(17) Subsequent Events

Convertible Note Issuance

In May 2025, the Company issued a $10.0 million unsecured convertible promissory note (“Notes”) to an institutional investor under its shelf registration statement on Form S-3. The Notes will not bear interest except that upon the occurrence and during the continuance of an event of default, interest will accrue on the Notes at an interest rate of 13% per annum. Unless earlier converted or redeemed, the Notes will mature on the twenty-four month anniversary of the issuance date at a premium of 13% to the face value of the Notes (the “Redemption Value”). At any time after the issuance date, the Notes are convertible, in whole or in part, and subject to certain beneficial ownership limitations, at the option of the holders, into shares of our common stock at a conversion price equal to $0.68 (the “Fixed Conversion Price”). The Fixed Conversion Price is subject to customary adjustments upon any stock split, stock dividend, stock combination, recapitalization or similar events. Starting on the closing date, the Notes amortize in installments, and we will make monthly payments on the first trading day of each monthly anniversary commencing on the closing date through the maturity date, payable in cash or shares of common stock. Upon the satisfaction of certain conditions, we may prepay outstanding Notes upon not less than 20 trading days’ written notice by paying an amount equal to the portion of the Notes being redeemed at a 12.5% premium. The Notes will rank senior to the right to payment of the holders of our unsecured debt. Net proceeds will be used for working capital and general corporate purposes. As of July 21, 2025 approximately $2 million of the original $10.0 million of the Notes have been converted into common equity shares of the Company.

Tax Update

On July 4, 2025, the One Big Beautiful Bill was enacted, introducing significant and wide-ranging changes to the U.S. tax system. These include expanded deductions for certain expenses, the restoration of 100% bonus depreciation, expanded opportunity zones, and immediate expensing for U.S.-based research and development. The legislation also reinstates EBITDA-based interest deductions and makes several business tax incentives permanent.

The Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and cash flows. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.