Item 1A. Risk Factors As a smaller reporting company as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. However, we are voluntarily providing risk factor updates as described in this Item 1A. For our current risk factors relating to our operations, other than as set forth below, see the section entitled Risk Factors contained in our Annual Report. There Our management is substantial doubt about currently involved in litigation proceedings with one of our ability former directors who has brought claims against us for breach of contract and promissory fraud. If we were to continue as a going concern, receive an adverse ruling, it could materially and this may adversely affect our reputation, cause us to incur significant judgment or settlement costs in cash or equity securities, and adversely affect our stock price price. On March 19, 2026, David Mandel, a former member of our board of directors, filed a complaint against us, Nicolas Lin, our Chief Executive Officer and ability Chairman, and certain Doe defendants in the Superior Court of the State of California, County of Los Angeles, Case No. 26STCV08877. On April 24, 2026, we removed the action to raise capital. In connection with the preparation United States District Court for the Central District of California, Case No. 2:26-cv-04423. The complaint alleges breach of oral contract and promissory fraud based on allegations that we and Mr. Lin offered Mr. Mandel the position of our condensed consolidated financial statements Chief Executive Officer for a three-year term at an annual salary of $220,000 and an equity interest equal to 7.5% of our equity, vesting in tranches over a three-year period. Mr. Mandel seeks damages in excess of $11.46 million, punitive damages and such other relief as the three months ended court may deem appropriate. We believe the claims are without merit and intend to defend the action vigorously. Defending against Mr. Mandels legal action could cause us to incur significant expenses and consume large amounts of our managements time and attention. If Mr. Mandel were to prevail, an adverse ruling on such a claim could materially and adversely affect our reputation, cause us to incur significant judgment or settlement costs in cash or equity securities and could adversely affect our stock price. See the section above entitled Item 1. Legal Proceedings Mandel v. Aether Holdings, Inc., et. al. and the sections in our Annual Report on Form 10-K filed with the SEC on December 31, 17, 2025, management evaluated whether there were conditions entitled Business - Recent Developments - Dispute with Former Director and events, considered Business Recent Developments Removal of Director for additional information regarding the legal action, dispute and Mr. Mandels removal. Covenants and other provisions in the aggregate, that raise substantial doubt about Note Purchase Agreement with Streeterville Capital, LLC pursuant to which we issued a Secured Promissory Note may restrict our ability business and operations, and if we do not effectively manage our covenants, our financial condition and results of operations could be adversely affected. In addition, our operations may not provide sufficient cash to meet our the repayment obligations as they become due over of our debt incurred under the next twelve months from Note Purchase Agreement and the date of Secured Promissory Note. Pursuant to the issuance Note Purchase Agreement, we granted to Streeterville Capital, LLC a security interest in substantially all of our assets, including our intellectual property. If an event of default occurs under the Note Purchase Agreement, Streeterville Capital, LLC may foreclose on its security interest and liquidate some or all of these assets, which would harm our business, financial statements. Since inception we have incurred recurring losses condition and negative cash flows from operations, resulting results of operations. In the event of a default in an accumulated deficit connection with our bankruptcy, insolvency, liquidation, or reorganization, Streeterville Capital, LLC would have a prior right to substantially all of $6,495,444 as our assets to the exclusion of December 31, 2025. For our general unsecured creditors. Only after satisfying the three months ended December 31, 2025, we incurred a net loss claims of $1,297,237 Streeterville Capital, LLC and used cash any unsecured creditors would any amount be available for our equity holders. The pledge of these assets and other restrictions imposed in operating activities the Note Purchase Agreement may limit our flexibility in raising capital for other purposes. Because substantially all of $1,008,063. We intend our assets are pledged to fund operating costs over secure the next twelve months primarily through the use Note, our ability to incur additional indebtedness or to sell or dispose of remaining IPO proceeds and, assets to raise capital may be impaired, which could have an adverse effect on our financial flexibility. In addition, if necessary, through we are unable to comply with certain covenants in the Note Purchase Agreement, we may be limited in our business activities and access to credit or may default under the Note Purchase Agreement. Provisions in the Note and Note Purchase Agreement impose restrictions or require prior approval on our ability, and the ability of our subsidiaries to, among other things: incur additional financings from public debt; create liens or private offerings encumbrances; engage in certain fundamental transactions; conduct certain issuances of equity or and debt securities; and sell, transfer certain parts of our business or property, including equity interests of our securities. However, there can The Note Purchase Agreement also contains certain other covenants, which we may not be no assurance that such financing will be able to comply with in the future. Our failure to comply with these covenants may result in the declaration of an event of default, which, if not cured or waived, may result in the acceleration of our repayment obligations under the Note. If the maturity of our indebtedness is accelerated, we may not have sufficient funds available for repayment or we may not have the ability to borrow or obtain sufficient funds to replace the accelerated indebtedness on terms acceptable terms, to us or at all. The substantial doubt about our ability Our failure to continue as a going concern may adversely affect repay our obligations under the price Note would result in Streeterville Capital, LLC foreclosing on all or a portion of our common stock, may negatively impact relationships with third parties with whom we do business, and may negatively impact our ability assets, which could force us to raise capital and implement curtail or cease our business plan. operations.