (ii) a contingent dividend rate and the Company evaluated them for bifurcation from the equity host. No value was assigned to the variable conversion price feature because no variable price securities had been issued as of June 30, 2026, and the issuance of such securities is considered highly improbable. The contingent dividend rate feature was determined to be de minimis, as the triggering events could not be reasonably quantified using the Company’s credit risk and are considered highly improbable to occur. Accordingly, no bifurcated derivative liability was recognized as of the issuance date.

As of June 30, 2026, the carrying amount of the Series K Preferred Stock was $11,110,676, consisting of the $10,851,482 initial carrying amount plus $259,194 of accrued dividends.

Common Stock Warrants

Series H-7 Warrants

In August 2023, the Company issued certain warrants to purchase common stock (the “Series H-7 Warrants”) pursuant to the Series H-7 Purchase Agreement (as defined above). The Series H-7 Warrants are entitled to certain anti-dilution adjustments, if the Company issues shares of its common stock at a lower price per share than the applicable exercise price. The exercise price of the Series H-7 Warrants is subject to adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable exercise price. As a result of the 2023 Reverse Stock Split, the exercise price of the Series H-7 Warrants was adjusted from $128.00 to $32.00 and the number of shares of common stock issuable upon exercise of the Warrants was adjusted proportionally to an additional 525,937 shares of common stock.

Pursuant to the share combination event adjustment provisions in the Series H-7 Warrants, the 2025 Reverse Stock Split adjusted the exercise price from $32.00 per share to $6.1933 per share and the number of shares of common stock issuable upon the exercise of the Series H-7 Warrants was adjusted proportionally to an additional 2,922,020 shares of common stock, for an aggregate of 3,623,270 Series H-7 Warrants outstanding.

The additional Series H-7 Warrants were determined to be subject to liability classification as they are considered to be indexed to the Company’s own stock but contain a provision where the holder of the Series H-7 Warrants have the right to require the Company to redeem the Series H-7 Warrants from the holder in cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of the Series H-7 Warrants at that time, in accordance with ASC 815. As such, the Company recorded the Series H-7 Warrants as a liability at fair value with subsequent changes in fair value recognized in earnings. See Note 11. Fair Value Measurements for inputs related to the Company’s use of the Black-Scholes Model to calculate the value of the Series H-7 Warrants.

As a result of the issuance of the Series K Preferred Stock, as described above, the conversion price was reduced from $6.1933 to $2.51 per share.

Series I Warrants

On August 6, 2025, the Company issued certain warrants to purchase up to an aggregate of 875,000 shares of the Company’s common stock (the “Series I Warrants”) pursuant to the Series I Purchase Agreement, with an exercise price of $8.00 per share and a date of expiration five years from the date of issuance. The Series I Warrants are entitled to certain anti-dilution adjustments, if the Company issues shares of its common stock at a lower price per share than the applicable exercise price.

The Series I Warrants were determined to be subject to liability classification as they are considered to be indexed to the Company’s own stock but contain a provision where the holder of the Series I Warrants have the right to require the Company to redeem the Series I Warrants from the holder in cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of the Series I Warrants at that time, in accordance with ASC 815. As such, the Company recorded the Series I Warrants as a liability at fair value with subsequent changes in fair value recognized in earnings. The Company utilized the Black Scholes Model to calculate the fair value of these Series I Warrants. The fair value of the Series I Warrants of $3,981,034 was estimated at the date of issuance using the stock price of $5.92, an exercise price of $8.00, and the following weighted average assumptions: (i) dividend yield 0%; (ii) expected term of 5 years; (iii) equity volatility of 110%; and (iv) a risk-free interest rate of 4.21%.

In addition, the Company also issued the Series I Placement Agent Warrants (as defined herein) to purchase up to an aggregate of 140,000 shares of the Company’s common stock to the Placement Agents (as defined herein). The Company utilized the Black Scholes Model to calculate the value of the Series I Placement Agent Warrants issued during the year ended December 31, 2025. The fair value of the Series I Placement Agent Warrants of $636,966 was estimated at the date of issuance using the stock price of $5.92, an exercise price of $8.00, and the following weighted average assumptions: (i) dividend yield 0%; (ii) expected term of 5 years; (iii) equity volatility of 110%; and (iv) a risk-free interest rate of 4.21%.

In connection with the issuance of the Series K Preferred Stock and the Series K Warrants in April 2026, at an effective price of $2.51 per share, a price below the then-current exercise price of the Series I Warrants, the exercise price of the Series I Warrants was reduced from $8.00 to $2.51 per share. This reduction was effected by the anti-dilution provisions of the Series I Warrants and was not a discretionary modification by the Company. As described below under “Series H-7 and Series I Warrant Amendment”, the Series I Warrants were reclassified from liability to equity classification on August 26, 2025, and are not remeasured at fair value on a recurring basis. Because the reduction was effected through the Series I Warrants’ standard anti-dilution provision, no incremental fair value was recognized and no amount was recorded in the unaudited condensed consolidated financial statements as a result of the reduction.

Series H-7 and Series I Warrant Amendment

On August 26, 2025, the Company entered into an omnibus amendment (the “Warrant Amendment”) with the Required Holders (as defined in the Series H-7 Purchase Agreement and the Series I Purchase Agreement) to amend certain terms of the Series I Warrants and Series H-7 Warrants. The Warrant Amendment makes certain adjustments to the definition of a “Fundamental Transaction” and related provisions in each of the Warrants. In addition, the Warrant Amendment amends (i) the definition of the “Black Scholes Value” in the Series H-7 Warrants related to the volatility input, which is now calculated utilizing an expected volatility equal to the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the trading day immediately following the earliest to occur of (1) the public disclosure of the applicable Fundamental Transaction and (2) the date of a holder’s request, and (ii) the definition of the “Black Scholes Consideration Value” in the Series H-7 Warrants related to the volatility input, which is now calculated utilizing an expected volatility equal to the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the trading day immediately following the date of issuance of the applicable options, convertible securities or Adjustment Right (as defined in the Series H-7 Warrants). Further, the Warrant Amendment removes the provision in the Series H-7 Warrants providing for an adjustment in the exercise price of the Series H-7 Warrants upon (a) the increase or decrease of the purchase or exercise price of any options, (b) the issuance of additional consideration upon the conversion of any convertible securities or (c) the increase or decrease of the rate of conversion of any convertible securities.

The Warrant Amendment resulted in the Series I Warrants and Series H-7 Warrants to be considered equity classified in accordance with ASC 815. The fair value of the Series I Warrants and Series H-7 Warrants on August 26, 2025, of $18,608,000, was reclassified from warrant liability to additional paid-in capital. The Company remeasured the Series I Warrants and Series H-7 Warrants at fair value as of August 26, 2025, and recognized the change in fair value as a non-cash loss of $17,971,034. The fair value of the Series I Warrants and Series H-7 Warrants of $18,608,000 was estimated at August 26, 2025, utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.95 years and 2.96 years, respectively; equity volatility of 105% and 97%, respectively; and a risk-free interest rate of 3.7% and 3.6%, respectively.

Series K Warrants

In connection with the Series K Private Placement, the Company issued warrants (the “Series K Warrants”) to purchase an aggregate of up to 8,565,737 shares of Common Stock at an exercise price of $2.51 per share. The Series K Warrants were issued together with the Series K Preferred Stock as part of the same financing to provide investors additional upside participation in the Company’s Common Stock. The Series K Warrants are exercisable immediately and expire on the fifth anniversary of the date of issuance. Each Series K Warrant entitles the holder to purchase one share of Common Stock for each share of Common Stock into which the corresponding Series K Preferred Stock is convertible. The Series K Warrants are not listed on any national securities exchange.

The Series K Warrants are exercisable in whole or in part at any time, for cash or by cashless exercise. The exercise price is subject to customary anti-dilution adjustments and may be reduced to the base share price upon the Company’s issuance of Common Stock or Common Stock Equivalents at an effective price below the then effective exercise price.

The Series K Warrants are classified in stockholders’ equity. Of the $21,500,000 of gross proceeds, $8,785,517 was allocated to the Series K Warrants based on their relative fair value and recorded in additional paid-in capital, and $1,287,305 of allocated issuance costs was recorded as a reduction of additional paid-in capital. The fair value of the Series K Warrants at issuance was $17,128,827, determined using a Black-Scholes option pricing model. See “Series K Preferred Stock” above. Because the Series K Warrants are classified in equity, they are not remeasured at fair value.

In connection with the Series K Private Placement, the Company issued warrants to purchase 685,259 shares of Common Stock to the placement agent (the “Placement Agent Warrants”), on the same terms as the Series K Warrants, as compensation for placement agent services. The Placement Agent Warrants are accounted for under ASC 718 as nonemployee share-based compensation and are equity-classified. The fair value of the Placement Agent Warrants of approximately $1,370,306 was determined using a Black-Scholes option pricing model and included in the $3,150,306 of total issuance costs of the Series K Private Placement.

The Series K Warrants are participating securities and are reflected in diluted earnings per share under the treasury stock method to the extent they are dilutive. The Series K Warrants were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2026, because the exercise price exceeded the average market price of the Common Stock during the period and they were antidilutive. The Series K Warrants include a down-round feature under which the exercise price may be reduced upon a dilutive issuance; the value of the effect of any down-round feature triggered during the reporting period is recognized as a deemed dividend reducing income available to common shareholders in computing basic earnings per share. The Series K Warrant down-round feature was not triggered during the three and six months ended June 30, 2026.

As of June 30, 2026, the Company had 9,250,996 Series K Warrants (including Placement Agent Warrants) outstanding.

Waiver Warrants

Pursuant to the April 2026 Amendments, the Company issued warrants to purchase up to an aggregate of 1,000,000 shares of Common Stock (the “Waiver Warrants”) to the Required Holders, pro rata based on the number of shares of Series H-7 Preferred Stock and Series I Preferred Stock held as of the date of the April 2026 Amendments, as consideration for the Required Holders’ consent to the amendments to the Series H-7 and Series I Certificate of Designations. The Waiver Warrants are exercisable immediately at an exercise price of $5.00 per share and expire five years from the date of issuance.

The Waiver Warrants are classified within stockholders’ equity in accordance with ASC 815-40 and are not remeasured at fair value on a recurring basis. In connection with their issuance, the Company recognized a charge of $1,565,000 in other income (expense), net in the unaudited condensed consolidated statement of operations, representing the fair value of the consideration provided to the Required Holders for their consent to the April 2026 Amendments.

Altucher Consulting Warrants

On August 4, 2025, the Company entered into a consulting agreement (the “Altucher Consulting Agreement”) with James Altucher and Z-List Media, Inc. (the “Consultant”), pursuant to which, the Company issued warrants to purchase up to an aggregate of 1,000,000 shares of common stock (the “Prior Consultant Warrants”), consisting of four tranches at exercise prices ranging from $8.00 to $17.50 per share. The grant date fair value of the Prior Consultant Warrants was $4,891,747, of which $1,834,405 had been recognized as compensation cost through the modification date discussed below.

On April 27, 2026, the Company and the Prior Consultant agreed to amend and restate the Prior Altucher Consulting Agreement by entering into an amended and restated consulting services agreements (the “Altucher Consulting Agreement”) with JD Advisors, LLC, an affiliate of the Prior Consultant (the “Consultant”). In connection with the Altucher Consulting Agreement, the Consultant entered into a warrant cancellation agreement pursuant to which the Prior Consultant Warrants (warrants to purchase up to 1,000,000 shares of common stock) were cancelled, and the Company issued to the Consultant new warrants to purchase up to an aggregate of 900,000 shares of common stock (the “Consultant Warrants”), consisting of: (i) a warrant to purchase up to 300,000 shares at an exercise price of $3.00 per share, immediately exercisable, (ii) a warrant to purchase up to 200,000 shares at an exercise price of $6.00 per share, exercisable six months from issuance, (iii) a warrant to purchase up to 200,000 shares at an exercise price of $9.00 per share, exercisable twelve months from issuance, and (iv) a warrant to purchase up to 200,000 shares at an exercise price of $12.00 per share, exercisable eighteen months from issuance, in each case with a term of five years from the date of issuance. The Altucher Consulting Agreement has a term of two years from April 27, 2026.

The Company accounted for the cancellation and reissuance as a modification of an equity classified share-based payment award under ASC 718-20. Management determined that the service-based vesting conditions of the Prior Consulting Warrants were probable of achievement immediately before the modification and that the vesting conditions of the Consultant Warrants are probable of achievement after the modification, resulting in a Type I (probable-to-probable) modification.

The Company determined the fair value of the Prior Consultant Warrants immediately before cancellation and the fair value of the Consultant Warrants immediately after issuance using the Black-Scholes option pricing model. The fair value of the Prior Consultant Warrants immediately before modification was $1,067,000, using the following assumptions: stock price of $2.51, exercise prices ranging from $8.00 to $17.50, remaining term of 4.27 years, expected volatility of 96.0%, dividend yield of 0%, and a risk-free rate of 3.9%. The fair value of the Consultant Warrants immediately after modification was $1,327,000, using the following assumptions: stock price of $2.51, exercise prices ranging from $3.00 to $12.00, term of 5.00 years, expected volatility of 93.0%, dividend yield of 0%, and a risk-free rate of 3.9%. The modification resulted in incremental fair value of $260,000.

The Company recognized total compensation cost of $3,317,342 in connection with the modification, comprised of the $3,057,342 of unrecognized grant date fair value of the Prior Consultant Warrants plus $260,000 of incremental fair value described above. This amount is recognized ratably over the two-year service period ending April 27, 2028. As each tranche of the Consultant Warrants becomes exercisable, the Company records a prepaid expense equal to that tranche’s pro-rata share of the total compensation cost, which is then amortized to compensation expense over the service period. As of June 30, 2026, the Company recorded $1,105,781 to prepaid expense upon the reissuance of the First Tranche, of which $829,335 remained as the prepaid balance after amortization through June 30, 2026.

For the three and six months ended June 30, 2026, the Company recorded $480,268 and $1,091,736 of stock-based compensation related to the Prior Consultant Warrants and the First Tranche of the Consultant Warrants under general and administrative expenses on the unaudited condensed consolidated statement of operations.

NOTE 9. STOCK-BASED COMPENSATION

Stock Option Awards

On June 18, 2026, the Company granted options to purchase an aggregate of 230,168 shares of common stock to its four non-employee directors, with an exercise price of $3.70 per share and a 10-year contractual term. The options vest 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service. The grant date fair value of the options was $562,988 using the Black-Scholes option pricing model.

On June 18, 2026, the Company granted options to purchase an aggregate of 150,000 shares of common stock to certain employees, with an exercise price of $3.70 per share and a 10-year contractual term. The options vest 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service. The grant date fair value of the options was $366,900 using the Black-Scholes option pricing model.

The Company recognized $275,172 in stock-based compensation expense for the three and six months ended June 30, 2026.

Restricted Stock Awards

On June 18, 2026, the Company granted 358,566 restricted shares of common stock to Joshua Silverman, the Company’s Chief Executive Officer, with a grant date fair value of $2.51 per share and an aggregate fair value of $900,000. The award vests 25% on the grant date and 25% on each of the next three fiscal quarter-ends, subject to continued service.

The Company recognized $398,494 in stock-based compensation expense for the three and six months ended June 30, 2026.

NOTE 10. DERIVATIVE INSTRUMENTS

The Company recorded a derivative liability related to the derivatives embedded within the Series I Preferred Stock, primarily related to make-whole and penalty dividend features (see Note 8. Stockholders’ Equity). Changes in fair value are recognized in earnings in change in fair value – derivative liability in the unaudited condensed consolidated statements of operations. This note presents only the embedded derivative bifurcated from the Series I Preferred Stock. The embedded features of the Series K Preferred Stock were evaluated and determined not to require bifurcation, as discussed in Note 8. Stockholders’ Equity. The anti-dilution liability associated with the Series J Preferred Stock is accounted for separately and is disclosed in Note 11. Fair Value Measurements.

The following table presents the fair value of the Company’s embedded derivatives as of June 30, 2026:

For the three and six months ended June 30, 2026, the Company recognized a gain of $43,000 and $37,000, respectively, related to embedded derivatives.

NOTE 11. FAIR VALUE MEASUREMENTS

The Company measures certain assets and liabilities at fair value on a recurring basis in accordance with ASC 820,Fair Value Measurements.

The following table presents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026:

Level 1 inputs consist of quoted prices in active markets for identical assets. The Company’s derivative liability and anti-dilution liability are classified within Level 3 of the fair value hierarchy because the valuations incorporate significant unobservable inputs.

The following table sets forth a summary of the change in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

During the three months ended June 30, 2026 and 2025, the Company recorded a gain of $43,000 and $1,130,000, respectively, related to the change in fair value of the derivative liability which is recorded in other income (expense), net on the unaudited condensed consolidated statements of operations.

During the six months ended June 30, 2026 and 2025, the Company recorded a gain of $37,000 and $2,661,000, respectively, related to the change in fair value of the derivative liability which is recorded in other income (expense), net on the unaudited condensed consolidated statements of operations.

The Company estimated the $89,000 and $19,000 fair value of the bifurcated embedded derivative at June 30, 2026 and December 31, 2025, respectively, using a Monte Carlo simulation model, with the following inputs:

The Company measures the anti-dilution liability associated with the Series J Preferred Stock at fair value on a recurring basis (see Note 8. Stockholders’ Equity). The liability is classified within Level 3 of the fair value hierarchy because the valuation incorporates significant unobservable inputs, including the number of potential shares issuable under the anti-dilution provisions, the $50 million cap on cash issuances, and the outstanding options, warrants and preferred stock.

During the three and six months ended June 30, 2026, the Company recorded a loss of $8,044,334 related to the change in fair value of the anti-dilution liability, which is recorded in other income (expense), net on the unaudited condensed consolidated statements of operations.

The valuation of the Company’s Level 3 financial instruments is inherently subjective, as it requires the use of significant unobservable inputs. Changes in these inputs could result in materially different fair value measurements. In particular, increases in the Company’s stock price, expected volatility, or expected term, as well as decreases in the discount rate or probability of default, would generally result in a higher fair value of the derivative and warrant liabilities, while decreases in these inputs would generally result in a lower fair value. The Company evaluates the sensitivity of its fair value measurements to changes in significant unobservable inputs as part of its valuation process.

NOTE 12. SEGMENT REPORTING

The Company currently operates asone operating segment, which is also the sole reportable segment. The Company’s CODM is its Chief Executive Officer and Principal Executive Officer, who assess performance and makes all resource allocation decisions based on consolidated net income (loss).

The CODM does not review discrete financial information or separate performance metrics for any individual business activity and all decisions are made based on consolidated results. The measure of segment assets is consolidated total assets as presented on the consolidated balance sheets.

During the quarter ended June 30, 2026, the Company initiated a strategic transformation to the design and development of fabless semiconductor technologies for AI data center infrastructure. The Company’s single operating segment now derives its activities principally from these semiconductor development activities, including the joint development arrangement with Kopin Corporation described in Note 16. Commitments and Contingencies. During 2025, the Company had initiated a digital asset treasury strategy associated with the stablecoin ecosystem. The Company disposed of all of its digital asset holdings during the quarter ended June 30, 2026, and does not intend to develop this strategy further (see Note 7. Digital Assets). During the quarter ended June 30, 2026, the Company also sold the assets associated with its electric vehicle operations (see Note 15. Sale of Legacy Electric Vehicle Assets).

These changes affected the nature of the business activities conducted within the Company’s single operating segment but did not change the Company’s basis of segmentation or the composition of its reportable segment. The CODM continued to assess performance and allocate resources on a consolidated basis throughout all periods presented, and there were no changes from the last annual report in the basis of segmentation or in the measure of segment profit or loss. Accordingly, prior-period segment information has not been recast.

In addition to the significant expense categories included within net loss presented on the Company’s Condensed Consolidated Statements of Operations, see below for disaggregated amounts that comprise consulting and personnel expenses:

Other income (expense) segment items for the three and six months ended June 30, 2026, were $(9,152,955) and $(9,866,375), respectively, and consist primarily of changes in fair value on digital assets, changes in fair value of derivative and warrant liabilities, and interest expense.

NOTE 13. LEASES

During the fiscal year ended December 31, 2025, the Company entered into a sublease arrangement with a third party for the remaining term of the head lease, as the underlying facility was no longer being utilized due to the pause in the Company’s electric vehicle manufacturing operations. The sublease term does not extend beyond the noncancelable period of the head lease. There have been no material changes to the Company’s lease arrangements since December 31, 2025.

The following table summarizes sublease income for the three and six months ended June 30, 2026 and 2025:

NOTE 14. RELATED-PARTY TRANSACTIONS

Gilbert Villarreal, the former president of the Company’s subsidiary, Ayro Operating Company, Inc. (“AYRO Operating”), through GLV Ventures and Electric Power, entities owned and controlled by Mr. Villarreal, has been providing consulting services to the Company in connection with the reengineering of the Company’s Vanish at a rate of $30,000 per month. During the three months ended June 30, 2026, Mr. Villarreal relinquished his role as president of Ayro Operating, and accordingly the Company ceased incurring related-party transactions with his controlled entities as of that time. No related-party transactions occurred during the three months ended June 30, 2026, and no amounts were due to related parties as of June 30, 2026. In addition to the compensation paid to Mr. Villarreal as president of AYRO Operating, see below for related-party incurred expenses and liabilities:

Related-Party Incurred Expenses

Related-Party Liabilities

NOTE 15. SALE OF LEGACY ELECTRIC VEHICLE ASSETS

The Company’s operating subsidiary, AYRO Operating Company, Inc., historically designed, manufactured, and sold compact, sustainable electric vehicles (the “Legacy EV Business”). Operations of the Legacy EV Business ceased during 2025, the related long-lived assets had previously been written down to a carrying value zero. On June 11, 2026, AYRO Operating Company, Inc. entered into an Asset Purchase Agreement to sell substantially all of the tangible and intangible assets used in the Legacy EV Business, including vehicle and parts inventory, intellectual property, engineering designs and technical data, production and fabrication equipment, vehicles, and office furnishings, for aggregate consideration of $250,000, consisting of $25,000 paid at closing and $112,500 payable on each of the six-month and twelve-month anniversaries of closing, plus the assumption by the buyer of certain liabilities related to the Legacy EV Business. Cash, receivables, EV batteries and battery packs, and certain other assets were excluded from the sale.

The Company recognized a gain of $218,803 on the sale, reflecting the. Consideration received, less transaction costs, given the assets’ carrying value of zero at the date of sale. The gain is included in gain on sale of assets within other income (expense), net in the unaudited condensed consolidated statement of operations. Because the Company operates as a single reportable segment, the Legacy EV Business is not presented separately for segment reporting purposes (see Note 12. Segment Reporting).

NOTE 16. COMMITMENTS AND CONTINGENCIES

Joint Development and License Agreement

On April 27, 2026, the Company entered into a Joint Development and License Agreement (the “JDA”) with Kopin Corporation, to collaborate on the development and commercialization of Kopin’s interface for GPU-to-GPU connectivity. Under the JDA, the Company has committed to pay Kopin up to $15,000,000 for the development of the Project Technology through achievement of a successful prototype demonstration (a “Successful Demo”), payable in installments under a time-based funding schedule. The Company has also agreed to maintain at least $5,000,000 of funds in a segregated account to cover development plan needs.

During the six months ended June 30, 2026, the Company made a nonrefundable advance payment of $5,000,000 to Kopin for future research and development services under the JDA. The advance has been capitalized and is included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheets, and is recognized as research and development expense as Kopin performs the related development services. As of June 30, 2026, the unamortized balance of the advance was $4,372,070. For the three and six months ended June 30, 2026, the Company recognized $669,892 in research and development expense related to the JDA.

In consideration for Kopin’s grant of the license to the project technology, the Company issued to Kopin shares of the Company’s Series J Convertible Preferred Stock. The Series J Convertible Preferred Stock is recorded in temporary equity (mezzanine equity), including a related anti-dilution liability, and is described further in Note 8. Stockholders’ Equity.

Following achievement of a Successful Demo, the parties have agreed to negotiate in good faith for one year toward a production plan for deployment of the project technology, which could require additional payments by the Company of approximately $15,000,000 to $25,000,000. This obligation is contingent on achievement of a Successful Demo and is not currently committed.

Supply Agreement

Concurrently with the JDA, the Company entered into a Commercial Supply Agreement (the “Supply Agreement”) with Kopin under which Kopin appointed the Company as the exclusive seller of any products incorporating the project technology to end users worldwide (subject to certain exceptions). The Company is required to purchase its entire requirements for such products from Kopin, subject to certain exceptions, for an initial term of four years with automatic one-year renewal periods unless either party provides notice of non-renewal.

The Company does not believe it is probable that a liability has been incurred in connection with the JDA or Supply Agreement as of June 30, 2026, and no amounts have been accrued. Should the Company fail to fulfill its funding or other obligations under the JDA or Supply Agreement, it could be required to assign its rights in the project technology to Kopin or have other obligations accelerate, which could be material.

NOTE 17. INCOME TAXES

No income tax benefit was recognized on losses incurred during the three and six months ended June 30, 2026 and 2025 due to the Company’s full valuation allowance position against deferred tax assets.

NOTE 18. SUBSEQUENT EVENTS

On August 14, 2026, the Company entered into a consulting agreement with Michael Murray (the “Murray Consulting Agreement”), pursuant to which Mr. Murray will serve as Chairman of the Joint Steering Committee (the “JSC”) established by the JDA. Mr. Murray is the Chief Executive Officer of Kopin Corporation, a holder of 19.9% of the Company’s equity through Series J Convertible Preferred Stock and the Company’s counterparty under the JDA and Supply Agreement. As Chairman of the JSC and pursuant to the terms of the Murray Consulting Agreement, Mr. Murray will provide executive-level guidance on technology strategy, product innovation, market opportunities and ecosystem development, contributions to the recruiting of other steering committee members and offer advice on strategic investments while facilitating alignment among participating organizations. The Murray Consulting Agreement will remain effective for so long as the JDA remains in effect. Mr. Murray may resign as Chairman of the JSC and terminate the Murray Consulting Agreement upon not less than 60 days’ prior written notice.

Pursuant to the Murray Consulting Agreement and to incentivize Mr. Murray for his service as Chairman of the JSC, Mr. Murray will be granted stock options to purchase up to 1,716,564 shares of the Company’s Common Stock (the “Murray Options”), subject to the terms and conditions of the Company’s standard nonqualified stock option award agreement and the Company’s Long-Term Incentive Plan, as amended. The Murray Options have an exercise price of $2.75 per share, the closing price of the Company’s Common Stock on the date prior to the date of the effective date of the Murray Consulting Agreement, are subject to specific exercise requirements, and will vest in three equal installments on the first, second, and third annual anniversaries of the effective date of the Murray Consulting Agreement, provided that Mr. Murray is employed by or providing services to the Company through the applicable vesting date.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “anticipates,” “assumes,” “believes,” “can,” “could,” “estimates,” “expects,” “forecasts,” “guides,” “intends,” “is confident that,” “may,” “plans,” “seeks,” “projects,” “targets,” “would” and “will” or the negative of such terms or other variations on such terms or comparable terminology. Such forward-looking statements include, but are not limited to, future financial and operating results, the company’s plans, objectives, expectations and intentions, statements concerning the Company’s expectations regarding the development and commercialization of its fabless semiconductor technologies for AI data center infrastructure, the Company’s collaboration with the Kopin Corporation, and other statements that are not historical facts. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from our historical experience and our present expectations, or projections described under the sections in this Form 10-Q and our other reports filed with the SEC titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

For a more detailed discussion of other factors that may affect our business and that could cause our actual results to differ materially from those projected in these forward-looking statements, see the risk factors and uncertainties set forth in Part II, Item 1A of this Form 10-Q and in Part I, Item 1A of our Annual Report on Form 10-K as filed with the SEC on March 30, 2026. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise, except as required by law.