Streamex Corp.: Form 10-Q for the period ended Jun 30, 2025

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management’s current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of our management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions. Factors that could cause differences include, but are not limited to, expected market demand for our products, fluctuations in pricing for materials, and competition.

Business Overview

On May 28, 2025, BioSig Technologies, Inc. (“BioSig” or the “Company”) completed its acquisition of Streamex Exchange Corporation (“Streamex”). As a result, the financial results for the three months ended June 30, 2025 include the full operations of BioSig and its wholly and majority-owned subsidiaries, as well as approximately five weeks of operations from the acquired Streamex business.

BioSig is a medical device technology company focused on developing and commercializing advanced digital signal processing solutions for electrophysiology. The Company’s flagship product, the PURE EP™ Platform (“PURE EP™”), is designed to deliver real-time, high-fidelity cardiac signal data to electrophysiologists during ablation procedures for the treatment of cardiovascular arrhythmias.

The PURE EP™ Platform enables the acquisition of raw intracardiac signals with minimal noise and interference, supporting improved procedural outcomes and clinical decision-making. By preserving the integrity of complex cardiac signals, PURE EP™ is intended to enhance workflow efficiency and support the treatment of challenging arrhythmias, including ventricular tachycardia (VT) and atrial fibrillation (AF).

In recent quarters, BioSig has shifted its strategic focus from commercial hardware distribution to the research and development of proprietary software algorithms. These algorithms aim to advance the understanding of cardiac tissue characteristics and ablation mechanisms. Data collection efforts began in December 2023 and remain ongoing. A key area of focus is improving the specificity and long-term outcomes of pulsed field ablation (PFA), a rapidly adopted technique in electrophysiology.

As of June 30, 2025, BioSig’s intellectual property portfolio includes:

• 41 issued or allowed utility patents, of which 29 list BioSig as at least one of the applicants;
• 31 pending U.S. and foreign utility patent applications, jointly or solely filed by BioSig and Mayo Foundation for Medical Education and Research (“Mayo”);
• 1 issued U.S. patent and 1 pending U.S. application related to artificial intelligence (AI);
• 30 issued worldwide design patents, covering display screens and graphical user interfaces for biomedical signal visualization;
• 12 issued/allowed patents and 9 pending applications licensed from Mayo, primarily directed to electroporation and stimulation technologies.

Through the acquisition of Streamex, BioSig has expanded its strategic focus to include digital infrastructure for the tokenization and exchange of real-world assets (“RWAs”), with an initial emphasis on gold-backed financial products. Streamex is developing a blockchain-based platform designed to facilitate the compliant issuance, trading, and custody of tokenized commodities and structured digital securities.

As of the reporting date, Streamex remains in the development stage and is pre-revenue. The Company is actively building out the platform’s architecture, regulatory framework, and strategic partnerships. Revenue-generating activities are expected to commence upon the launch of Streamex’s tokenized gold financing product, which is currently under development.

Results of Operations (000’s)

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research and development and commercialization efforts, the timing and outcome of future regulatory submissions and uncertainty around the current pandemic. Due to these uncertainties, accurate predictions of future operations are difficult or impossible to make.

Three Months Ended June 30, 2025 Compared to Three Months June 30, 2024 (000’s)

Revenues and Cost of Goods Sold. Revenue for the three months ended June 30, 2025 and 2024 was $0 and $13, respectively, and comprised of recognized service revenue.

We derive our revenue primarily from the sale of our medical device, PURE EP™ Platform, as well as related support and maintenance services and software upgrades in connection with the device.

Research and Development Expenses. Research and development expenses for the three months ended June 30, 2025 were $19, a decrease of $323, or 94%, from $342 for the three months ended June 30, 2024. The decrease is primarily due to decreases in payroll, Data/AI development and research and clinical studies and design work for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. These reductions reflect a strategic shift in resource allocation during the quarter, as the Company prioritized efforts toward closing the Streamex acquisition. As a result, certain R&D initiatives were temporarily paused or scaled back to support transaction-related activities, including due diligence, integration planning, and executive bandwidth reallocation.

Research and development expenses were comprised of the following:

Three months ended:

General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2025 were $19,792, an increase of $14,878 or 303%, from $4,914 incurred in the three months ended June 30, 2024. This increase is primarily due to an increase in stock-based compensation and professional fees consisting of legal, accounting and third-party consulting related to the acquisition of Streamex in the current period compared to the prior period. Stock-based compensation was $12.1 million in the current period and made up approximately 61% of the general and administrative expense during the current period as compared to $4.3 million in the prior period. The increase in stock-based compensation is due to the first amendment to the executive employment agreement with Mr. Amato in connection with the Streamex acquisition and paying third party consultants with stock in connection with the Streamex acquisition. Additionally, the Company also recognized $6.0 million related to the finders fee in connection with the Streamex acquisition.

Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended June 30, 2025 totaled $554, an increase of $505, or 1031%, over the expense of $49 incurred in the three months ended June 30, 2024, as a direct result of the amortization of the intangible assets recognized from the acquisition of Streamex.

Other Income (Expense). Other income (expense) for the three months ended June 30, 2025 totaled $3, a decrease in other income of $1,384, over the income of $1,381 incurred in the three months ended June 30, 2024, as a direct result of our gain on settlement and extinguishment of accounts payable negotiated by management during the prior period.

Preferred Stock Dividend. Preferred stock dividend for the three months ended June 30, 2025 and 2024 totaled $2 and $3, respectively. Preferred stock dividends are related to the dividends accrued on our Series C Preferred Stock issued during the period from 2013 through 2015.

Net Loss Attributable to BioSig Technologies, Inc. Common Shareholders. As a result of the foregoing, net loss attributable to common shareholders for the three months ended June 30, 2025 was $20,374 compared to a net loss of $3,918 for the three months ended June 30, 2024.

Six Months Ended June 30, 2025 Compared to Six Months June 30, 2024 (000’s)

Revenues and Cost of Goods Sold. Revenue for the six months ended June 30, 2025 and 2024 was $0 and $27, respectively, and comprised of recognized service revenue.

We derive our revenue primarily from the sale of our medical device, PURE EP™ Platform, as well as related support and maintenance services and software upgrades in connection with the device.

Research and Development Expenses. Research and development expenses for the six months ended June 30, 2025 were $25, a decrease of $555, or 96%, from $580 for the six months ended June 30, 2024. The decrease is primarily due to decreases in payroll, Data/AI development and research and clinical studies and design work for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. These reductions reflect a strategic shift in resource allocation during the quarter, as the Company prioritized efforts toward closing the Streamex acquisition. As a result, certain R&D initiatives were temporarily paused or scaled back to support transaction-related activities, including due diligence, integration planning, and executive bandwidth reallocation.

Research and development expenses were comprised of the following:

Six months ended:

General and Administrative Expenses. General and administrative expenses for the six months ended June 30, 2025 were $22,748 an increase of $14,952 or 192%, from $7,796 incurred in the six months ended June 30, 2024. This increase is primarily due to an increase in stock-based compensation and professional fees consisting of legal, accounting and third-party consulting related to the acquisition of Streamex in the current period compared to the prior period. Stock-based compensation was $14.2 million in the current period and made up approximately 62% of the general and administrative expense during the current period as compared to $5.4 million in the prior period. The increase in stock-based compensation is due to the first amendment to the executive employment agreement contract with Mr. Amato in connection with the Streamex acquisition and paying third party consultants with stock in connection with the Streamex acquisition. Additionally, the Company also recognized $6.0 million related to the finders fee in connection with the Streamex acquisition.

Impairment of Long Term Assets. For the six months ended June 30, 2025, the Company determined that no events or changes in circumstances existed that would indicate any impairment of its long-lived assets. During the six months ended June 30, 2024, the Company re-assessed it’s carrying amounts of certain property and equipment due to reduced manufacturing of its commercial products and determined that these carrying amounts exceeded the estimated undiscounted future cash flows. Accordingly, the Company recorded a $253 impairment charge to current operations.

Depreciation and Amortization Expense. Depreciation and amortization expense for the six months ended June 30, 2025 totaled $577, an increase of $450, or 354%, over the expense of $127 incurred in the six months ended June 30, 2024, as a direct result of the amortization of the intangible assets recognized from the acquisition of Streamex.

Other Income (Expense). Other income (expense) for the six months ended June 30, 2025 totaled $181, a decrease in other income of $1,222, over the income of $1,403 incurred in the six months ended June 30, 2024, as a direct result of our gain on settlement and extinguishment of accounts payable negotiated by management during the prior period.

Preferred Stock Dividend. Preferred stock dividend for the six months ended June 30, 2025 and 2024 totaled $(5) and $(5), respectively. Preferred stock dividends are related to the dividends accrued on our Series C Preferred Stock issued during the period from 2013 through 2015. In addition, the Series C Preferred stock conversion rate reset from $2.50 to $0.5302 in during the six months ended June 30, 2024, therefore we recorded a noncash deemed preferred stock dividend of $133 in the prior period.

Net Loss Attributable to BioSig Technologies, Inc. Common Shareholders. As a result of the foregoing, net loss attributable to common shareholders for the six months ended June 30, 2025 was $23,190 compared to a net loss of $7,455 for the six months ended June 30, 2024.

Segment Results

Operating Operating segments are defined as components of an enterprise for which discrete financial information is available and regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”) in assessing performance and allocating resources, in accordance with ASC 280, Segment Reporting.

On May 28, 2025, the Company appointed Henry McPhie, former CEO of Streamex Exchange Corporation, as its new CEO and Chairman of the Board of Directors, thereby designating him as the Company’s CODM. Following this leadership change and the acquisition of Streamex, the Company re-evaluated its internal reporting structure and the financial information reviewed by the CODM.

Based on this assessment, the CODM continues to evaluate the Company’s financial performance and make resource allocation decisions on a consolidated basis. The CODM reviews total revenues, total expenses, and expenses by functional classification across the entire enterprise, rather than by discrete business units. This approach reflects the integrated nature of the Company’s operations and the centralized management of its resources.

As a result, the Company has determined that it operates in one reportable and operating segment. This segment includes the Company’s legacy medical device operations, including the PURE EP™ Platform, as well as the development-stage activities related to the Streamex digital asset infrastructure business.

The Company will continue to monitor its internal reporting structure and the information reviewed by the CODM and will update its segment disclosures as necessary to reflect any changes in how the business is managed.

The Summary Statement of Operations and Comprehensive Loss for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, is detailed in Note 15 of the accompanying unaudited condensed consolidated financial statements.

Liquidity and Capital Resources and Going Concern ($000’s)

As of June 30, 2025, we had a working capital deficit of $110 million.

For the six months ended June 30, 2025, we used $2.39 million of cash in operating activities and provided $366 of cash in investing activities.

For the six months ended June 30, 2025, cash provided by financing activities totaled $4,700, comprised of proceeds from the sale of our common stock and warrants of $818 and proceeds from sale of common stock under the-at-the-marketing offering of $3,882.

As of June 30, 2025, we had an accumulated deficit of $278,529, a net loss attributable to BioSig Technologies, Inc. Common Shareholders of $23,190 and continued negative cash flows from operations. In addition, the Company does not currently have sufficient cash or committed financing to fund its operations for the twelve months following the issuance of this Form 10-Q. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

We expect to continue incurring operating losses and negative cash flows until our products, primarily the PURE EP™ Platform, achieve sustained commercial success. While we have commercial products available for sale, we have not yet generated significant revenue, and there is no assurance that future revenues will be sufficient to fund operations.

Additionally, our recently acquired Streamex business is in the development stage and has not yet generated revenue. We expect to incur additional costs related to platform development, regulatory compliance, and strategic partnerships before revenue-generating activities commence.

Our ability to continue as a going concern is dependent on securing additional financing. We are actively exploring various funding sources, including:

• Public or private equity offerings
• Strategic partnerships or licensing arrangements
• Government grants or non-dilutive funding
• Debt financing, where feasible

We have implemented cost-saving measures to reduce our operating expenses, including reductions in executive compensation, workforce, and reliance on external consultants. These actions are intended to lower our cash burn rate and extend our operating runway. However, there can be no assurance that these measures will be sufficient or that we will be successful in obtaining the necessary funding.

Series C Preferred Stock Redemption Risk

Our Series C Preferred Stock includes triggering events that may require redemption at the option of the holders. These include:

• Redemption in cash at the greater of (i) 120% of the $1 stated value or (ii) the product of the variable weighted average price of our common stock and the stated value divided by the then-current conversion price; or
• Redemption in common stock, calculated as the redemption amount divided by 75%.

As of June 30, 2025, the aggregate stated value of our Series C Preferred Stock was $105. Triggering events include, among others, judgments exceeding $100,000 or the initiation of bankruptcy proceedings. If such events occur, we may be required to redeem the Series C Preferred Stock, which could result in a significant liquidity obligation that we may not be able to satisfy. Unpaid redemption amounts accrue interest at a rate of up to 18% per annum or the maximum rate permitted by law.

Future Capital Requirements and Risks

We expect to continue incurring expenses related to:

• Commercialization of the PURE EP™ Platform
• Research and development of new product candidates
• Clinical trials and regulatory activities
• Expansion of business infrastructure and public company compliance
• Integration and scaling of Streamex’s tokenization platform and digital asset infrastructure
• Development of real-world asset (RWA) tokenization solutions, including commodities-on-chain initiatives

Our future capital requirements will depend on several factors, including:

• Progress and results of our R&D programs
• Timing and outcome of regulatory approvals
• Costs associated with intellectual property protection
• Market acceptance and commercialization success
• Availability of financing and strategic partnerships
• Execution of Streamex’s growth strategy within the global commodities and digital asset markets
• Infrastructure and personnel investments required to support Streamex’s platform scalability and compliance

On July 7, 2025, the Company entered into two financing agreements to support its long-term capital needs: (i) a Senior Secured Convertible Debenture Purchase Agreement with YA II PN, Ltd. (“Yorkville”), pursuant to which the Company may issue up to $100 million in convertible debentures, and (ii) a Standby Equity Purchase Agreement (“SEPA”) with an institutional investor, allowing the Company to sell up to $1 billion of common stock over a 36-month period.

On August 13, 2025, the Company amended the agreement to revise the structure of the transaction. Under the amended terms, Yorkville will purchase two secured convertible debentures, each in the principal amount of $25 million. Additional secured convertible debentures totaling up to $50 million may be issued upon mutual agreement of the parties, at their sole discretion. The purchase price for each debenture remains 96% of its face value. The Convertible Debentures are convertible into shares of the Company’s common stock, subject to shareholder approval and customary closing conditions. The amendment also sets a floor price for conversions at 20% of the Nasdaq Official Closing Price immediately prior to the original agreement date.

Both agreements are subject to customary closing conditions, including stockholder approval and, in the case of the SEPA, the effectiveness of a registration statement. The Company may not access proceeds under the SEPA until any issued debentures have been repaid or converted, unless waived by the investor.

These financing arrangements are part of management’s broader strategy to address liquidity needs and support commercialization, R&D, and infrastructure expansion. However, there can be no assurance that the conditions to closing will be satisfied or that funding will be available on acceptable terms.

Future financing may include the issuance of equity or debt securities, credit facilities, or other arrangements. Any such financing could result in dilution to existing shareholders or the issuance of securities with rights senior to those of our common stock. Market volatility and macroeconomic conditions may also adversely affect our ability to raise capital on acceptable terms.

If we are unable to obtain sufficient funding, we may be required to delay, reduce, or eliminate our research and development programs, scale back commercialization efforts, or enter into strategic arrangements that may require us to relinquish rights to certain technologies or products.

The Company’s liquidity forecast includes assumptions regarding the timing of Streamex’s product launch, expected capital inflows, and cost containment measures. A sensitivity analysis indicates that delays in product commercialization or capital raising could materially impact the Company’s ability to continue as a going concern.

Equity Financing

On March 5, 2025, the Company entered into a securities purchase agreement with certain accredited investors pursuant to which the Company sold to the Investors an aggregate of 758,514 shares Common Stock at a purchase price of $1.07974 per share, and warrants to purchase up to 758,514 shares of Common Stock at an exercise price of $0.95474 per share, that will become exercisable six months after the date of issuance and will expire three and one-half years following the date of issuance, in exchange for aggregate consideration of $818,998.

August 2025 Public Offering

On August 15, 2025, the Company completed a public offering of 3,852,149 shares of its common stock at a public offering price of $3.90 per share, generating gross proceeds of approximately $15.0 million before deducting underwriting discounts, commissions, and estimated offering expenses. Net proceeds from the offering were approximately $13.62 million.

ATM Sales Agreement

For the six months ended June 30, 2025, the Company has sold 4,403,166 At The Market Offering Shares at an average offering price of $0.91 per share for aggregate gross proceeds of $4,019,063 or $3,882,420 net of fees of $136,643.

Critical Accounting Estimates

We prepare our unaudited condensed consolidated financial statements in accordance with GAAP, which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. These estimates are based on historical experience, current conditions, and other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates, and such differences could have a significant impact on our financial condition or results of operations.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.

As of June 30, 2025, the following accounting estimates are considered critical:

Valuation of Exchangeable Shares (Derivative Liability)

Nature of Estimate: The Exchangeable Shares issued in connection with the Streamex acquisition are classified as a derivative liability under ASC 815 due to contingent conversion rights.

Methodology: Fair value is estimated using a discounted cash flow (DCF) model, incorporating projected Streamex cash flows, a 40.0% discount rate, and a 3.0% terminal growth rate. The valuation reflects Level 3 inputs due to the absence of observable market data.

Estimation Uncertainty: The valuation is highly sensitive to assumptions regarding Streamex’s future performance, regulatory milestones, and the timing and outcome of shareholder approval. These factors are inherently uncertain and subject to change.

Historical Accuracy and Changes: As of June 30, 2025, the fair value remained unchanged from initial recognition on May 28, 2025. No observable market inputs were available, and no exchanges occurred during the period.

Drivers of Variability: Key drivers include Streamex’s commercialization timeline, macroeconomic conditions, and investor sentiment.

Future Sensitivity: If shareholder approval is not obtained by November 28, 2025, the exchange ratio will adjust from 1.0 to 1.25, increasing the number of shares issuable and potentially requiring a material upward revision to the liability.

Purchase Price Allocation (PPA) for Streamex Acquisition

Nature of Estimate: The allocation of purchase consideration to identifiable assets and liabilities involves significant judgment, particularly for intangible assets and goodwill.

Methodology: We applied Level 3 valuation techniques under ASC 805, including the relief-from-royalty method for trade name, multi-period excess earnings method (MPEEM) for developed technology, and cost approach for legal and compliance framework.

Estimation Uncertainty: These valuations rely on unobservable inputs such as royalty rates (1%), discount rates (40%), and projected cash flows.

Historical Accuracy and Changes: The PPA remains preliminary as of June 30, 2025. No adjustments have been recorded during the measurement period.

Drivers of Variability: Finalization of Streamex’s financial forecasts, market comparables, and tax amortization benefits may materially affect the allocation.

Future Sensitivity: Adjustments to intangible asset values or recognition of contingent liabilities could materially impact goodwill and amortization expense.

For a detailed discussion of our significant accounting policies and related judgments, see Note 3 of the Notes to Unaudited Condensed Consolidated Financial Statements in “Item 1. Financial Statements” of this report.

Management’s evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s report on internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, as a process designed by, or under the supervision of, a company’s principal executive and principal financial officer and effected by the our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible enhancements to controls and procedures.

Management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2025, based on the criteria in a framework developed by the Company’s management pursuant to and in compliance with the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective as of June 30, 2025, because management identified that i) inadequate identification, recording and reporting of stock based compensation, ii) ineffective review processes over period end financial disclosure and reporting, (iii) inadequate segregation of duties for transaction posting and processing, amounted to a material weakness in the Company’s internal control over financial reporting. and (iv) ineffective review controls, over the accounting for business combinations and related financial instruments.

The material weaknesses did not result in any identified misstatements to the consolidated financial statements and there were no changes to previously released financial results.

Management’s Remediation Plan

In 2025, we have intents to add sufficient staff and oversight supervision controls to provide adequate accounting segregation. We believe these changes will remediate the underlying deficiencies as identified by us. The remediation efforts will include an ongoing review of the implementation of additional controls to ensure all risks have been addressed.

As a result of the material weaknesses discussed above or of others, we may experience negative impacts on our ability to accurately report our results of operation and financial condition in a timely manner. If we do identify a material weakness in our internal control over financial reporting and are unsuccessful in implementing or following a remediation plan, or fail to update our internal control over financial reporting as our business evolves or to integrate acquired businesses into our controls system, if additional material weaknesses are found in our internal controls in the future, or if our external auditors cannot attest to the effectiveness of our internal control over financial review, if applicable, we may not be able to timely or accurately report our financial condition, results of operations or cash flows or to maintain effective disclosure controls and procedures. If we are unable to report financial information in a timely and accurate manner or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, an inability for us to be accepted for listing on any national securities exchange in the near future, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our common stock. Further, there are inherent limitations to the effectiveness of any system of controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. We could face additional litigation exposure and a greater likelihood of an SEC enforcement or other regulatory action if further restatements were to occur or other accounting-related problems emerge.

The weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

Except for the identification of the material weakness related the ineffective review controls, over the accounting for business combinations and related financial instruments as discussed above, there has been no change in our internal control over financial reporting identified in connection with the evaluation referred to above that occurred during our last completed fiscal quarter that has materially negatively affected, or is reasonably likely to materially affect, our internal control over financial reporting. As discussed above, management intends to implement remediation plans in 2025.

In addition to the other information contained elsewhere in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on April 15, 2025, as well as the risk factors set forth in our Current Report on Form 8-K/A filed with the SEC on July 21, 2025 and in our Definitive Proxy Statement on Schedule 14A filed with the SEC on August 4, 2025.