As further described in Note 1, the Company was in default under its lease, and the Landlord was in the process of pursuing available remedies in advance of the lease term that would otherwise expire in June 2025. In April 2025, the Landlord obtained a default judgment against the Company in the amount of $409,278. The Landlord may exercise rights under the lease agreement and applicable law with respect to a lessee in default and such lessee’s assets located on the premises, including the removal and disposal of inventories and property and equipment remaining on the property. As such, as of March 31, 2025, the Company determined that, based on the assumption that the Landlord would fully exercise its rights with respect to all assets remaining on the premises, (i) it no longer had control over the inventory and that recovery was not probable, therefore, inventory was written down to a net realizable value of zero, (ii) the carrying value of its property and equipment, all of which was at the leased location, was no longer recoverable, and the assets were written down to a net book value of zero, and (iii) the right-of-use asset associated with this lease was fully impaired, as the Company could no longer use the leased premises, each of which is recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

Inventories, net as of March 31, 2025 and December 31, 2024 consisted of the following:


	March 31, 2025		December 31, 2024
Raw materials and supplies	$	—	$	1,913,013
Work-in-process		—		161,137
Finished goods		—		613,786
Inventories, gross		—		2,687,936
Less: inventory reserve		—		(1,161,469	)
Inventories, net	$	—	$	1,526,467

During the three months ended March 31, 2025 and 2024, the Company recorded net lower of cost or net realizable value charges of nil and $28,012, respectively. As of March 31, 2025, in connection with the lease default described above, inventory was written down to a net realizable value of zero through a $1,526,467 loss recorded within loss on impairment of inventories, property and equipment and operating lease right-of-use asset on the condensed consolidated statement of operations for the three months ended March 31, 2025.

Property and equipment, net as of March 31, 2025 and December 31, 2024 consisted of the following:


	March 31, 2025			December 31, 2024
Machinery and equipment	$	7,203,592		$	7,203,592
Leasehold improvements		897,948			897,948
Furniture and office equipment		205,897			205,897
Computer equipment and software		197,386			197,386
Property and equipment, gross		8,504,823			8,504,823
Less: accumulated depreciation and amortization		(4,116,543	)		(3,670,094	)
Less: impairment of property and equipment		(4,388,280	)		—
Property and equipment, net	$	—		$	4,834,729

Depreciation and amortization expense related to property and equipment was $446,449 and $256,895 during the three months ended March 31, 2025 and 2024, respectively.

Prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 consisted of the following:


	March 31, 2025		December 31, 2024
Prepaid insurance	$	168,063	$	123,959
Other prepaid assets		160,623		28,521
Other current assets		51,850		10,269
Total prepaid expenses and other current assets	$	380,536	$	162,749

Accrued expenses as of March 31, 2025 and December 31, 2024 consisted of the following:


	March 31, 2025		December 31, 2024

Accrued legal, accounting and professional fees	$	2,648,037	$	2,448,594
Accrued transaction costs related to the reverse recapitalization		503,599		503,600
Accrued payroll and benefits		341,956		357,953
Accrued lease-related payables		289,558		54,288
Accrued taxes payable		269,147		232,966
Accrued interest		40,325		560,501
Other		210,020		143,293
Total accrued expenses	$	4,302,642	$	4,301,195