Item 1A. Risk Factors In addition to those the risk factors set forth in Part I Item 1A: Risk Factors in our Annual Report on Form 10-K for the year ended December, December 31, 2023, 2024, and other reports we filed with the SEC, below are certain risk factors related to the Company and its operations. Our level of indebtedness and significant debt service obligations could adversely affect our financial condition or our ability to fulfill our obligations, including the note issued in May 2023, and make it more difficult for us to fund our operations. As of September 30, 2024, March 31, 2025, we had $15.6 $10.5 million in principal of indebtedness outstanding, including $9.7 $5.2 million in principal amount of a convertible promissory note issued in July 2023. 2024 and the first quarter of 2025. We have very limited cash resources from which to repay any obligations that a lender requires to be paid in cash. Our level of indebtedness could have important negative consequences to you and us, including: we may have difficulty satisfying our obligations with respect to our outstanding notes and debt obligations; we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes; we will need to use a substantial portion of our available cash flow to pay interest and principal on our debt (including our currently outstanding notes and the additional notes offered hereby), which will reduce the amount of money available to finance our operations and other business activities; our debt level increases our vulnerability to general economic downturns and adverse industry conditions; our debt level could limit our flexibility in planning for, or reacting to, changes in our business and in our industry in general; certain of our debt obligations are secured by Company assets, and upon a default, of which there are several in existence as a result of the restatements discussed elsewhere in this Form 10-Q and failure to timely file this Form 10-Q, a lender may be able to seek to seize, control or otherwise monetize those assets to satisfy our debt obligations; our leverage could place us at a competitive disadvantage compared to our competitors that have less debt; and our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, may require us to maintain specified financial ratios and will limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects. Our ability to meet our payment obligations under our debt instruments depends on our ability to generate significant cash flows or obtain external financing in the future. And, in certain cases our debt obligations may be satisfied by way of a conversion into our common stock, and therefore, our ability to satisfy certain debt obligations is dependent, in part, on the performance of our common stock. In each case, to some extent this is subject to market, economic, financial, competitive, legislative, and regulatory factors as well as other factors that are beyond our control. There can be no assurance that our business will generate cash flow from operations, or that additional capital will be available to us, in amounts sufficient to enable us to meet our debt payment obligations and to fund other liquidity needs. Additionally, events and circumstances may occur which would cause us to not be able to satisfy applicable draw-down conditions and utilize additional funds under the securities purchase agreement entered into in May 2023. 2023 and amended and restated in July 2024. If we are unable to generate sufficient cash flows, or the value of our common stock is insufficient to facilitate conversions of debt obligations as may be necessary to service our debt payment obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital. If we are unable to implement one or more of these alternatives, we may be unable to meet our debt payment obligations, which could have a material adverse effect on our business, results of operations, or financial condition. 52 49 Despite our existing level of indebtedness, we may incur more indebtedness. This could further exacerbate the risks described above, including our ability to service our existing indebtedness. We may be able to incur substantial additional indebtedness in the future. Although certain of our debt arrangements contain restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of qualifications and exceptions, and under certain circumstances indebtedness incurred in compliance with such restrictions could be substantial. To the extent new debt is added to our current debt levels, the risks described above would increase. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. Our ability to make payments on and to refinance our indebtedness, including our outstanding notes, and to fund intended research and development efforts will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business when or if our operations will ultimately generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule or that future borrowings or another source of liquidity will be available to us u in an amount sufficient to enable us to pay our obligations, or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to fund our debt service obligations, or we are unable to identify and execute on another source of outside liquidity, we may be forced to reduce or delay capital expenditures, sell material assets or operations, attempt to obtain additional equity capital or refinance all or a portion of our indebtedness, including the 2023 Convertible Note, on or before maturity. In the absence of such operating results and resources, we could face substantial cash flow problems and might be required to sell material assets or operations to meet our debt service and other obligations. We cannot assure you as to the timing of such asset sales or the proceeds which we could realize from such sales and we cannot assure you that we will be able to refinance any of our indebtedness, including amounts owed under the securities purchase agreement entered into in May 2023, 2023 and amended and restated in July 2024, on commercially reasonable terms or at all. Because there are outstanding notes, obligations and warrants convertible into a significant number of shares of our common stock, holders of our common stock could be subject to significant dilution. We have funded various of our operations through convertible debt obligations. From time to time we have also issued a number of shares and warrants to acquire services and assets from third parties. To the extent that our debt obligations are satisfied by way of conversions conversions, and we issue additional shares of our common stock to satisfy obligations or in consideration for assets or services these issuances would have a dilutive effect on our existing stockholders. Because of alternate conversion price notices from our principal noteholder, there may be significant dilution. Between March 4, 2024 and March 8, 2024, our principal noteholder sent Alternate Conversion Notices to the Company to convert the principal value and accrued and unpaid interest under its Note with the Company into shares of Company common stock pursuant to the Alternate Conversion Price mechanism in the Note. The Company is currently evaluating the situation and working with the noteholder to arrive at an equitable resolution. If not resolved, an issuance of shares could result in significant dilution. 50