13. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements, except as noted below:

Merger Agreement

On June 22, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Black Pearl Equities II, LLC, a New York limited liability company (“Purchaser”), and Tortuga Acquisition Sub, Inc., a Utah corporation and a wholly owned subsidiary of Purchaser (“Merger Sub”), pursuant to which, among other things, Purchaser has agreed to cause Merger Sub to make a cash tender offer (the “Offer”) to purchase any and all of the outstanding shares of the Company’s common stock, par value $0.05 per share (the “Shares”), at a purchase price of $5.75 per Share in cash (the “Offer Price”). Black Pearl Equities, LLC, a New York limited liability company, is the sole member of Purchaser (“Parent”).

Merger Sub’s obligation to accept for payment and pay for Shares pursuant to the Offer is subject to various conditions, including (a) a nonwaivable condition (the “Minimum Tender Condition”) that there be validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares that, when added to the Shares, if any, already owned by Parent and its subsidiaries, would represent at least seventy percent (70%) of all then outstanding Shares, (b) Shares held by stockholders that have properly exercised appraisal rights under Utah law shall not have exceeded fifteen percent (15%) of the Shares outstanding immediately prior to the Acceptance Time (as defined in the Merger Agreement), (c) the Company shall have demonstrated to the reasonable satisfaction of Purchaser that the aggregate unrestricted cash held by the Company and its subsidiaries is at least $6,800,000 (excluding amounts held in escrow, which amounts held in escrow shall not be less than $2,880,000), (d) the Company shall have demonstrated to the reasonable satisfaction of Purchaser that the Company and its subsidiaries have good, valid and marketable fee simple title to all of their owned real property, free and clear of all liens other than specified permitted encumbrances, (e) the Required OK Approvals (as defined in the Merger Agreement) shall have been obtained, and (f) other customary conditions. There is no financing condition to the obligations to consummate the Offer.

The Merger Agreement further provides that upon the terms and subject to the conditions set forth therein, following completion of the Offer, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and as a wholly owned subsidiary of Purchaser (the “Merger”). Pursuant to the terms of the Merger Agreement, the Company has granted to Merger Sub an irrevocable option (the “Top-Up Option”) to purchase up to that number of newly-issued Shares that, when added to the number of Shares held by Purchaser and its affiliates, would constitute one Share more than ninety percent (90%) of the total outstanding Shares. Accordingly, the Merger will be governed by Section 16-10a-1104 of the Utah Revised Business Corporation Act (the “Utah Code”), with no vote of the Company’s stockholders required to consummate the Merger. In the Merger, each outstanding Share (other than Shares held by the Company or any of its subsidiaries, Purchaser or Merger Sub or held by stockholders who are entitled to demand, and who properly demand, appraisal rights under Utah law), will be converted into the right to receive cash in an amount equal to the Offer Price, without interest.

The board of directors of the Company (the “Company Board”) has unanimously (a) determined and declared that the Merger Agreement and the transactions contemplated by the Merger Agreement (including the Offer and the Merger) are, on the terms and subject to the conditions set forth in the Merger Agreement, advisable and in the best interests of and are fair to the Company and its stockholders, (b) approved, adopted and authorized in all respects the Merger Agreement and the transactions contemplated by the Merger Agreement (including the Offer and the Merger), (c) recommended that the stockholders of the Company accept the Offer and tender their Shares pursuant to the Offer, and (d) resolved that the Merger shall be effected under Section 16-10a-1104 of the Utah Code and that the Merger shall be consummated as soon as practicable following the acceptance of Shares for payment pursuant to the Offer.

The Merger Agreement includes customary representations, warranties and covenants of the Company, Purchaser and Merger Sub, including, among other things, a covenant of the Company not to solicit alternative transactions or to provide information or enter into discussions in connection with alternative transactions, subject to certain exceptions to allow the Company Board to exercise its fiduciary duties. The Merger Agreement may be terminated under certain circumstances, including in connection with superior proposals as set forth therein. If the Company terminates the Merger Agreement to enter into an agreement for a superior proposal and in other specified circumstances, the Company would be required to pay Purchaser a $400,000 termination fee. If Purchaser fails to consummate the transaction under specified circumstances in which it is required to do so, then Purchaser would be required to pay to the Company a $400,000 termination fee.

Preferred Stock

Subsequent to June 30, 2026, the Company discovered that there had been a technical defect under Utah state law in connection with its issuance of shares of Series A Convertible Preferred Stock which occurred many years ago. The effect of that defect has rendered that preferred stock issuance invalid. The Board has determined that the impact of that invalidation on the Company’s financial statements, in the aggregate, was not material.

Effective August 10, 2026, the Company redeemed all remaining outstanding shares of Series D Convertible Preferred stock at a redemption price equal to their Stated Value plus accrued and unpaid dividends.