In accordance with ASC Topic 205-40, the Company’s management evaluates whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of issuance of the financial statements included in this report. This evaluation includes considerations related to the Company’s forecasted liquidity and cash consumption requirements.

The Company has a history of net losses and negative operating cash flows and expects to continue to incur additional losses in the near future. Additionally, the Company previously defaulted on its Existing Second Lien Notes. As a result of these considerations, the Company’s liquidity may be insufficient to meet its obligations for at least one year from the date of issuance of the financial statements included in this report, and management has concluded that as of March 31, 2026, substantial doubt existed as to the Company’s ability to continue as a going concern.

Subsequent to the quarter ended March 31, 2026, on April 27, 2026, the Company entered into the Amended and Restated Transaction Support Agreement (the “A&R TSA”), which amended and restated the Transaction Support Agreement, dated as of March 20, 2026 (the “Original TSA”), among the Company and the supporting holders thereto. Management has analyzed and concluded that the successful execution of the A&R TSA, entry into the ABL Credit Facility, amendment of the Existing Indentures and entry into the 2027 PIK Notes Indenture have significantly improved the Company’s liquidity position and capital structure. Upon closing of these transactions, the Company incurred transaction-related cash payments, received funding associated with the ABL Credit Facility, and replaced the existing second lien cash interest obligations with a new financing structure. See Note 4 and Note 13 for more information regarding these transactions. Management reviewed a liquidity forecast, and the elimination of approximately $17 million of annual cash interest replaced by PIK Interest and the entry into the $35 million ABL Credit Facility with $15 million drawn upon closing were primary drivers of the Company’s improved liquidity position. The liquidity forecast projects sufficient liquidity through May 31, 2027 with no cash shortfalls. Therefore, as a result of the completion of these transactions and analysis of their impacts, management has concluded that its plans alleviate substantial doubt as to the Company’s ability to continue as a going concern for at least one year from the date these financial statements are issued.