USBC, Inc.

Current report

Subsequent to filing our Form 10-K for the year ended September 30, 2024 and other filings with the Securities and Exchange Commission, there are additional and/or updated risks factors below that you should carefully consider as well as the risk factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K, as amended, for the year ended September 30, 2024 and the risk factors contained in our subsequent Quarterly Reports on Form 10-Q and any registration statements that we file with the Securities and Exchange Commission. We expect to update these Risk Factors from time to time in the periodic and current reports that we file with the Securities and Exchange Commission after the date of this Form 8-K.

Current report

Exhaustion of our authorized shares of Common Stock.

Current report

As of the date of this report, we have exhausted all of our authorized shares of Common Stock and are unable to issue any additional shares of Common Stock. The exhaustion of authorized shares presents significant risks, including but not limited to, affecting our ability to raise capital, meet contractual obligations under outstanding preferred stock and convertible debt agreements, maintain stock liquidity, avoid dilution concerns, comply with regulatory requirements, and execute strategic initiatives.

Current report

Until we are able to hold a meeting of stockholders to amend our Articles of Incorporation, as amended (“Articles”), and increase our authorized common shares, we may be unable to raise additional capital through equity and debt offerings, thereby limiting our capacity to finance operations, new projects, acquisitions, expansion initiatives, or meet our current obligations under our outstanding preferred stock and convertible debt agreements.

Current report

Because we have no remaining authorized shares of Common Stock left to issue, we must amend our articles of incorporation.

Current report

We are, and will continue to be, unable to issue more shares of our Common Stock without amending our articles of incorporation to increase the number authorized shares. This procedure will necessitate holding a special meeting of our stockholders to seek approval to amend our Articles in order to increase our authorized shares of Common Stock which can be both time-consuming and costly as we will need to file a Schedule 14A proxy statement. Furthermore, there is uncertainty as to whether our stockholders will approve amending our Articles because it could lead to concerns among our existing stockholders regarding potential dilution of their holdings, as increasing the number of authorized shares might reduce their ownership percentage and voting power.

Current report

Exhaustion of our authorized shares of Common Stock may negatively impact the liquidity of our Common Stock.

Current report

Because we have issued all of our authorized shares of Common Stock, the liquidity of our issued and outstanding shares of Common Stock may be adversely affected. With no shares of Common Stock available for issuance, the market supply of our Common Stock remains static at this time, which can lead to increased volatility and challenges for investors seeking to buy or sell shares of our Common Stock at desired prices. Reduced liquidity may also deter institutional investors and negatively impact our stock price.

Current report

The exercise and conversion prices of securities subject to price adjustments, including certain warrants, outstanding convertible notes payable and our preferred stock may require further adjustment.

Current report

If in the future we sell our common stock at a price below $9.60 per share, the conversion price of (i) the outstanding shares of Series C and D Convertible Preferred Stock; (ii) promissory notes convertible into shares of our common stock; and (iii) warrants to purchase shares of common stock would adjust below $9.60 per share. The Company has the option to repay Lind in cash or common stock. Should we make our monthly payments in common stock, there may be a price adjustment.

Current report

We owe Clayton A. Struve, a significant stockholder, $1,071,000 under convertible promissory or OID notes under convertible promissory or OID notes. Mr. Struve also holds shares of Series C and D Convertible Preferred Stock and warrants to purchase shares of common stock. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorize common stock.

Current report

We owe Ronald P. Erickson and J3E2A2Z, an entity affiliated controlled by Ronald P. Erickson $1,184,066 under convertible promissory notes. The potential repricing adjustments that these convertible securities are entitled to may not be permitted without increasing our authorized common stock.

Current report

We are currently in default ofour convertible note with Lind Global Fund II, LP.

Current report

We are currently in default of that certain senior convertible note issued to Lind Global Fund II, LP as the result of having exhausted our authorized common stock and we may be subject to further default. Upon the occurrence of any event of default, the notes will become immediately due and payable and the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of each note, in addition to any other remedies under the note or the other transaction documents. Events of default include, among others, the Company’s failure to make any note payment when due, a default in any indebtedness or adverse judgements in excess of $250,000, our failure to instruct its transfer agent to issue unlegended certificates, the Company’s shares of common stock no longer being public traded or listed on a national securities exchange, any stop order or trading suspension restricting the trading in our common stock, and our market capitalization is below $15 million for consecutive 10 days.

Current report

There is substantial doubt relating to our ability to continue as a going concern.

Current report

We have recurring net losses, which have resulted in an accumulated deficit of $147,037,000 as of March 31, 2025. At March 31, 2025, we had cash and cash equivalents of $444,000. We have concluded that these factors raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the March 31, 2025 financial statements. Now that we have exhausted our authorized shares of common stock, we will be unable to continue to seek to raise additional working capital through public equity, private equity or convertible debt financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, if at all.