Note 3 - Restatement of Consolidated Financial Statements

12 Months Ended

Dec. 31, 2025

NOTE 3. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

On April 27, 2026, the audit committee of the board of directors and management of the Company concluded that the Company’s previously issued audited consolidated financial statements for the year ended December 31, 2025, should no longer be relied upon because of an error in the Company’s accounting for certain outstanding common stock warrants, which are referred to as the October 2025 Pre-funded Warrants herein. The error relates to the determination of the number of shares of common stock issuable upon exercise of the October 2025 Pre-funded Warrants that were issued by the Company in October 2025, which contain certain anti-dilution adjustment provisions with respect to subsequent issuances of common stock by the Company related to the conversion of certain convertible securities. At the time of issuance, the October 2025 Pre-funded Warrants represented the right to purchase 1,081,082 shares of common stock at a per share exercise price of $0.05. In the Company’s Form 10-K for the year ended December 31, 2025, the Company did not correctly account for the impact of the anti-dilution adjustment provisions contained in the October 2025 Pre-Funded Warrants triggered by dilutive issuances of securities from the Series D Preferred and Series E Preferred conversion in October 2025. Specifically, the Company failed to correctly reflect both (i) the decrease in the exercise price of such warrants to $0.002385 per share, and (ii) the increase in the number of shares issuable upon the exercise of such warrants, each as required by the anti-dilution adjustment provisions. As a result of such provisions, the number of shares issuable upon the exercise of the October 2025 Pre-Funded Warrants increased to 22,664,040 shares in October 2025.

The cumulative effect of the restatement on the Company’s financial statements is a $608.6 million increase in the warrant liability balance as of December 31, 2025 and a $123.2 million loss on fair value of warrant liability in excess of proceeds at issuance and a $485.5 million increase in loss on changes in fair value of warrant liability for the year ended December 31, 2025. These adjustments are non-cash and do not impact the Company’s operating expenses, operating income, net cash flows or cash and cash equivalents as previously reported.

The effects of the restatement on the consolidated balance sheets are summarized in the following table:

	As of December 31, 2025
	As Originally Reported			Adjustments			As Restated
Warrant liabilities		30,432			608,639			639,071
Total liabilities		31,861			608,639			640,500

Accumulated deficit		(210,415	)		(608,639	)		(819,054	)
Total stockholders’ equity		(23,176	)		(608,639	)		(631,815	)

The effects of the restatement on the consolidated statements of operations and comprehensive income/loss are summarized in the following table:

	For the Year Ended December 31, 2025
	As Originally Reported			Adjustments			As Restated
Non-cash loss on changes in fair value of warrant liabilities		(24,486	)		(485,454	)		(509,940	)
Non-cash loss on fair value of warrant liability in excess of proceeds at issuance		—			(123,185	)		(123,185	)
Net income (loss) from continuing operations		(33,222	)		(608,639	)		(641,861	)
Net loss		(22,141	)		(608,639	)		(630,780	)
Net loss attributable to common stockholders	$	(22,141	)	$	(608,639	)	$	(630,780	)

Weighted-average shares of common stock used in computing net loss per share attributable to common stockholders (basic and diluted)		5,820			-			5,820

Basic and diluted net loss per share
Basic loss per share from continuing operations	$	(5.70	)	$	(104.58	)	$	(110.29	)
Basic earnings per share from discontinued operations		1.90			-			1.90
Basic (loss) earnings per share attributable to common stockholders	$	(3.80	)	$	(104.58	)	$	(108.39	)

The effects of the restatement on the consolidated statement of stockholders’ (deficit) equity are summarized in the following table:

	For the Year Ended December 31, 2025
	As Originally Reported			Adjustments			As Restated
Accumulated Deficit
Net loss	$	(22,141	)	$	(608,639	)	$	(630,780	)
Balance at December 31, 2025		(210,415	)		(608,639	)		(819,054	)

	For the Year Ended December 31, 2025
	As Originally Reported			Adjustments			As Restated
Total Stockholders' Equity (Deficit)
Net loss	$	(22,141	)	$	(608,639	)	$	(630,780	)
Balance at December 31, 2025		(23,176	)		(608,639	)		(631,815	)

The effects of the restatement on the consolidated statement of cash flows are summarized in the following table:

	For the Year Ended December 31, 2025
	As Originally Reported			Adjustments			As Restated
Operating activities:
Net loss	$	(22,141	)	$	(608,639	)	$	(630,780	)
Non-cash loss on changes in fair value of warrant liabilities		24,486			485,454			509,940
Non-cash loss on fair value of warrant liabilities in excess of proceeds at issuance		—			123,185			123,185