NOTE 3 — LIQUIDITY AND GOING CONCERN

The accompanying unaudited condensed consolidated financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. They do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

For the six months ended June 30, 2026, the Company reported net loss of approximately $60.6 million and net cash outflows from operating activities of approximately $5.0 million. As of June 30, 2026, the Company had a working capital deficit of approximately $391.1 million and a stockholders’ deficit of approximately $373.4 million.

The Company is also exposed to legal and regulatory matters, as disclosed in Note 16, which may result in additional defense and settlement costs. Unfavorable outcomes could further strain the Company’s liquidity.

As of the date of issuance of these unaudited condensed consolidated financial statements, the Company has not repaid certain short-term loans, TFI Note, exchangeable notes and convertible promissory notes, all of which are past due and considered in default.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

The management of the Company has developed a funding plan intended to support the Company’s liquidity and enable it to meet its operating obligations as they fall due. Management continues to monitor the Company’s capital structure and operating plans and will evaluate available funding alternatives as needed. Details of the funding plan are as follows:

Management’s ability to execute its near-term funding plans and liquidity measures is important to the Company’s continued operation as a going concern. After considering the cash flow forecast, the funding initiatives under evaluation, management’s ability to defer or restructure certain obligations, and its ability to manage liquidity closely during the assessment period, management believes that the going concern basis of preparation remains appropriate. Management continues to monitor the Company’s liquidity position closely and update this assessment through the issuance of the accompanying unaudited condensed consolidated financial statements.

However, the Company cannot predict the exact amount or timing of the alternatives or guarantee those alternatives will be favorable to its stockholders. Any failure to obtain financing when required will have a material adverse impact on the Company’s business, operation and financial result.