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ITEM 1A. RISK FACTORS
We are subject to a number of risks that if realized could adversely affect our business, strategies, prospects, financial condition, results of operations and cash flows. The full seAs a result of risk factors are set forth in Item 1A. Risk Factors in our Annual Report on Form 10-K filed on April 30, 2025 the issuance of the 10.0% Notes, the restatement of our previously issued financial statements, and the receipt of a Nasdaq Delisting Notice, we are subject to the additional risks and uncertainties summarized below. In addition to the risk factors set forth below and in our the other information set forth in this Quarterly Report on Form 10-Q fo, you should carefully consider the period ended March 30, 2025risk factors set forth in Item 1A. Risk Factors in our Annual Report on Form 10-K filed on May 19April 14, 20256. Please carefully consider all of the information in this Quarterly Report, our Annual Report on Form 10-K filed on April 3014, 20256, and our the disclosures in this Quarterly Report on Form 10-Q filed on May 19, 2025 (including, without limitatincluded in Note 1 Organization Liquidity and going concern of the notes to the financial statements contained in this Quarterly Report and Managements Discussion and Analysis of Financial Condition and Results of Operations Liquidity and capital resources section, of this Quarterly Report), our othe full set of risks set forth in Item 1A. Rr Quarterly Reports on Form 10-Q and in our other filings with the Securities and Exchange Commission before making an investment decision regarding us.
Our 10.0% Notes are secured obligations, and there are risk Factors ofs associated with our 10.0% Notes that could adversely affect our Annual Report on Form 10-K filed business and financial condition.*
On April 21, 2026, the Company entered into note purchase agreements in connection with a private offering of $41.0 million Aaggregate pril 30, ncipal amount of 10.0% Notes. Subsequently, in May 2025, and 6, the disCompany closures in this Quarterly Report ed on an incremental $5.0 million private placement of these notes, bringing the total aggregate princluded in Notipal amount of the 10.0% Notes issued to $46.0 million. The indenture for the 1(b) Organization Liquidity 0.0% Notes (the Indenture) includes customary covenants and sets forth certain events of default after which the 10.0% Notes may be declared immediately due and going concernpayable and sets forth certain types of bankruptcy or insolvency events of tdefault involving the nCompany after which the Notes to become automatically due and payable, which include the finollowing:
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| certain payment defaults on the 10.0% Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period); |
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| failure by the Company to comply with its obligation to convert the 10.0% Notes in accordance with the Indenture upon exercise of a holders conversion right; |
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| the Companys failure to send certain notices under the Indenture within specified periods of time; |
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| the Companys failure to comply with certain covenants in the Indenture relating to the Companys ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; |
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| a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; |
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| certain defaults by the Company or any of its significant subsidiaries with respect to (y) the liens securing the Companys payment obligations under Siemens Settlement, or (z) indebtedness for borrowed money of at least $10.0 million; |
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| certain events of bankruptcy, insolvency or reorganization of the Company or any of the Companys significant subsidiaries; |
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| a final judgment or judgments for the payment of $10.0 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against the Company or any significant subsidiary, which judgment is not discharged, bonded, paid, waived or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished; |
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| any security interest and liens purported to be created by any collateral document, including the Security Agreement (as defined below), shall cease to be in full force and effect or shall cease to give the collateral agent, for the benefit of the holders of the 10.0% Notes, the liens, rights, powers and privileges purported to be created and granted under such collateral documents, subject to certain exceptions; and |
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| a guarantee with respect to the 10.0% Notes ceases to be in full force and effect or the Company or any guarantor denies or disaffirms its obligations under the Indenture or any guarantee with respect to the 10.0% Notes. |
If certancial stin bankruptcy and insolvency-relatemed events containof default occur with respect to the Company, the principal of, and accrued in this Quarterly Report and Managemeand unpaid interest, if any, on, all of the 10.0% Notes then outstanding shall automatically become due and payable.
Our ability to remain in compliance with the covenants under the 10.0% Notes depends on, among other things, our operating performance, competitive developments Discussion, financial market conditions and Analysis stock exchange listing of our common stock, all of Financial Condition and Results of Operwhich are significantly affected by financial, business, economic and other factors. We are not able to control many of these factors. Accordingly, our cash flow may not be sufficient to allow us to make required payments under the 10.0% Notes or meet our other obligations Liquidity and capital resources section of this Quarterly Report)thereunder.
If we are not able to satisfy our obligations under the 10.0% Notes, including compliance with the affirmative, negative and financial covenants applicable to the Company, or if there are events of defaults under the 10% Senior Secured Notes, the holders will have the right to foreclose on their first priority security interest relating to substantially all of our assets to the exclusion of our general unsecured creditors. If the holders of the 10% Senior Secured Notes pursue foreclosure, any such foreclosure would have a material and iadverse impact on our other filings business.
Our common stock faces delisting from Nasdaq if we fail to regain compliance with the Securities and Exchange Commission before makinminimum bid price requirement, which would severely harm its liquidity, trading price, and our ability to raise capital.
On July 21, 2026, we received a notice from Nasdaq indicating that we are not in compliance with the $1.00 minimum bid price requirement. We have until January 19, 2027, to regain compliance by maintaining an investment decision closing bid price of at least $1.00 for a minimum of ten consecutive business days. While we intend to actively monitor our stock price and evaluate options to cure this deficiency (including potentially implementing a reverse stock split), we cannot provide assurance that we will regarding us.
in compliance or maintain our listing.
If our common stock is delisted, it would likely trade on the OTC markets, which would:
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| Significantly reduce the trading liquidity and market price of our common stock; |
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| Subject our stock to restrictive penny stock rules, making transactions more difficult for brokers and investors; |
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| Limit our ability to issue additional securities or obtain future financing; and |
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| Constitute a Fundamental Change under our outstanding 10.0% Senior Secured Notes, which would permit holders to demand immediate repurchase of their notes, triggering a liquidity default. |
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