Note 2 – Liquidity and Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a cumulative net loss from inception to June 30, 2026 of approximately $29 million. The accompanying financial statements for the three months ended June 30, 2026 have been prepared assuming the Company will continue as a going concern. Existing cash resources and cash expected to be generated from operations are not expected to be sufficient to fund the Company’s anticipated operating requirements over the next twelve months without additional financing.

The ability of the Company to continue as a going concern is dependent on the Company having adequate capital to fund its operating plan and performance. Management’s plans to continue as a going concern include raising additional capital , including through a potential registered offering of equity securities, as well as borrowings, continuing to focus on attaining profitable operations, and exploring alternative funding sources on an as needed basis. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The supply chain challenges, inflationary pressures and tariffs have impacted on the Company’s business operations to some extent and is expected to continue to do so and these impacts may include reduced access to capital. The ability of the Company to continue as a going concern may be dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s primary sources of liquidity have traditionally been comprised of cash and cash equivalents as well as availability under a Credit Agreement. The Credit Agreement with Line Financial, as most recently amended in September 2025, includes a revolving credit facility for up to $7 million and a term loan of $0.7 million, all supported by the majority of our assets. This Agreement was extended during September 2025, to mature April 30, 2027, under substantially similar terms.