FWBI First Wave Biopharma, Inc. - 10-K

ITEM 1A. RISK FACTORS

We are subject to numerous risks and uncertainties that could materially adversely affect our business, financial condition, results of operations and the value of our securities. The risks described below are not the only risks we face. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, may also materially adversely affect us. If any of the following risks occur, our business, financial condition, results of operations and prospects could be materially harmed, and the trading price of our Common Stock could decline, potentially causing investors to lose all or part of their investment.

Summary of Risk Factors

An investment in our securities involves a high degree of risk. The principal risks relating to our business and securities include the following:

Our current dependency on external funding for our operations raises a substantial doubt about our ability to continue as a going concern.

Our level of indebtedness and our ability to make payments on or service our indebtedness could adversely affect our business, financial condition, results of operations, cash flow and liquidity.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product candidate development programs, testing efforts or other operations.

Additional offerings in the future may dilute then existing stockholders’ percentage ownership of our Company.

We experienced significant board and management turnover during the fourth quarter of 2025, and instability in governance and leadership could adversely affect our business.

We are a clinical stage biopharmaceutical company and have a limited operating history upon which to base an investment decision.

We will face intense competition and may not be able to compete successfully.

We may incur substantial product liability or indemnification claims relating to the use of our product candidates.

We may use biological materials and may use hazardous materials, and any claims relating to improper handling, storage or disposal of these materials could be time consuming or costly.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations.

Adverse global conditions, including economic uncertainty, may negatively impact our financial results.

Significant disruptions of information technology systems or breaches of data security could materially adversely affect our business, results of operations and financial condition.

Requirements associated with being a public company will increase our costs significantly and will divert significant company resources and management attention.

We operate as a clinical stage biopharmaceutical company with relation to our retained biopharmaceutical assets but have a limited operating history upon which to base an investment decision.

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Our product candidates are at an early stage of development and may not be successfully developed or commercialized.

Any product candidates we advance into and through clinical development are subject to extensive regulation, which can be costly and time consuming, cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Because the results of preclinical studies and early clinical trials are not necessarily predictive of future results, any product candidate we advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval.

Any product candidate we advance into and through clinical trials may cause unacceptable adverse events or have other properties that may delay or prevent their regulatory approval, limit the commercial profile of the approved labeling, or result in significant negative consequences following marketing approval, if any.

Delays in the commencement or completion of our clinical trials could result in increased costs and delay our ability to pursue regulatory approval and commercialization of our product candidates.

We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the trials are not well designed.

The approval processes of regulatory authorities are lengthy, time consuming, expensive and inherently unpredictable.

If we are unable to execute our sales and marketing strategy for our products and are unable to gain market acceptance, we may be unable to generate sufficient revenue to sustain our business.

We are an early-stage operating company in our GridAI business with a limited operating history, and our ability to execute our business plan depends on successful customer deployments, integration with third-party systems, and scaling of our platform and personnel.

Our near-term revenue from our GridAI business may depend on a limited number of customers, projects, or counterparties, and the loss, delay, or failure to convert pilot programs or letters of intent into long-term commercial agreements could materially adversely affect our financial condition and results of operations.

Our GridAI platform depends on interoperability with third-party hardware, software, and energy market systems, and disruptions or limitations in such third-party systems could impair our ability to deliver services.

Our GridAI platform relies on data inputs, forecasting models, and optimization algorithms that may be subject to error or incomplete information, and actual performance may differ from expected results, which could adversely affect customer relationships and our reputation.

The markets in which our GridAI business operates are highly competitive, and we face competition from established energy, software, and industrial companies with greater resources, which could adversely affect our ability to grow and maintain market share.

Our GridAI business operates in complex and evolving regulatory environments, including energy markets and infrastructure regulations, and changes in such regulations could adversely affect our business and the value of our solutions.

Our ability to successfully commercialize our GridAI platform depends on continued adoption of artificial intelligence and energy optimization technologies, which are rapidly evolving and inherently uncertain.

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We may require additional capital to fund the development and growth of our GridAI business, and there can be no assurance that such capital will be available on acceptable terms, or at all.

Any failure of our information technology systems or those of third parties, or any cybersecurity incident, could materially adversely affect our GridAI operations, customer relationships, and reputation.

If we accept digital assets, including stablecoins, as consideration in our transactions, we may be subject to volatility, regulatory uncertainty and accounting complexity, which could adversely affect our financial results and operations.

Risks Related to Our Business, Financial Position and Capital Requirements

Our current dependency on external funding for our operations raises a substantial doubt about our ability to continue as a going concern. If we do not continue as a going concern, investors could lose their entire investment.

The accompanying consolidated financial statements have been prepared as if we will continue as a going concern. We have incurred significant operating losses and negative cash flows from operations since inception. On December 31, 2025, we had cash and cash equivalents of approximately $0.9 million, and an accumulated deficit of approximately $208.8 million. We have incurred recurring losses, have experienced recurring negative operating cash flows, and require significant cash resources to execute our business plans. Based on cash on hand at December 31, 2025 and the available loan proceeds and assuming successful financing efforts, which we cannot guarantee, we anticipate having sufficient cash to fund planned operations for the next several months. Historically, our major sources of cash have been comprised of proceeds from various public and private offerings of its capital stock. Although our business changed significantly during 2025 through the acquisition of Grid AI Corp. and the completion of the ImmunogenX rescission transaction, we are dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute our development plans and continue operations.

We have been, and are expected to continue, exploring various potential strategies available including but not limited to raising capital, restructuring our indebtedness and identifying and evaluating potential strategic alternatives but there can be no assurance that these efforts will be successful, that the Company will be able to raise necessary capital on acceptable terms, reach agreement with lenders, or that the strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. We are evaluating all potential strategic options, including a merger, reverse merger, sale, wind-down, liquidation and dissolution or other strategic transaction. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stakeholder value or that it will make any cash distributions to stockholders. Any failure in these efforts could force us to delay, limit or terminate operations, make reductions in our workforce, discontinue research and development programs, liquidate all or a portion of assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code.

Without adequate working capital, we may not be able to meet our obligations and continue as a going concern. These conditions raise substantial doubt about our ability to continue as a going concern one year from the date these financial statements are issued. If the Company is not able to obtain necessary capital, we may be required to terminate operations, liquidate all or a portion of assets and/or seek bankruptcy protection. As a result, we have concluded that our plans at this stage do not alleviate substantial doubt about the ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our level of indebtedness and our ability to make payments on or service our indebtedness could adversely affect our business, financial condition, results of operations, cash flow and liquidity.

Effective January 31, 2025, we entered into the Revolving Loan Agreement. Pursuant to and under the terms of the Revolving Loan Agreement, we issued to the Lender a revolving note dated January 27, 2025 in the principal amount of $2,000,000. Out of the principal amount, the Lender disbursed an initial loan amount of $550,000 to the Company on January 31, 2025.

The Revolving Note bears interest at the rate of 18% per annum calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on January 31, 2025 until paid in full. The outstanding principal balance, all accrued and unpaid interest and all other amounts, costs, expenses and/or liquidated damages are due in full on January 31, 2026. The Revolving Loan Agreement contains customary events of default. As of April 1, 2026, the Company was in default under the

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Revolving Loan Agreement as a result of its failure to repay amounts due at maturity, and the lender has issued a demand for repayment of the outstanding amounts.

If we are not able to repay or refinance our debt as it becomes due, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional debt or equity on terms that may be onerous or highly dilutive, if we can obtain it at all. If we raise equity through the issuance of preferred stock, the terms of the preferred stock may give the holders rights, preferences and privileges senior to those of holders of our Common Stock, particularly in the event of liquidation. Our ability to arrange financing or refinancing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. We cannot assure you that we will be able to obtain financing or refinancing on terms acceptable to us or at all.

If funds are not available when needed, or available on acceptable terms, we may be required to delay, scale back or eliminate some of our obligations. In addition, we may not be able to grow market share, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which could negatively impact our business, operating results and financial condition.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product candidate development programs, testing efforts or other operations, including.

We expect our expenses to increase in connection with our ongoing activities, including with connection to the operating of Grid AI Corp. and AMPX. We also expect to incur significant expenses related to the development, testing, and manufacturing of our product candidates. We cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our products. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any potential future commercialization efforts.

We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a result of many factors, including costs required to advance Adrulipase, the pace of commercialization and development of the Grid AI Corp. and AMPX platform, as well as factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially government funding, collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from its day-to-day activities, which may adversely affect our ability to develop our product candidates.

Our future capital requirements will depend on many factors, including:

the costs and timing of manufacturing for our product candidates;

the costs associated with hiring additional personnel and consultants as our research and development activities increase;

operating and integrating the Grid AI Corp. and AMPX business and

the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements.

Additional offerings in the future may dilute then existing stockholders’ percentage ownership of our Company.

Given our plans and expectations that we will need additional capital, in the near future we may need to issue additional Common Stock or securities convertible or exercisable for Common Stock, including convertible preferred shares, convertible notes, stock options or warrants.

In particular, the September 30, 2025 Grid AI Corp. transaction included the issuance of Series H Non-Voting Convertible Preferred Stock that is convertible, subject to conditions, into a substantial number of shares of Common Stock. We also have outstanding warrants and other equity-linked instruments, and we granted equity awards to management and directors in late 2025 and early 2026.

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These instruments may significantly dilute existing stockholders, both economically and voting-wise, if converted, exercised or settled in shares.

The issuance of additional securities in the future will dilute the percentage ownership of then existing stockholders. Additionally, sales by existing stockholders of a large number of our Common Stock in the public market could also affect the market price of our Common Stock.

We experienced significant board and management turnover during the fourth quarter of 2025, and instability in governance and leadership could adversely affect our business.

In late 2025, we underwent significant governance and leadership changes, including board resignations, changes in board composition, a new Chief Executive Officer arrangement, a new Interim Chief Financial Officer and new equity awards to management and directors. One director resignation was accompanied by stated disagreements regarding governance, diligence and disclosure matters.

These events could adversely affect us by:

disrupting strategic execution

weakening internal controls or disclosure controls

diverting management attention

increasing legal, accounting and administrative burden

impairing our ability to recruit, retain and motivate qualified personnel

damaging confidence among investors, business partners, regulators, auditors and other stakeholders.

If we are unable to maintain stable and effective leadership, our business and reporting quality may be adversely affected.

Disruptions in the global economy and supply chains may have a material adverse effect on our business, financial condition and results of operations.

Our operations are subject to risks arising from global economic conditions, supply chain disruptions and volatility in energy markets. These risks may affect the availability, cost and timing of components, infrastructure and third-party services required to support the development and deployment of our energy orchestration platform and related technologies.

Global supply chains have experienced significant disruption in recent years, and ongoing geopolitical conflicts, trade tensions, inflationary pressures and macroeconomic uncertainty continue to impact market conditions. In particular, disruptions affecting the energy sector, data center infrastructure and related equipment could adversely affect our ability to scale our platform, deliver services to customers and execute our business strategy.

In addition, inflationary pressures and volatility in labor, technology and infrastructure costs may increase our operating expenses and reduce our financial flexibility. Any such disruptions or adverse developments could materially and adversely affect our business, financial condition and results of operations.

Adverse global conditions, including economic uncertainty, may negatively impact our financial results.

Global conditions, dislocations in the financial markets, any negative financial impacts affecting United States as a result of tax reform or changes to existing trade agreements or tax conventions, may adversely impact our business.

In addition, the global macroeconomic environment could be negatively affected by, among other things, pandemics or epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the

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global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the Russian invasion of Ukraine, conflicts in the Middle East, and foreign governmental debt concerns. Such challenges have caused, and may continue to cause, uncertainty and instability in local economies and in global financial markets.

Acceptance of digital assets, including stablecoins, as consideration in our transactions may expose us to volatility, regulatory uncertainty and accounting complexity, which could adversely affect our financial results.

We are evaluating the planned acceptance of stablecoins and other digital assets as a form of consideration in certain future transactions. The use of digital assets may expose us to risks, including potential fluctuations in value, even for assets intended to maintain a stable value, as well as risks related to cybersecurity, custody, and reliance on third-party platforms and infrastructure. In addition, the regulatory environment for digital assets continues to evolve, and changes in laws, regulations, or interpretations by regulatory authorities could affect our ability to accept or use such assets or impose additional compliance obligations.

The accounting treatment of digital assets under U.S. GAAP is complex and subject to interpretation. Certain digital assets may be required to be measured at fair value with changes recognized in earnings, which could introduce volatility into our financial results. Other digital assets may be accounted for as indefinite-lived intangible assets and subject to impairment testing, which could result in non-cash impairment charges. Although we did not hold any digital assets as of December 31, 2025, if we elect to accept or hold such assets in the future, these risks could adversely affect our financial condition and results of operations.

Geopolitical risks associated with Russia’s invasion of Ukraine and conflicts in the Middle East, including the U.S. and Israel war with Iran, could result in increased market volatility and uncertainty, which could negatively impact our business, financial condition, and results of operations.

The uncertain nature, scope, magnitude, and duration of hostilities stemming from Russia’s military invasion of Ukraine and conflicts in the Middle East, including the U.S. and Israel war with Iran, including the potential effects of such hostilities as well as sanctions, embargoes, asset freezes, cyber-attacks and other actions taken in response to such hostilities on the world economy and markets, have disrupted global markets and contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic and other factors that affect our business and supply chain. There can be no certainty regarding the impacts stemming from the invasion, including the imposition of additional sanctions, embargoes, asset freezes or other economic or military measures resulting from the invasion. The impact of these developments, and additional events that may occur as a result, is currently unknown and could adversely affect our business, supply chain, suppliers and customers and potential customers. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, the availability and cost of materials, supplies, labor, currency exchange rates and financial markets, all of which could negatively impact our business, financial condition and results of operations.

Significant disruptions of information technology systems or breaches of data security could materially adversely affect our business, results of operations and financial condition.

We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. We have established physical, electronic and organizational measures to safeguard and secure our systems to prevent a data compromise, and rely on commercially available systems, software, tools, and monitoring to provide security for our information technology systems and the processing, transmission and storage of digital information. We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information. Our internal information technology systems and infrastructure, and those of our current and any future collaborators, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property. The

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costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Moreover, if a computer security breach affects our systems or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged.

In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Clinical Health Act of 2009, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.

Under the EU regulation and notably the General Data Protection Regulation, or GDPR, No. 2016/679, which entered into force on May 25, 2018 and is applicable personal data that we process in relation to our presence in the EU, the offering of products or services to individuals in the EU or the monitoring of the behavior of individuals in the EU, we have also a legal responsibility to report personal data breaches to the competent supervisory authority. The EU data protection regulation includes a broad definition and a short deadline for the notification of personal data breaches, which may be difficult to implement in practice and requires that we implement robust internal processes. Under this regulation, we have to report personal data breaches to the competent supervisory authority within 72 hours of the time we become aware of a breach “unless the personal data breach is unlikely to result in a risk to the right and freedoms of natural persons” (Article 33 of the GDPR). In addition, the GDPR requires that we communicate the breach to the Data Subject if the breach is “likely to result in a high risk to the rights and freedoms of natural persons” (Article 34 of the GDPR). In order to fulfil these requirements, we have to implement specific internal processes to be followed in case of a personal data breach, which will allow us to (a) contain and recover the breach, (b) assess the risk to the data subjects, (c) notify, and possibly communicate the breach to the data subjects, (d) investigate and respond to the breach. The performance of these processes implies substantial costs in resources and time.

Moreover, as we may rely on third parties that will also process as processor the data for which we are a data controller—for example, in the context of the manufacturing of our product candidates or for the conduct of clinical trials, we must contractually ensure that strict security measures, as well as appropriate obligations including an obligation to report in due delay any security incident are implemented, in order to allow us fulfilling our own regulatory requirements.

We would also be exposed to a risk of loss or litigation and potential liability for any security breach on personal data for which we are data controller. The costs of above-mentioned processes together with legal penalties, possible compensation for damages and any resulting lawsuits arising from a breach may be extensive and may have a negative impact on reputation and materially adversely affect our business, results of operations and financial condition.

Requirements associated with being a public company will increase our costs significantly and will divert significant company resources and management attention.

Since we are no longer an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, we are no longer able to take advantage of certain exemptions from various reporting requirements that were previously available to us, but which were not available to other public companies that are not emerging growth companies. Accordingly, we will be required to comply with increased disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, we will incur greater expenses associated with such reporting requirements. These expenses would further increase if we ceased to be a “smaller reporting company.” In addition, if we are deemed an accelerated filer or large accelerated filer in the future, we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We have not yet completed the process of compiling the system and processing documentation needed to comply with such requirements. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion when required to do so. In that regard, we currently do not have an internal audit function, and we will need to hire or contract additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

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Our management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we may incur as a result of this.

Risks Related to our Biopharmaceutical Operation, Clinical Development, Regulatory Approval and Commercialization

We operate as a clinical stage biopharmaceutical company with relation to our retained biopharmaceutical assets but have a limited operating history upon which to base an investment decision.

We operate as a clinical stage biopharmaceutical company with relation to our retained biopharmaceutical assets. Following the completion of the ImmunogenX rescission transaction on December 31, 2025, our retained legacy biopharmaceutical focus is primarily Adrulipase. Adrulipase is in the early stages of clinical development. We have not generated any revenue from product sales and have incurred significant net losses. We have not demonstrated our ability to perform the functions necessary for the successful commercialization of any product candidates. The successful commercialization of any of our products will require us to perform a variety of functions, including:

continuing to undertake pre-clinical development and clinical trials;

participating in regulatory approval processes;

formulating and manufacturing products; and

conducting sales and marketing activities.

Our operations to date have been limited to organizing and staffing, acquiring, developing and securing the proprietary rights for, and undertaking pre-clinical development, manufacturing and clinical trials of Adrulipase. These operations provide a limited basis for our stockholders and prospective investors to assess our ability to complete development of or commercialize Adrulipase or any other product candidates and the advisability of investing in our securities.

We have incurred significant losses and negative cash flows from our operations since inception. As of December 31, 2025, we had accumulated deficit of approximately $208.8 million and negative working capital of approximately $12.6 million. Based on our historical and anticipated rate of cash expenditures, we do not anticipate our existing working capital will be sufficient to sustain our business through the commercialization of our product candidates. Therefore, we are dependent on obtaining, and are continuing to pursue, the necessary funding from outside sources, including obtaining additional funding from the sale of securities in order to continue our operations. We are actively working to obtain additional funding. We cannot make any assurances that additional financings will be available to us and, if available, completed on a timely basis, on acceptable terms or at all. If we are unable to complete an equity and/or debt offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations, which would likely cause the price of our Common Stock to decline or ultimately force us to cease our operations.

The development and regulatory approval process take several years, and it is not likely that any such products, even if successfully developed and approved by the FDA or any comparable foreign regulatory authority, would be commercially available for a significant period of time. Many promising drug candidates fail at some stage of their clinical development. Accordingly, even if we are able to obtain the requisite financing to fund our development programs, we cannot assure you that our product candidates will be successfully developed, receive required regulatory approvals and successfully commercialized. Our failure to develop, manufacture or receive regulatory approval for or successfully commercialize any of our product candidates, could result in the failure of our business and a loss of all of your investment in our company.

We will face intense competition and may not be able to compete successfully.

We operate in highly competitive segments of the biotechnology and biopharmaceutical markets. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies, and private and public research institutions. Adrulipase, if successfully developed and approved, will compete with established therapies, as well as new treatments that may be introduced by our competitors. Many of our competitors have significantly greater financial, product development, manufacturing and marketing resources than us. Large pharmaceutical companies have extensive experience in clinical testing and obtaining regulatory approval for drugs. We also may compete with these organizations to recruit

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management, scientists and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. New developments, including the development of other biological and pharmaceutical technologies and methods of treating disease, occur in the pharmaceutical and life sciences industries at a rapid pace. Developments by competitors may render our product candidates obsolete or noncompetitive. We will also face competition from these third parties in recruiting and retaining qualified personnel, establishing clinical trial sites and patient registration for clinical trials and in identifying and in-licensing new product candidates.

We may incur substantial product liability or indemnification claims relating to the use of our product candidates.

We face an inherent risk of product liability exposure based on the use of Adrulipase in human clinical trials, or, if obtained, following marketing approval and commercialization. Claims could be brought against us if use or misuse of one of our product candidates causes, or merely appears to have caused, personal injury or death. Although we have and intend to maintain product liability insurance relating to our clinical trials, our coverage may not be sufficient to cover claims that may be made against us and we may be unable to maintain such insurance. Any claims against us, regardless of their merit, could severely harm our financial condition, strain our management and other resources or destroy the prospects for commercialization of the product which is the subject of any such claim. We are unable to predict if we will be able to obtain or maintain product liability insurance for any products that may be approved for marketing. Additionally, we have entered into various agreements where we indemnify third parties for certain claims relating to the testing and use of our product candidates. These indemnification obligations may require us to pay significant sums of money for claims that are covered by these indemnifications.

We cannot predict all of the possible harms or side effects that may result from the use of our products and, therefore, the amount of insurance coverage we currently hold, or that we or our collaborators may obtain, may not be adequate to protect us from any claims arising from the use of our products that are beyond the limit of our insurance coverage. If we cannot protect against potential liability claims, we or our collaborators may find it difficult or impossible to commercialize our products, and we may not be able to renew or increase our insurance coverage on reasonable terms, if at all. The marketing, sale and use of our products and our planned future products could lead to the filing of product liability claims against us if someone alleges that our products failed to perform as designed. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend.

Any product liability or professional liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage. Additionally, any product liability lawsuit could damage our reputation, result in the recall of products, or cause current partners to terminate existing agreements and potential partners to seek other partners, any of which could impact our results of operations.

We may use biological materials and may use hazardous materials, and any claims relating to improper handling, storage or disposal of these materials could be time consuming or costly.

We may use hazardous materials, including chemicals and biological agents and compounds, that could be dangerous to human health and safety or the environment. Our operations also produce hazardous waste products. Federal, state and local laws and regulations govern the use, generation, manufacture, storage, handling and disposal of these materials and wastes. Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our product development efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. We do not carry specific biological or hazardous waste insurance coverage and our property and casualty, and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended.

Although we maintain workers’ compensation insurance to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.

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We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of December 31, 2025, we had 18 full-time employees. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, research and development, sales, marketing, financial and other personnel. Future growth would impose significant added responsibilities on members of management, including:

identifying, recruiting, integrating, maintaining and motivating additional employees;

managing our internal development efforts effectively, including the clinical, FDA and international regulatory review process for our product candidates, while complying with our contractual obligations to contractors and other third parties; and

improving our operational, financial and management controls, reporting systems and procedures.

Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants to provide certain services, including certain aspects of regulatory approval, clinical management and manufacturing. There can be no assurance that the services of independent organizations, advisors and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants and contractors or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

Any product candidates we advance into and through clinical development are subject to extensive regulation, which can be costly and time consuming, cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable health authorities in foreign markets, including Health Canada’s Therapeutic Products Directorate, or the TPD, and the European Medicines Agency, or the EMA. In the United States, we are not permitted to market our product candidates until we receive approval of an NDA (New Drug Application) or BLA (Biologic License Application) from the FDA. The process of obtaining such approval is expensive, often takes many years and can vary substantially based upon the type, complexity and novelty of the products involved. In addition to the significant clinical testing requirements, our ability to obtain marketing approval for these product candidates depends on obtaining the final results of required non-clinical testing, including characterization of the manufactured components of our product candidates and validation of our manufacturing processes. The FDA may determine that our product manufacturing processes, testing procedures or facilities are insufficient to justify approval. Approval policies or regulations may change, and the FDA has substantial discretion in the pharmaceutical approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed.

The FDA, the TPD and/or the EMA can delay, limit or deny approval of a product candidate for many reasons, including, but not limited to:

disagreement with the design or implementation of our clinical trials;

failure to demonstrate to their satisfaction that a product candidate is safe and effective for any indication;

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failure to accept clinical data from trials which are conducted outside their jurisdiction;

the results of clinical trials may not meet the level of statistical significance required for approval;

we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

such agencies may disagree with our interpretation of data from preclinical studies or clinical trials;

failure to approve the manufacturing processes or facilities of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; or

changes in the approval policies or regulations of such agencies may significantly change in a manner rendering our clinical data insufficient for approval.

Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us from commercializing our product candidates.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. The enrollment of patients depends on many factors, including:

the patient eligibility criteria defined in the protocol;

the size of the patient population;

the proximity and availability of clinical trial sites for prospective patients;

the design of the trial;

our ability to recruit clinical trial investigators with the appropriate competencies and experience;

the availability of other clinical trials and competition for eligible patients;

our ability to obtain and maintain patient consents; and

the risk that patients enrolled in clinical trials will drop out of the trials before completion.

Our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates. This competition will reduce the number and types of patients and qualified clinical investigators available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors or clinical trial sites may not allow us to conduct our clinical trial at such site if competing trials are already being conducted there. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials in such clinical trial site. We may also encounter difficulties finding a clinical trial site at which to conduct our trials.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our planned clinical trials, which could prevent completion of these clinical trials and adversely affect our ability to advance the development of our product candidates.

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Because the results of preclinical studies and early clinical trials are not necessarily predictive of future results, any product candidate we advance into clinical trials may not have favorable results in later clinical trials, if any, or receive regulatory approval.

Pharmaceutical development has inherent risk. We will be required to demonstrate through well-controlled clinical trials that our product candidates are safe and effective with a favorable benefit-risk profile for use in their target indications before we can seek regulatory approvals for their commercial sale. Adrulipase has completed four Phase 2 clinical trials in two separate indications (three Phase 2 in CF patients and one Phase 2 in CP patients). Success in pre-clinical studies or early clinical trials does not mean that later clinical trials will be successful, as product candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressed through initial clinical testing. We also may need to conduct additional clinical trials that are not currently anticipated. Drug developers frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results.

Any product candidate we advance into and through clinical trials may cause unacceptable adverse events or have other properties that may delay or prevent their regulatory approval or commercialization or limit their commercial potential.

Unacceptable adverse events caused by Adrulipase in clinical trials could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications and markets. This, in turn, could prevent us from commercializing the affected product candidate and generating revenues from its sale. We have not yet completed testing of any of our product candidates for the treatment of the indications for which we intend to seek product approval in humans, and we currently do not know the extent of adverse events, if any, that will be observed in patients who receive any of our product candidates. If any of our product candidates cause unacceptable adverse events in clinical trials, we may not be able to obtain regulatory approval or commercialize such product or, if such product candidate is approved for marketing, future adverse events could cause us to withdraw such product from the market.

Delays in the commencement or completion of our clinical trials could result in increased costs and delay our ability to pursue regulatory approval and commercialization of our product candidates.

The commencement and completion of clinical trials can be delayed for a variety of reasons, including delays in:

obtaining regulatory clearance to commence a clinical trial;

identifying, recruiting and training suitable clinical investigators;

reaching agreement on acceptable terms with prospective clinical research organizations (“ CROs ”) and trial sites, the terms of which can be subject to extensive negotiation, may be subject to modification from time to time and may vary significantly among different CROs and trial sites;

obtaining sufficient quantities of investigational product (“ IP ”) for our product candidates for use in clinical trials;

obtaining Institutional Review Board (“ IRB ”) or ethics committee approval to conduct a clinical trial at a prospective site;

identifying, recruiting and enrolling patients to participate in a clinical trial, including delays and/or interruptions resulting from geo-political actions, such as the war in Ukraine, disease or public health epidemics, such as the coronavirus, or natural disasters;

retaining patients who have initiated a clinical trial but may withdraw due to adverse events from the therapy, insufficient efficacy, changing clinical protocols, fatigue with the clinical trial process, or personal issues;

retaining patients who may not follow the clinical trial protocols due to factors including the coronavirus epidemic; and

availability of funds.

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Any delays in the commencement of our clinical trials will delay our ability to pursue regulatory approval for our product candidates. In addition, many of the factors that cause, or lead to, a delay in the commencement of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate.

We may be required to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the trials are not well designed.

Regulatory agencies, IRBs or data safety monitoring boards may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Clinical trials must be conducted in accordance with current cGCPs or other applicable foreign government guidelines governing the design, safety monitoring, quality assurance and ethical considerations associated with clinical studies. Clinical trials are subject to oversight by the FDA, other foreign governmental agencies and IRBs at the study sites where the clinical trials are conducted. In addition, clinical trials must be conducted with product candidates produced in accordance with applicable cGMPs, which are the FDA’s regulations governing the design, monitoring and control of manufacturing processes and facilities. Clinical trials may be suspended by the FDA, other foreign governmental agencies, or us for various reasons, including:

deficiencies in the conduct of the clinical trials, including failure to conduct the clinical trial in accordance with regulatory requirements or clinical protocols;

deficiencies in the clinical trial operations or trial sites;

the product candidate may have unforeseen adverse side effects;

deficiencies in the trial design necessary to demonstrate efficacy;

fatalities or other adverse events arising during a clinical trial due to medical problems that may not be related to clinical trial treatments;

the product candidate may not appear to be more effective than current therapies; or

the quality or stability of the product candidate may fall below acceptable standards.

If we elect or are forced to suspend or terminate a clinical trial for Adrulipase, the commercial prospects for that product candidate will be harmed and our ability to generate product revenue from that product candidate may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing our product candidates and impair our ability to generate revenue from the commercialization of these product candidates either by us or by our collaboration partners.

The approval processes of regulatory authorities are lengthy, time consuming, expensive and inherently unpredictable. If we are unable to obtain approval for our product candidates from applicable regulatory authorities, we will not be able to market and sell those product candidates in those countries or regions and our business will be substantially harmed.

The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. We have not submitted an NDA or similar filing or obtained regulatory approval for any drug candidate in any jurisdiction and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

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Adrulipase could fail to receive regulatory approval for many reasons, including any one or more of the following:

the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA, BLA or other submission or to obtain regulatory approval in the United States or elsewhere;

the FDA or comparable foreign regulatory authorities may fail to hold to previous agreements or commitments;

the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

the FDA or comparable foreign regulatory authorities may fail to approve our product candidates;

invest significant additional cash in each of the above activities; and

the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

The time and expense of the approval process, as well as the unpredictability of clinical trial results and other contributing factors, may result in our failure to obtain regulatory approval to market, in one or more jurisdictions, Adrulipase, or future product candidates, which would significantly harm our business, results of operations and prospects.

In addition, even if we were to obtain regulatory approval in one or more jurisdictions, regulatory authorities may approve Adrulipase for fewer or more limited indications than we request, may not approve the prices we may propose to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with labeling that does not include the claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing circumstances could materially harm the commercial prospects for Adrulipase.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of the approved labeling, or result in significant negative consequences following marketing approval, if any.

Results of current and future clinical trials of Adrulipase could reveal a high and/or unacceptable severity and frequency of these or other side effects. In such an event, our trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of, or deny approval of, our product candidates for any or all targeted indications. Further, any observed drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences could materially harm our business, financial condition and prospects.

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Additionally, if Adrulipase receive marketing approval, and we or others later identify undesirable side effects caused by our products, a number of potentially significant negative consequences could result, including:

regulatory authorities may withdraw approvals of such product;

regulatory authorities may require additional warnings in the product’s labeling;

we may be required to create a medication guide for distribution to patients that outlines the risks of such side effects;

we could be sued and held liable for harm caused to patients; and

our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product, if approved, and could significantly harm our business, results of operations and prospects.

If we are unable to execute our sales and marketing strategy for our products and are unable to gain market acceptance, we may be unable to generate sufficient revenue to sustain our business.

We operate as a clinical-stage biopharmaceutical company with relation to our Biopharmaceutical assets and have yet to begin to generate revenue from Adrulipase. Our product candidate is in an early stage of clinical development, and, if we obtain marketing approval for any of products in the future, which we anticipate would not occur for several years, if at all.

We may never gain significant market acceptance for our product candidates and therefore may never generate substantial revenue or profits for us. We will need to establish a market for any of our product candidates that receive regulatory approval through physician education, sales and marketing efforts, awareness programs and the publication of clinical data. Gaining acceptance in medical communities requires, among other things, publication in leading peer-reviewed journals of results from our studies. The process of publication in leading medical journals is subject to a peer review process and peer reviewers may not consider the results of our studies sufficiently novel or worthy of publication. Failure to have our studies published in peer-reviewed journals could limit the adoption of Adrulipase. Our ability to successfully market our product candidates that we may develop will depend on numerous factors, including:

the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

the efficacy and safety as demonstrated in clinical trials;

the clinical indications for which the product is approved;

the inability to demonstrate effectively that the clinical and other benefits of a product candidate outweigh any safety or other perceived risks;

the inability to demonstrate effectively that the efficacy of a product candidate is superior to a competing treatment;

conducting clinical utility studies of our product candidates to demonstrate economic usefulness to providers and payers;

relative convenience and ease of administration;

whether our current or future partners, support our offerings;

the success of the sales force and marketing effort;

unfavorable publicity relating to the product;

whether healthcare providers believe our product candidates provide clinical utility relative to their cost; and

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whether private health insurers, government health programs and other third-party payers will cover our product candidates.

We currently have no commercial organization. If we are unable to establish satisfactory sales and marketing capabilities or secure a sales and marketing partner, we may not successfully commercialize any of our product candidates.

We have no commercial infrastructure. In order to commercialize products that are approved for marketing, we must either establish our own sales and marketing infrastructure or collaborate with third parties that have such commercial infrastructure.

We may not be able to enter into collaboration agreements on terms acceptable to us or at all. In addition, even if we enter into such relationships, we may have limited or no control over the sales, marketing and distribution activities of these third parties. Our future revenues may depend heavily on the success of the efforts of these third parties. If we elect to establish a sales and marketing infrastructure, we may not realize a positive return on this investment. In addition, we will have to compete with established and well-funded pharmaceutical and biotechnology companies to recruit, hire, train and retain sales and marketing personnel. Factors that may inhibit our efforts to commercialize our product candidates without strategic partners or licensees include:

our inability to recruit and retain adequate numbers of effective sales and marketing personnel;

the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our future products;

the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

unforeseen costs and expenses associated with creating an independent sales and marketing organization.

If we are not successful in recruiting sales and marketing personnel or in building a sales and marketing infrastructure, or if we do not successfully enter into appropriate collaboration arrangements, we will have difficulty successfully commercializing our product candidates and any we may develop or acquire, which would adversely affect our business, operating results and financial condition. Outside the United States, we may commercialize our product candidates by entering into collaboration agreements with pharmaceutical partners. We may not be able to enter into such agreements on terms acceptable to us or at all. In addition, even if we enter into such relationships, we may have limited or no control over the sales, marketing and distribution activities of these third parties. Our future revenues may depend heavily on the success of the efforts of these third parties.

We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

From time to time, we may form or seek strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to Adrulipase and any future product candidates that we may develop. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. These relationships also may result in a delay in the development of Adrulipase if we become dependent upon the other party and such other party does not prioritize the development of our product candidates relative to its other development activities. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy. If we license products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture. We cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction. We rely completely on third parties to manufacture our preclinical and clinical pharmaceutical supplies and expect to continue to rely on third parties to produce commercial supplies of our product candidates, and our dependence on third party suppliers could adversely impact our business.

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We rely completely on third parties to manufacture our preclinical and clinical pharmaceutical supplies and expect to continue to rely on third parties to produce commercial supplies of any approved product candidate, and our dependence on third party suppliers could adversely impact our business.

We do not currently manufacture our product candidates and expect to rely on third parties to do so, if and when required. The proprietary yeast cell line from which the Adrulipase API is derived is kept at a storage facility maintained by Charles River Laboratories Inc. Adrulipase drug substance and drug product are currently manufactured at a contract facility located in Tianjin, China owned by Asymchem Life Science Co., Ltd. We believe there are multiple alternative contract manufacturers capable of producing the Adrulipase product we need for clinical trials. There is no guarantee that the processes are easily reproducible and transferrable.

We are completely dependent on these third parties for product supply and our Adrulipase development program would be adversely affected by a significant interruption in our ability to receive such materials. We have not yet entered into long-term manufacturing or supply agreements with any third parties. Furthermore, our third-party suppliers will be required to obtain and maintain compliance with cGMPs and will be subject to inspections by the FDA or comparable regulatory authorities in other jurisdictions to confirm such compliance. In the event that the FDA or such other authorities determine that our third-party suppliers have not complied with cGMP, our clinical trials could be terminated or subjected to a clinical hold until such time as we are able to obtain appropriate replacement material. Any delay, interruption or other issues that arise in the manufacture, packaging, or storage of our products as a result of a failure of the facilities or operations of our third-party suppliers to pass any regulatory agency inspection could significantly impair our ability to develop and commercialize our products.

We do not expect to have the resources or capacity to commercially manufacture any of our proposed products, if approved, and will likely continue to be dependent upon third party manufacturers. Our dependence on third parties to manufacture and supply us with clinical trial materials and any approved products may adversely affect our ability to develop and commercialize our products on a timely basis or at all.

We rely on third parties to conduct our clinical trials. If these third parties do not meet our deadlines or otherwise conduct the trials as required, our clinical development programs could be delayed or unsuccessful and we may not be able to obtain regulatory approval for or commercialize our product candidates when expected or at all.

We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves. We use contract research organizations (CROs) to conduct our clinical trials and will rely upon such CROs, as well as medical institutions, clinical investigators and consultants, to conduct our trials in accordance with our clinical protocols. Our CROs, investigators and other third parties will play a significant role in the conduct of these trials and the subsequent collection and analysis of data from the clinical trials.

There is no guarantee that any CROs, investigators and other third parties upon which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required. If any of these third parties fail to meet expected deadlines, fail to adhere to our clinical protocols or otherwise perform in a substandard manner, our clinical trials may be extended, delayed or terminated. If any of our clinical trial sites terminate for any reason, we may experience the loss of follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be jeopardized.

We intend to rely on market exclusivity periods that may not be or remain available to us.

We intend to rely on our ability to obtain and maintain a regulatory period of market exclusivity for any of our product candidates, including Adrulipase, that are successfully developed and approved for commercialization. Although this period in the United States is currently 12 years from the date of marketing approval, reductions to this period have been proposed. This exclusivity period in Europe is currently 10 years from the date of marketing approval by the EMA. Once any regulatory period of exclusivity expires, depending on the status of our patent coverage and the nature of the product, we may not be able to prevent others from marketing products that are biosimilar to or interchangeable with our products, which would materially adversely affect us.

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Due to the significant resources required for the development of our product candidates, we must prioritize development of certain product candidates and/or certain disease indications. We may expend our limited resources on candidates or indications that do not yield a successful product and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Due to the significant resources required for the development of product candidates, we must focus our attention and resources on specific diseases and/or indications and decide which product candidates to pursue and the amount of resources to allocate to each. We are currently focusing our resources on the development of our product candidate, Adrulipase.

Our decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic areas may not lead to the development of any viable commercial product and may divert resources away from better opportunities. Similarly, any decision to delay, terminate or collaborate with third parties in respect of certain programs or product candidates may subsequently prove to be suboptimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the viability or market potential of any of our programs or product candidates or misread trends in the GI, CF, CP, or biotechnology industry, our business, financial condition and results of operations could be materially adversely affected. As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases and indications that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain development and commercialization rights.

Healthcare reform and restrictions on reimbursements may limit our financial returns.

Our ability or the ability of our collaborators to commercialize any of our product candidates that we successfully develop may depend, in part, on the extent to which government health administration authorities, private health insurers and other organizations will reimburse consumers for the cost of these products. These third parties are increasingly challenging both the need for and the price of new drug products. Significant uncertainty exists as to the reimbursement status of newly approved therapeutics. Adequate third-party reimbursement may not be available for our product candidates to enable us or our collaborators to maintain price levels sufficient to realize an appropriate return on their and our investments in research and product development.

Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor cost-containment initiatives, may negatively impact our ability to generate revenues.

The potential pricing and reimbursement environment for Adrulipase, and any future drug products may change in the future and become more challenging due to, among other reasons, policies advanced by the current or any new presidential administration, federal agencies, healthcare legislation passed by Congress, or fiscal challenges faced by all levels of government health administration authorities. Members of the government have made public statements in favor of, and may take steps to implement, various regulatory changes that could negatively impact the pharmaceutical industry, including the Company. Those potential changes include some related to personnel and policy changes at the FDA and other government agencies and programs. For example, HHS could undergo changes that could make it more difficult for the FDA to grant regulatory approvals for drugs. Additionally, if the FDA drug user fee programs were eliminated, that could cause significant delays to facility inspections and approvals of new products. It is too early for us to assess which, if any, of the policy changes that have been publicly referenced would be implemented, and we cannot predict what additional future changes in the health care industry in general, or the pharmaceutical industry in particular, will occur; however, any changes could have a material adverse effect on our business, cash flows, results of operations, financial condition and prospects.

If we or any of our independent contractors, consultants, collaborators, manufacturers, vendors or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions, which could result in penalties and affect our ability to develop, market and sell our product candidates and may harm our reputation.

We are subject to federal, state, and foreign healthcare laws and regulations pertaining to fraud and abuse and patients’ rights. These laws and regulations include:

the U.S. federal healthcare program anti-kickback law, which prohibits, among other things, persons and entities from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual for a

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healthcare item or service, or the purchasing or ordering of an item or service, for which payment may be made under a federal healthcare program such as Medicare or Medicaid;

the U.S. federal false claims and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented, claims for payment by government funded programs such as Medicare or Medicaid that are false or fraudulent, and which may apply to us by virtue of statements and representations made to customers or third parties;

the U.S. federal Health Insurance Portability and Accountability Act (“ HIPAA ”), which prohibits, among other things, executing a scheme to defraud healthcare programs;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, imposes requirements relating to the privacy, security, and transmission of individually identifiable health information, and requires notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information;

the federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members, which is published in a searchable form on an annual basis; and

state laws comparable to each of the above federal laws, such as, for example, anti-kickback and false claims laws that may be broader in scope and also apply to commercial insurers and other non-federal payors, requirements for mandatory corporate regulatory compliance programs, and laws relating to patient data privacy and security.

If our operations are found to be in violation of any such health care laws and regulations, we may be subject to penalties, including administrative, civil and criminal penalties, monetary damages, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, or exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, any of which could adversely affect our financial results. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our management’s attention from the operation of our business, even if our defense is successful. In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time and resources.

Our employees and independent contractors, including principal investigators, consultants, commercial collaborators, service providers and other vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operations.

We are exposed to the risk that our employees and independent contractors, including principal investigators, consultants, any future commercial collaborators, service providers and other vendors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or other unauthorized activities that violate the laws and regulations of the FDA, EMA and other similar regulatory bodies, including those laws that require the reporting of true, complete and accurate information to such regulatory bodies; manufacturing standards; healthcare fraud and abuse, data privacy laws and other similar laws; or laws that require the true, complete and accurate reporting of financial information or data. Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our preclinical studies or clinical trials, or illegal misappropriation of product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. In addition, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation

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in governmental healthcare programs, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Risks Related to our Intellectual Property in the Biopharmaceutical Industry

Our success will depend upon intellectual property, proprietary technologies and regulatory market exclusivity periods, and we may be unable to protect our intellectual property.

Our success will depend, in large part, on obtaining and maintaining patent protection and trade secret protection for Adrulipase, and its formulations and uses, as well as successfully defending these patents against third-party challenges. If we or our licensors fail to appropriately prosecute and maintain patent protection for our product candidates, our ability to develop and commercialize these product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products. This failure to properly protect the intellectual property rights relating to these product candidates could have a material adverse effect on our financial condition and results of operations.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or our partners will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:

patent applications may not result in any patents being issued or any issued patents may not be of sufficient scope to cover our products;

patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable, or otherwise may not provide any competitive advantage;

our competitors, many of which have substantially greater resources than we or our partners and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential products;

there may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful as a matter of public policy regarding worldwide health concerns;

countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop, and market competing products;

others may allege ownership of our patents or patent applications or those of our licensors, and defense of such allegation or potential proceeding could be expensive, time consuming and unsuccessful; and

we may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming and unsuccessful.

In addition to patents, we and our partners also rely on trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, third parties may still obtain this information or come upon this same or similar information independently. We may become subject to claims that we or consultants, advisors or independent contractors that we may engage or have engaged to assist us in developing Adrulipase, Niclosamide, Capeserod and Latiglutenase have wrongfully or inadvertently disclosed to us or used trade secrets or other proprietary information of their former employers or their other clients.

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If we or our partners are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business.

Our success also depends upon our ability and the ability of any of our future collaborators to develop, manufacture, market and sell our product candidates without infringing the proprietary rights of third parties. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing products, some of which may be directed at claims that overlap with the subject matter of our intellectual property. Because patent applications do not publish for 18 months from their priority date, can be filed with a non-publication request in the United States, and can take many years to issue, there may be currently pending applications, unknown to us, which may later result in issued patents that our product candidates or proprietary technologies may infringe. Similarly, there may be issued patents relevant to our product candidates of which we are not aware.

There is a substantial amount of litigation involving patent and other intellectual property rights in the biotechnology and biopharmaceutical industries generally. If a third-party claims that we or any of our licensors, suppliers or collaborators infringe the third party’s intellectual property rights, we may have to:

obtain licenses, which may not be available on commercially reasonable terms, if at all;

abandon an infringing product candidate or redesign our products or processes to avoid infringement;

pay substantial damages, including the possibility of treble damages and attorneys’ fees, if a court decides that the product or proprietary technology at issue infringes on or violates the third party’s rights;

pay substantial royalties, fees and/or grant cross licenses to our technology; and/or

defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.

Our ability to compete may decline if we do not adequately protect our proprietary rights.

Our success depends on obtaining and maintaining proprietary rights to our product candidates for the treatment of age-related diseases, as well as successfully defending these rights against third-party challenges. We will only be able to protect our product candidates, and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, or effectively protected trade secrets, cover them. Our ability to obtain patent protection for our product candidates is uncertain due to a number of factors, including:

we may not have been the first to make the inventions covered by pending patent applications or issued patent;

we may not have been the first to file patent applications for our product candidates or the compositions we developed or for their uses;

others may independently develop identical, similar or alternative products or compositions and uses thereof;

our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability;

any or all of our pending patent applications may not result in issued patents;

we may not seek or obtain patent protection in countries that may eventually provide us a significant business opportunity;

any patents issued to us may not provide a basis for commercially viable products, may not provide any competitive advantages, or may be successfully challenged by third parties;

our compositions and methods may not be patentable;

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others may design around our patent claims to produce competitive products which fall outside of the scope of our patents;

others may identify prior art or other bases which could invalidate our patents.

Even if we have or obtain patents covering our product candidates or compositions, we may still be barred from making, using and selling our product candidates or technologies because of the patent rights of others. Others may have filed, and in the future may file, patent applications covering compositions or products that are similar or identical to ours. There are many issued U.S. and foreign patents relating to chemical compounds and therapeutic products, and some of these relate to compounds we intend to commercialize. These could materially affect our ability to develop our product candidates or sell our products if approved. Because patent applications do not publish for 18 months from their priority date, can be filed with a non-publication request in the United States, and can take many years to issue, there may be currently pending applications unknown to us that may later result in issued patents that our product candidates or compositions may infringe. These patent applications may have priority over patent applications filed by us.

Obtaining and maintaining a patent portfolio entails significant expense and resources. Part of the expense includes periodic maintenance fees, renewal fees, annuity fees, various other governmental fees on patents and/or applications due in several stages over the lifetime of patents and/or applications, as well as the cost associated with complying with numerous procedural provisions during the patent application process. We may or may not choose to pursue or maintain protection for particular inventions. In addition, there are situations in which failure to make certain payments or noncompliance with certain requirements in the patent process can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we choose to forgo patent protection or allow a patent application or patent to lapse purposefully or inadvertently, our competitive position could suffer.

Legal actions to enforce our proprietary rights (including patents and trademarks) can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful and could also result in the invalidation of our patents or trademarks or a finding that they are unenforceable. We may or may not choose to pursue litigation or other actions against those that have infringed on our patents or trademarks, or used them without authorization, due to the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual property rights successfully, our competitive position could suffer, which could harm our results of operations.

Risks Related to Grid Ai Corp.’s Business and Industry

Our 2025 business transformation through the acquisition of Grid AI Corp. may not succeed, and we may fail to realize the anticipated benefits of that transaction.

On September 30, 2025, we acquired Grid AI Corp., which indirectly brought into our consolidated business a 75% interest in AMPX. This transaction fundamentally changed the nature of our business. Historically, we operated as a small clinical-stage biopharmaceutical company. Following the transaction, we also operate an energy technology and software-enabled grid orchestration business.

This acquisition creates substantial risks, including:

failure to integrate operations, systems, controls and reporting

inability to retain or motivate key employees, consultants or management personnel

failure to realize expected commercial opportunities

inaccurate assumptions regarding the acquired business, including its technology, market position, margins, scalability or customer traction

challenges in overseeing a business outside our historical expertise

operational complexity arising from international subsidiaries and minority ownership interests

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impairment or write-down risk related to goodwill and intangible assets recorded in connection with the transaction.

If the acquired business underperforms expectations, or if integration is not successful, our business, financial condition and results of operations could be materially adversely affected.

There can be no assurance that we will be able to obtain stockholder approval to issue shares of our Common Stock issuable upon conversion of our Series H Preferred Stock, and our inability to obtain such approval could materially and adversely affect our business, results of operations and the value of our securities; and that if such stockholder approval is obtained, there is no assurance that we will be able to obtain Nasdaq approval of any initial listing filing application that may be required in connection with the acquisition of Grid AI Corp.

As part of the share exchange transaction with Grid AI Corp. and the stockholders of all of the issued and outstanding shares of Grid AI Corp., we issued to such stockholders of Grid AI Corp. (i) 424,348 shares of our Common Stock, which represented 19.99% of the issued and outstanding shares of Common Stock as of the date of entry into the share exchange agreement, and (ii) 38,801.546 shares of our Series H Preferred Stock. The Series H Preferred Stock is convertible into an aggregate of 38,801,546 shares of Common Stock (the “Conversion Shares”), subject to shareholder approval and certain conditions and adjustments as set forth in the Series H Preferred Stock Certificate of Designation. The shares of Common Stock that we issued at the closing together with the maximum number of Conversion Shares represented 82.5% of the issued and outstanding shares of our Common Stock as of the date of entry into the share exchange agreement on an as-converted and fully-diluted basis. Pursuant to the share exchange agreement with Grid AI Corp. and its stockholders, we are obliged to hold a stockholder meeting as promptly as practicable following the closing of the transaction to consider and obtain approval for the conversion of the shares of Series H Preferred Stock into Common Stock. There can be no assurance that we will be able to obtain the required stockholder approval on a timely basis or at all.

If we do not obtain the required stockholder approval, we may be unable to issue the Conversion Shares and, as a result, may not be able to satisfy our obligations under the share exchange agreement. In addition, the share exchange agreement contains recission and unwinding provisions tied to our ability to seek and obtain the required stockholder approval. If we fail to timely file and pursue the proxy statement process and related stockholder meeting(s), or if the required stockholder approval is not obtained after multiple stockholder meetings, the share exchange agreement, and the transaction contemplated therein, could be rescind and unwind. In addition, we may be required to pay the stockholders of Grid AI Corp. an aggregate fee of $1,000,000 upon any rescission or unwinding. If the share exchange agreement is rescinded or unwound, we could be also subject to disputes, litigation, significant costs, and diversion of management attention. In addition, the anticipated benefits of the acquisition of Grid AI Corp., including expected strategic and operational benefits, could be delayed, reduced, or not realized.

Further, even if we do obtain stockholder approval, there is no assurance that Nasdaq will approve any initial listing application filed in connection with the acquisition of Grid AI Corp., and failure to secure such approval may impair our market access and liquidity.

Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, liquidity, and prospects, and could cause the price of our Common Stock to decline.

Our energy technology business exposes us to risks that are different from our historical biopharmaceutical business.

The GridAI and AMPX business operates in a field that differs substantially from our legacy life sciences operations. This business depends on software development, systems integration, device interoperability, market participation, utility and partner relationships, communications infrastructure, customer adoption and evolving regulatory frameworks related to distributed energy resources and grid services.

This business may be affected by:

technical failure or underperformance of software and orchestration systems

inability to integrate with third-party hardware, devices, utilities, market operators or cloud providers

cybersecurity breaches, service interruptions or data loss

changes in utility rules, market structures or incentive regimes

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longer-than-expected sales cycles or customer concentration

inability to scale deployments profitably

dependence on third-party installers, hardware providers and integration partners.

Because this business is relatively new within our corporate structure and materially different from our historic operating profile, our management, internal controls and investor disclosures may be subject to heightened execution risk.

Grid AI Corp.’s limited operating history makes evaluating its business and prospects difficult.

Prior to Grid AI Corp.’s acquisition of AMPX in February 2025, AMPX had developed and operated two principal technology platforms focused on residential and distributed energy management: DLS developed technology and ALICE Home Energy Management Systems (HEMS). While Grid AI Corp. currently supports these technologies, there is very minimal revenue and Grid AI Corp.’s current focus is on data centers. While Grid AI Corp. is looking to develop a data center platform, they have a limited history operating our business at its current scale and under our current strategy, and therefore a limited history upon which you can base an investment decision.

Further, Grid AI Corp.’s ability to execute its business plan depends on successfully completing customer deployments, integrating with third-party hardware and software systems, and scaling its platform and personnel. Delays in implementation, customer adoption, or integration with external systems could adversely affect operating results. Our and Grid AI Corp.’s operating results may fluctuate significantly, which could make our and Grid AI Corp. future results difficult to predict and could cause our and Grid AI Corp. operating results to fall below expectations.

The distributed generation industry is emerging and our distributed generation offerings may not receive widespread market acceptance.

The implementation and use of distributed generation at scale is still not widespread, and we cannot be sure that any potential customers will accept our services and solutions broadly. Enterprises may be unwilling to adopt Grid AI Corp.’s offerings over traditional or competing power sources for any number of reasons, including the perception that our technology is unproven, lack of confidence in our business model, unavailability of back-up service providers to operate and maintain the energy storage systems, and lack of awareness of our related products and services. Because this is an emerging industry, broad acceptance of Grid AI Corp.’s products and services is subject to a high level of uncertainty and risk. If the market develops more slowly than we and Grid AI Corp. anticipate, our and Grid AI Corp. business may be adversely affected.

If renewable energy technologies are not suitable for widespread adoption, or if sufficient demand for our software-enabled services does not develop or takes longer to develop than we anticipate, Grid AI Corp. may not be able to generate sufficient revenue or revenue at all to be financially successful.

The market for renewable, distributed energy generation is emerging and rapidly evolving, and its future success is uncertain. If renewable energy generation proves unsuitable for widespread commercial deployment or if demand for our renewable energy products and services fails to develop sufficiently, our and Grid AI Corp. revenue, market share and profitability would be adversely impacted.

Many factors may influence the widespread adoption of renewable energy generation and demand for Grid AI Corp. products and services, including, but not limited to the cost-effectiveness of renewable energy technologies as compared with conventional and competitive technologies, the performance and reliability of renewable energy products as compared with conventional and non-renewable products, fluctuations in economic and market conditions that impact the viability of conventional and competitive alternative energy sources, increases or decreases in the prices of oil, coal and natural gas, continued deregulation of the electric power industry and broader energy industry, and the availability or effectiveness of government subsidies and incentives. You should consider our and Grid AI Corp. prospects in light of the risks and uncertainties emerging companies encounter when introducing new products and services into a nascent industry.

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Our market estimates and assumptions may prove inaccurate.

While we and Grid AI Corp. anticipate being able to generate revenue and garnering customers, market estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. Even if the markets in which we compete meet our size estimates and forecasted growth, Grid AI Corp. business could fail to grow at similar rates, if at all. The assumptions relating to Grid AI Corp.’s market opportunities include, but are not limited to (i) general declines in the cost of renewable energy generation assets; (ii) growing deployment of renewable energy assets and energy storage systems; and (iii) continued complexity of the electrical grid and resulting demand for stability and resiliency. Grid AI Corp.’s expected market opportunities are also based on the assumption that Grid AI Corp.’s existing and future offerings will be more attractive to its customers and potential customers than competing products and services. If these assumptions prove inaccurate, our and Grid AI Corp.’s business, financial condition and results of operations could be adversely affected.

We expect to face significant competition in the Grid AI Corp.’s industry.

We expect to face significant competition in the Grid AI Corp.’s industry and market. Grid AI Corp. operates in a competitive and rapidly evolving market that includes energy management software providers, virtual power plant (“VPP”) platforms, battery system integrators, utilities, engineering firms, and in-house customer-developed solutions. Grid AI Corp. also competes with emerging technology providers focused on distributed energy resource optimization and artificial intelligence-driven grid management.

Competition is driven by several factors, including software functionality, scalability, interoperability with third-party hardware and market platforms, speed of deployment, regulatory expertise, customer relationships, and pricing. Grid AI Corp.’s solutions must integrate with a wide range of third-party systems, including batteries, control systems, and energy market infrastructure, which are often not standardized and may change over time.

The markets in which Grid AI Corp. operates are highly competitive and include both established industry participants with significant financial, technical, and commercial resources, as well as new entrants seeking to capitalize on the growth of distributed energy and AI-driven energy optimization. Some competitors offer vertically integrated solutions, including hardware, software, and energy services, while others provide point solutions that compete with specific components of Grid AI Corp.’s platform.

Grid AI Corp.’s ability to compete successfully depends on its ability to continue to innovate, expand its platform capabilities, maintain reliable system performance, and effectively execute its go-to-market strategy. Grid AI Corp. also competes based on its ability to convert pilot programs and non-binding arrangements into long-term commercial contracts, scale deployments across multiple jurisdictions, and adapt to evolving regulatory frameworks and market rules.

We cannot assure that Grid AI Corp. will be able to compete successfully with other players in the market. In such event, our and Grid AI Corp. business may be negatively impacted.

Grid AI Corp. plans to use artificial intelligence in its business, and challenges with properly managing its use could result in harm to our brand, reputation, business or customers, and adversely affect our results of operations.

Grid AI Corp. plans to use AI-enabled software and services offerings and incorporating AI in internal tools that support its business. This emerging technology presents a number of risks inherent in its use. AI algorithms are based on machine learning and predictive analytics, which can create accuracy issues, unintended biases, and discriminatory outcomes that could harm our brand, reputation, business, or customers. Additionally, no assurance can be made that the usage of AI will assist Grid AI Corp. in being more efficient or offset the costs of its implementation. Further, dependence on AI to make certain business decisions may introduce additional operational vulnerabilities by producing inaccurate outcomes, recommendations, or other suggestions based on flaws in the underlying data or other unintended results. Grid AI Corp. competitors or other third parties may incorporate AI into their business, services, and products more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations. Implementing the use of AI successfully, ethically and as intended, will require significant resources. In addition, the use of AI may increase regulatory, cybersecurity, and data privacy risks, such as intended, unintended, or inadvertent transmission of proprietary or sensitive information. The technologies underlying AI and their use cases are rapidly developing, and it is not possible to predict all of the legal, operational or technological risks related to the use of AI. Our and Grid AI Corp. obligation to comply with emerging AI initiatives, laws, and regulations, including under proposed or enacted legislation regulating AI in jurisdictions such as the U.S. and European Union, could entail significant costs, negatively affect our and Grid AI Corp. business, or limit our and Grid AI Corp.’s ability to incorporate certain AI capabilities into our business.

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Grid Ai Corp.’s future growth will depend on developing and commercializing our AI data center platform.

Following Grid AI Corp’s acquisition of AMPX in February 2025, Grid AI Corp. commenced development of a new technology platform focused on AI-optimized energy orchestration for large-scale data center campuses. However, as of today, this platform is still in an early stage of commercialization and has not been deployed. We cannot assure that this platform will ever be successfully deployed. In such event, our and Grid AI Corp.’s business may be unable to achieve anticipated financial growth.

Furthermore, Grid AI Corp. may also introduce new technologies or products that do not work in the future, are not delivered on a timely basis, are not developed according to product and/or cost specifications, or are not well received by customers. There may be fewer opportunities than we expect due to a decline in business or economic conditions or a decreased demand in these markets or for Grid AI Corp.’s new products from our expectations, Grid AI Corp.’s inability to successfully execute its sales and marketing plans, or for other reasons. In addition to Grid AI Corp.’s current growth opportunities, its future growth may be reliant on its ability to identify and develop potential new growth opportunities. This process is inherently risky and may result in investments in time and resources for which we do not achieve any return or value. These risks are enhanced by attempting to introduce multiple breakthrough technologies and products simultaneously.

Grid AI Corp.’s growth opportunities and those opportunities it may pursue are subject to rapidly changing and evolving technologies and industry standards, and may be replaced by new technology concepts or platforms. If Grid AI Corp. does not develop innovative and reliable product offerings and enhancements in a cost-effective and timely manner that are attractive to customers in these markets; if Grid AI Corp. is otherwise unsuccessful in competing in these new product categories; if the new product categories in which we and Grid AI Corp. invest our limited resources do not emerge as expected or do not produce the growth or profitability we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our and Grid AI Corp. business and results of operations may be adversely affected.

Grid AI Corp.’s business strategy may not achieve anticipated benefits. Grid AI Corp’s failure to do so could adversely affect our business, financial condition, and results of operations.

Grid AI Corp. plans to generate revenue from its AI data center platform through base platform fees for operational visibility and orchestration and performance-based fees tied to power cost optimization. Target customers include enterprise and government entities operating large data center campuses.

Grid AI Corp. has initiated development of its data center orchestration platform in connection with a potential future deployment at a customer site. Initial development and integration activities are underway. As of the date of this report, the platform has not yet been commercially deployed.

Any future commercial deployment is expected to occur as customer projects progress through construction and operational readiness milestones. The timing and extent of such deployment will depend on a number of factors, including project development timelines and the availability of customer funding. There can be no assurance that the platform will be successfully commercialized. Customer acceptance of our software and service offerings is critical to our future success. We cannot assure that customers will be attracted to Grid AI Corp.’s platform and software solutions. If market demand for the types of AI-driven energy software and services Grid AI Corp. is developing and will seek to develop in the future does not grow as anticipated, or if competitors offer more attractive products, our and Grid AI Corp.’s revenue growth and market position could be adversely affected. As with all software offerings, there is also a risk that our solutions could be vulnerable to cybersecurity threats or contain errors, bugs, or other issues affecting their functionality, which could negatively affect customer satisfaction and adoption.

In addition, continuing to execute on the new strategy requires investment in new capabilities and resources, particularly in software development, data management, and AI. Grid AI Corp. may face challenges in recruiting, retaining, and training employees who have the necessary skill sets to support our new business model. A failure to build or acquire these capabilities in a timely manner could delay the successful execution of the strategy and weaken Grid AI Corp.’s competitive position.

Grid AI Corp. currently has no major customers.

Grid AI Corp. has no major customers. Even if Grid AI Corp. acquires customers in the future, the loss of any one of its significant customers, their inability to perform under their contracts, their termination or failure to renew their contracts with Grid AI Corp., or their default in payment could cause Grid AI Corp. revenue and its working capital to decline materially. We cannot assure

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that Grid AI Corp. will be successful in acquiring or retaining customers in the future. In such event, we and Grid AI Corp. may be unable to generate revenue, and our and Grid AI Corp.’s business, results of operations and financial condition could be materially and adversely affected.

If Grid AI Corp. is unable to attract and retain key employees and hire qualified management, technical, engineering and sales personnel, its ability to compete and successfully grow its business could be adversely affected.

We believe that Grid AI Corp’s success and its ability to reach its strategic objectives are highly dependent on the contributions of its key management, technical, engineering, and finance personnel. Key leaders include Marshall Chapin, Mike Krastev and Vaclav Moulis. Executive leadership and senior management transitions, reductions in workforce and employee turnover can be time-consuming, difficult to manage, create instability, cause disruption to our business and result in the loss of institutional knowledge. Any of these outcomes could impede the execution of Grid Ai Corp’s day-to-day operations and its ability to fully implement its business strategy. These effects could also make it more difficult to attract and retain talent. The failure to successfully hire and retain key executives and employees or the further loss of any key executives, senior management or employees could have a significant impact on Grid Ai Corp’s operations, including declining product identity and competitive differentiation, eroding employee morale and productivity or an inability to maintain internal controls, regulatory or other compliance related requirements, any and all of which could in turn adversely impact our business, financial condition, and results of operations.

In addition, Grid AI Corp’s ability to manage its growth effectively, including its ability to expand its market presence, is impacted by its ability to successfully retain its management team, and hire and train new personnel. Grid AI Corp’s success in hiring, attracting and retaining senior management and other experienced and highly skilled employees will depend in part on its ability to provide competitive compensation packages and a high-quality work environment and maintain a desirable corporate culture. To help attract, retain, and motivate qualified employees, Grid AI Corp’s uses stock-based awards, such as restricted stock units and performance-based cash incentive awards, and in the case of its executive officers, it also uses performance stock units. Further sustained declines in Grid AI Corp’s stock price, or lower stock price performance relative to our competitors, can further reduce the retention value of our stock-based awards. We may not be able to attract, integrate, train, motivate or retain current or additional highly qualified personnel, and our failure to do so could adversely affect our business, financial condition and operating results.

Furthermore, there is continued and increasing competition for talented individuals in our field. In addition to longstanding competition for highly skilled and technical personnel, we face increased competitive pressures and employee cost inflation in tighter labor markets. Industry competition and cross-industry labor market pressures may negatively affect Grid AI Corp’s ability to attract and retain its executive officers and other key technology, sales, marketing and support personnel and drive increases in our employee costs, both of which could adversely affect Grid AI Corp’s business, financial condition and results of operations.

Any failure to offer high-quality technical support services may adversely affect Grid AI Corp’s relationships with its customers and adversely affect our financial results.

Grid AI Corp’s customers depend on its support organization to resolve any technical issues relating to our hardware and software-enabled services. In addition, Grid AI Corp’s sales process is highly dependent on the quality of our software and service offerings, on our business reputation and on strong recommendations from our existing customers. Any failure to maintain high-quality and highly-responsive technical support, or a market perception that Grid AI Corp does not maintain high-quality and highly-responsive support, could adversely affect Grid AI Corp’s and our reputation, Grid AI Corp’s ability to sell our products to existing and prospective customers, and our and Grid AI Corp’s business, financial condition and results of operations.

Grid AI Corp offers technical support services with its software and service offerings and may be unable to respond quickly enough to accommodate short-term increases in demand for support services, particularly as it increases the size of its customer base. Grid AI Corp also may be unable to modify the format of its support services to compete with changes in support services provided by competitors. It is difficult to predict demand for technical support services and if demand increases significantly, Grid AI Corp. may be unable to provide satisfactory support services to its customers. Additionally, increased demand for these services, without corresponding revenue, could increase costs and adversely affect our and Grid AI Corp’s business, financial condition and results of operations.

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Severe weather events, including the effects of climate change, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.

Grid AI Corp’s business, including its customers and suppliers, may be exposed to severe weather events and natural disasters, such as tornadoes, tsunamis, tropical storms (including hurricanes), earthquakes, windstorms, hailstorms, severe thunderstorms, flooding, wildfires and other fires, extreme heatwaves, drought and power shut-offs causing, among other things, disruptions to our supply chain or utility interconnections and/or damage to energy storage systems installed at its customers’ sites. Such damage or disruptions may prevent Grid AI Corp from being able to satisfy its contractual obligations or may reduce demand from its customers for its energy storage systems causing our operating results to vary significantly from one period to the next. Grid AI Corp. may incur losses in its business in excess of: (1) those experienced in prior years, (2) the average expected level used in pricing, or (3) current insurance coverage limits.

The incidence and severity of severe weather conditions and other natural disasters are inherently unpredictable. Climate change is projected to affect the occurrence of certain natural events, such as an increase in the frequency or severity of wind and thunderstorm events, and tornado or hailstorm events due to increased convection in the atmosphere; more frequent wildfires and subsequent landslides in certain geographies; higher incidence of deluge flooding; and the potential for an increase in severity of the hurricane events due to higher sea surface temperatures. Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the U.S. and elsewhere as a result of climate change have the potential to disrupt Grid AI Corp’s business, the business of its suppliers and the business of its customers, and may cause Grid AI Corp to experience higher attrition, losses and additional costs to maintain or resume operations. Additionally, climate change and the occurrence of severe weather events may adversely impact the demand, price, and availability of insurance. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our and Grid AI Corp’s business.

Increased scrutiny from stakeholders and regulators regarding sustainability practices and disclosures, including those related to sustainability, and disclosure could result in additional costs and adversely impact our business and reputation.

Companies across all industries are facing increased scrutiny regarding their sustainability practices and disclosures and some institutional and individual investors are using sustainability screening criteria in making investment decisions. Our disclosures on these matters or a failure to satisfy evolving stakeholder expectations for sustainability practices and reporting, which may conflict with one another, may potentially harm our reputation and impact employee retention, customer relationships and access to capital. For example, certain market participants use third-party benchmarks or scores to measure a company’s sustainability practices in making investment decisions and customers and supplies may evaluate our sustainability practices or require that we adopt certain sustainability policies as a condition of awarding contracts. In addition, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could expose us to government enforcement actions and private litigation. Furthermore, complying or failing to comply with existing or future federal, state, local, and foreign legislation and regulations applicable to our sustainability efforts, which may conflict with one another, could cause us to incur additional compliance and operational costs, suffer reputational harm or to become the target of litigation, investigations or other proceedings initiated by government authorities or private actors, which could materially and adversely affect our business, financial condition and results of operations.

Our ability to achieve any goal or objective, including with respect to environmental and diversity initiatives and compliance with sustainability reporting standards, is subject to numerous risks, many of which are outside of our control. Examples of such risks include the availability and cost of technologies and products that meet sustainability and ethical supply chain standards, evolving regulatory requirements affecting sustainability standards or disclosures, our ability to recruit, develop and retain diverse talent in our labor markets, and our ability to develop reporting processes and controls that comply with evolving standards for identifying, measuring and reporting sustainability metrics. Methodologies for reporting sustainability data may be updated and previously reported sustainability data may be adjusted to reflect improvement in availability and quality of third-party data, changes in assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our processes and controls for reporting sustainability matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting sustainability metrics, including sustainability-related disclosures that may be required by the SEC, European and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. As sustainability best-practices, reporting standards and disclosure requirements continue to develop, we may incur increasing costs related to sustainability monitoring and reporting.

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A failure of our information technology (“IT”) and data security infrastructure could adversely affect our business and operations.

The efficient operation of Grid AI Corp’s business depends on our IT systems. We rely upon the capacity, reliability and security of our IT and data security infrastructure and our ability to effectively manage our business data, accounting, financial, legal and compliance functions, communications, supply chain, order entry and fulfillment, and expand and routinely update this infrastructure in response to the changing needs of our business. Our existing IT systems and any new IT systems we utilize may not perform as expected. If we experience a problem with the functioning of an important IT system or a security breach of our IT systems, including during system upgrades or new system implementations, the resulting disruptions could adversely affect our business.

Despite our implementation of reasonable security measures, our IT systems, like those of other companies, are vulnerable to damages from computer viruses, natural disasters, fire, power loss, telecommunications failures, personnel misconduct, human error, unauthorized access, physical or electronic security breaches, cyber-attacks (including malicious and destructive code, phishing attacks, ransomware, and denial of service attacks), and other similar disruptions. Such attacks or security breaches may be perpetrated by bad actors internally or externally (including computer hackers, persons involved with organized crime, or foreign state or foreign state-supported actors). Cybersecurity threat actors employ a wide variety of methods and techniques that are constantly evolving, increasingly sophisticated, and difficult to detect and successfully defend against. Moreover, we may not have the current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems over long periods of time. Additionally, it may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full and reliable information about the incident to our customers, partners, regulators, and the public. Geopolitical tensions or conflicts, such as Russia’s invasion of Ukraine, may further heighten the risk of cyber-attacks. The emergence and maturation of AI capabilities may also lead to new and/or more sophisticated methods of attack, including fraud that relies upon “deep fake” impersonation technology or other forms of generative automation that may scale up the efficiency or effectiveness of cyber-attacks. We have experienced such incidents in the past, and any future incidents could expose us to claims, litigation, regulatory or other governmental investigations, administrative fines and potential liability. Any system failure, accident or security breach could result in disruptions to our operations. A material network breach in the security of our or our service providers’ IT systems could include the theft of our trade secrets, customer information, human resources information or other confidential data, including but not limited to personally identifiable information. Although past incidents have not had a material adverse effect on our business operations or financial performance, to the extent that any disruptions or security breach results in a loss or damage to our data, or an inappropriate disclosure of confidential, proprietary or customer information, it could cause significant damage to our reputation, affect our relationships with our customers and strategic partners, lead to claims against us from governments and private plaintiffs, and otherwise adversely affect our business. We cannot guarantee that future cyberattacks, if successful, will not have a material effect on our business or financial results.

Many governments have enacted laws requiring companies to provide notice of cyber incidents involving certain types of data, including personal data. If an actual or perceived cybersecurity breach of security measures, unauthorized access to our system or the systems of the third-party vendors that we rely upon, or any other cybersecurity threat occurs, we may incur liability, costs, or damages, contract termination, our reputation may be compromised, our ability to attract new customers could be negatively affected, and our business, financial condition, and results of operations could be materially and adversely affected. Any compromise of our security could also result in a violation of applicable domestic and foreign security, privacy or data protection, consumer and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability. In addition, we may be required to incur significant costs to protect against and remediate damage caused by these disruptions or security breaches in the future. Further, our contracts may not fully protect us from liabilities, damages, or claims and, although we carry cyber insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. In addition, any data breach, security incident, or compromise of protected personal information may also result in notification requirements or other disclosure obligations and may subject us to civil fines and penalties, litigation, regulatory investigations or enforcement actions or claims for damages under applicable privacy laws.

Our and Grid AI Corp’s failure to adequately secure, protect and enforce our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly.

Grid AI Corp’s intellectual property is primarily software-based and may be inherently difficult to protect, as patents and formal protections in this area can be limited and enforcement may be uncertain. Grid AI Corp relies in part on trade secrets, proprietary know-how, and contractual protections, which may be vulnerable to unauthorized use, employee misappropriation, or other forms of

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intellectual property theft. In addition, litigation to enforce intellectual property rights is often complex, time-consuming, and costly, and there can be no assurance that the Company will be successful in protecting its intellectual property.

Monitoring unauthorized use of proprietary technology can be difficult and expensive. For example, many of our software developers reside in California and we cannot legally prevent them from working for a competitor.

Also, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets, or determine the validity and scope of the proprietary rights of others. Such litigation may result in Grid AI Corp’s intellectual property rights being challenged, limited in scope or declared invalid or unenforceable. We cannot be certain that the outcome of any litigation will be in our or Grid AI Corp’s favor, and an adverse determination in any such litigation could impair our or Grid AI Corp’s intellectual property rights and may adversely affect our business, prospects and reputation.

We and Grid AI Corp’s rely primarily on patent, trade secret and trademark laws, and non-disclosure, confidentiality, and other types of contractual restrictions to establish, maintain, and enforce our intellectual property and proprietary rights. However, our or Grid AI Corp’s rights under these laws and agreements afford us and Grid AI Corp. only limited protection and the actions we take to establish, maintain, and enforce our intellectual property rights may not be adequate. For example, Grid AI Corp’s trade secrets and other confidential information could be disclosed in an unauthorized manner to third parties, our owned or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed, or misappropriated or our intellectual property rights may not be sufficient to provide us with a competitive advantage, any of which could have a material adverse effect on our business, financial condition and results of operations. Additionally, we and Grid AI Corp’s rely on our brand names, trade names and trademarks to distinguish our products and services. In the event that our trademarks are successfully challenged and we lose rights to use those trademarks, we could be forced to rebrand our products and services, which could result in the loss of goodwill and brand recognition. In addition, the laws of some countries do not protect proprietary rights as fully as do the laws of the U.S. As a result, we may not be able to protect our proprietary rights adequately abroad.

We may face claims that our use of such technology or components infringes or otherwise violates the rights of others, which would subject us to the risks described above. We may seek indemnification from our licensors or suppliers under our contracts with them, but our rights to indemnification or our suppliers’ resources may be unavailable or insufficient to cover our costs and losses.

Negative attitudes toward renewable energy projects from the U.S. government, other lawmakers and regulators, and activists could adversely affect our business, financial condition and results of operations.

Parties with an interest in other energy sources, including lawmakers, regulators, policymakers, environmental and advocacy organizations or other activists may invest significant time and money in efforts to delay, repeal or otherwise negatively influence laws, regulations and programs that promote renewable energy. Many of these parties have substantially greater resources and influence than we and Grid AI Corp. have. Further, changes in U.S. federal, state or local political, social or economic conditions, including changes in U.S. Presidential administrations or deprioritization of these laws, programs and regulations, could result in their modification, delayed adoption or repeal. Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other energy sources over renewable energy, could adversely affect our and Grid AI Corp’s business, financial condition and results of operations.

The installation and operation of Grid AI Corp.’s energy storage systems are subject to environmental laws and regulations in various jurisdictions, and there is uncertainty with respect to the interpretation of certain environmental laws and regulations to Grid AI Corp.’s energy storage systems, especially as these regulations evolve over time.

Grid AI Corp. is subject to national, state and local environmental laws and regulations, as well as environmental laws in those foreign jurisdictions in which it operates. Environmental laws and regulations can be complex and are evolving. These laws can give rise to liability for administrative oversight costs, cleanup costs, property damage, bodily injury, fines and penalties. Grid AI Corp. is committed to compliance with applicable environmental laws and regulations, including health and safety standards, and it routinely reviews the operation of its energy storage systems for health, safety and compliance. Grid AI Corp.’s energy storage systems, like other battery technology-based products of which it is aware, produce small amounts of hazardous wastes and air pollutants, and it seeks to handle these materials in accordance with applicable regulatory standards.

Maintaining compliance with laws and regulations can be challenging given the changing patchwork of environmental laws and regulations that prevail at the U.S. federal, state, regional and local levels and in foreign countries in which we operate. Most existing

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environmental laws and regulations preceded the introduction of battery technology and were adopted to apply to technologies existing at the time, namely large, coal, oil or gas-fired power plants. Currently, there is generally little guidance from these agencies on how certain environmental laws and regulations may, or may not, be applied to our technology.

In many instances, Grid AI Corp.’s technology is moving faster than the development of applicable regulatory frameworks. It is possible that regulators could delay or prevent Grid AI Corp. from conducting its business in some way pending agreement on, and compliance with, shifting regulatory requirements. Such actions could delay the sale to and installation by customers of energy storage systems, require their modification or replacement, result in fines, or trigger claims of performance warranties and defaults under customer contracts that could require Grid AI Corp. to refund hardware or service contract payments, any of which could adversely affect our and Grid AI Corp. business, financial performance and reputation.

Changes in the U.S. trade environment, including the imposition of import tariffs, could adversely affect the amount or timing of our revenues, results of operations or cash flows.

The United States has imposed significant new tariffs on nearly all products and components imported into the United States and could propose additional tariffs or increases to those already in place. Escalating trade tensions, particularly between the United States and China, have led to increased tariffs and trade restrictions, including tariffs applicable to certain materials and components for products used in storage or solar energy projects and the renewable energy market more broadly, such as module supply and availability. More specifically, in March 2018, the United States imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports pursuant to Section 232 of the Trade Expansion Act of 1962 and has imposed additional tariffs on steel and aluminum imports pursuant to Section 301 of the Trade Act of 1974. In February 2025, the United States expanded the Section 232 tariffs on steel and aluminum, raising them to 25% on both metals and eliminating previously available country-level and importer-specific exclusions and exemptions. In June 2025, Section 232 tariffs on steel and aluminum were further increased to 50%, and the scope was broadened to cover the steel and aluminum content of a wider range of derivative products. To the extent Grid AI Corp. sources products that contain overseas supplies of steel and aluminum, these tariffs and any additional or increased tariffs could result in interruptions in the supply chain and negatively affect costs and Grid AI Corp.‘s gross margins.

Additionally, in January 2018, the United States adopted a tariff on imported solar modules and cells pursuant to Section 201 of the Trade Act of 1974. The tariff was initially set at 30%, with a gradual reduction over four years to 15%. In 2022, the United States extended the Section 201 solar tariffs for an additional four years, which declined to a rate of 14% in 2025. The Section 201 solar tariffs expired on February 7, 2026. While this tariff did not apply directly to the components we import, it may have indirectly affected Grid AI Corp. by affecting the financial viability of solar energy projects, which could in turn reduce demand for our products. Furthermore, in July 2018, the United States adopted a 10% tariff on a long list of products imported from China under Section 301 of the Trade Act of 1974, including, inverters and power optimizers, which became effective on September 24, 2018 and has been increased several times since then. In June 2019, the Office of the U.S. Trade Representative increased the rate of such tariffs from 10% to 25%. In September 2024, Section 301 tariffs on Chinese solar cells and modules were increased from 25% to 50%, and in January 2025, new 50% Section 301 tariffs took effect on Chinese polysilicon and solar wafers. The Section 301 tariff on lithium-ion non-electric vehicle batteries from China, including those used in energy storage systems, increased from 7.5% to 25% effective January 1, 2026. While these tariffs are not directly applicable to Grid AI Corp.’s products, they could negatively affect the solar energy projects in which its products are used, which could lead to decreased demand for its products. In 2025, the United States broadly imposed additional 10% tariffs on Chinese goods under the International Emergency Economic Powers Act of 1977.

In addition, the United States currently imposes antidumping and countervailing duties on certain imported crystalline silicon photovoltaic (“PV”) cells and modules from China and Taiwan. Such antidumping and countervailing duties can change over time pursuant to annual reviews conducted by the U.S. Department of Commerce (“USDOC”), and an increase in duty rates could have an adverse impact on our operating results.

In February 2022, Auxin Solar Inc., a U.S. producer of crystalline silicon PV products, petitioned the USDOC to investigate alleged circumvention of antidumping and countervailing duties on crystalline silicon PV cell and module imports assembled and completed in Cambodia, Malaysia, Thailand, and Vietnam. In August 2023, USDOC issued a final determination that certain Chinese producers are circumventing antidumping and countervailing duties by shipping crystalline silicon PV cells and modules through Cambodia, Malaysia, Thailand, and Vietnam for minor processing. However, that two-year moratorium has since expired. In 2024, USDOC initiated a second solar antidumping and countervailing duties case involving these same four countries, and final antidumping and countervailing duties orders were issued in June 2025. Also in 2025, the United States also initiated an antidumping and countervailing duties case for Chinese anode material, which could affect battery prices, and USDOC initiated antidumping and

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countervailing duties investigations into imports of solar cell and modules from India, Indonesia, and Laos. The timing and progress of many of Grid AI Corp.’s customers’ projects depend upon the supply of batteries, PV cells and modules. As a result, the imposition and collection of antidumping and countervailing duties, the expanded scope of antidumping and countervailing duties investigations to additional countries and battery materials, and the stacking of multiple tariff authorities on such products, it could adversely affect Grid AI Corp.’s our business, financial condition and results of operations.

Tariffs, and the possibility of additional or increased tariffs in the future, have created uncertainty in the industry, particularly in light of the recent change in U.S. Presidential administration. This has resulted in, and may continue to result in, some project delays. If the price of solar systems or energy storage systems in the United States increases, the use of these products could become less economically feasible and could reduce Grid AI Corp.’s gross margins or reduce the demand of such systems manufactured and sold, which in turn may decrease demand for our products. Additionally, existing or future tariffs may negatively affect key customers, suppliers, and manufacturing partners. Such outcomes could adversely affect the amount or timing of Grid AI Corp.’s revenues, results of operations or cash flows, and continuing uncertainty could cause sales volatility, price fluctuations or supply shortages, or cause our customers to advance or delay their purchase of Grid AI Corp.’s products. It is difficult to predict what further trade-related actions governments may take, which may include additional or increased tariffs and trade restrictions, and we and Grid AI Corp. may be unable to quickly and effectively react to such actions.

Risks Related to our Securities

Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.

Our Common Stock is currently listed for trading on The Nasdaq Stock Market LLC. We must satisfy the continued listing requirements of Nasdaq, to maintain the listing of our Common Stock on The Nasdaq Stock Market LLC.

On September 6, 2024, we received a letter from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of our Common Stock for the last 30 consecutive business days, the Company was not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided 180 days, or until March 5, 2025, to regain compliance with the minimum bid price requirement. On March 6, 2025, we received a letter from Nasdaq advising that we had been granted a 180-day extension, or until September 1, 2025, to regain compliance with the minimum bid price requirement, in accordance with Nasdaq Listing Rule 5810(c)(3)(A). On September 3, 2025, we received a letter from Nasdaq that, Nasdaq has determined that for the last 10 consecutive business days, from August 18 to September 2, 2025, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with Listing Rule 5550(a)(2), and this matter is now closed.

On January 7, 2025, we received a written notice from the Listing Qualifications department of Nasdaq indicating that were not in compliance with Nasdaq Listing Rule 5620(a), due to us not holding an annual meeting of stockholders in 2024 within one year of our 2023 fiscal year end. On February 21, 2025, we submitted a plan to regain compliance. On March 3, 2025, Nasdaq informed us that it has determined to grant us an extension until June 30, 2025 to regain compliance for continued listing. On July 3, 2025, the “Company received a letter from Nasdaq notifying the Company that, as the Company held its Annual Meeting on June 30, 2025, Nasdaq had determined that the Company has regained compliance with Nasdaq Listing Rule 5620(a) and that the matter is now closed.

On April 11, 2025, the Company received a letter from Nasdaq indicating that the Company was not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market under Listing Rule 5550(b)(1), because the Company’s stockholders’ equity of ($3,876,738) as reported in the Company’s Annual Report on Form 10-K for the period ended December 31, 2024 was below the required minimum of $2.5 million, and because, as of April 10, 2025, the Company did not meet the alternative compliance standards, relating to the market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. On June 25, 2025, based on the timely submission by the Company of a compliance plan, the Company received a letter from Nasdaq granting an extension to the Company until October 8, 2025 to regain compliance with the minimum stockholders’ equity requirement. In the Form 8-K filed by the Company on October 6, 2025, the Company disclosed that that it believed that it had stockholders’ equity of at least $2.5 million in compliance with the Equity Rule as a result of the share exchange agreement dated September 30, 2025, between the Company, Grid AI Corp., and the stockholders of all of the issued and outstanding shares of Grid AI Corp. On October 8, 2025, the Company also submitted a letter to Nasdaq stating that the Company was compliant with the minimum stockholders’ equity requirement as a result of the share exchange transaction. On October 28, 2025, the Company received a letter from Nasdaq confirming that based on the Form 8-

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K filed by the Company on October 6, 2025, the Company is in compliance with the Equity Rule. The Letter also noted that if the Company fails to evidence compliance upon filing its next periodic report, it may be subject to delisting. At that time, Nasdaq will provide written notification to the Company, which may then appeal Nasdaq’s determination to a Hearings Panel.

On April 22 2026, we received notice from Nasdaq that we were not in compliance with SEC filings requirements indicating that it is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2025. The notice provides the Company with 60 calendar days, or until June 22, 2026, to submit a plan to regain compliance. If the plan is accepted, Nasdaq may grant an exception of up to 180 calendar days from the original filing due date, or until October 12, 2026, for the Company to regain compliance.

There can be no assurance that we will be able to sustain compliance with all applicable requirements for continued listing on The Nasdaq Stock Market LLC. In 2020, the SEC approved a previously proposed Nasdaq rule change to expedite delisting of securities with a closing bid price at or below $0.10 for 10 consecutive trading days during any bid price compliance period and that have had one or more reverse stock splits with a cumulative ratio of one for 250 or more shares over the prior two-year period. In addition, if a company falls out of compliance with the $1.00 minimum bid price after completing reverse stock splits over the immediately preceding two years that cumulatively result in a ratio one for 250 shares, the company will not be able to avail itself of any bid price compliance periods under Rule 5810(c)(3)(A), and Nasdaq will instead require the issuance of a Staff delisting determination. We could appeal the determination to a hearings panel, which could grant us a 180-day exception to remain listed if it believes we would be able to achieve and maintain compliance with the bid price requirement. Following the exception, the company would be subject to the procedures applicable to a company with recurring deficiencies (Nasdaq Rule 5815(d)(4)(B)).

In addition, Nasdaq advised that the Grid AI Corp. transaction constituted a business combination resulting in a change of control under Nasdaq rules and that the post-transaction entity would be required to satisfy Nasdaq initial listing standards and complete the applicable Nasdaq review process in connection with the second step of the transaction. Failure to satisfy Nasdaq’s requirements, whether relating to stockholders’ equity, bid price, corporate governance, shareholder approval, initial listing criteria or otherwise, could result in delisted our Common Stock from Nasdaq.

In the event that we are unable to regain and sustain compliance with all applicable requirements for continued listing on the Nasdaq, our Common Stock may be delisted from Nasdaq. If our Common Stock were delisted from Nasdaq, trading of our Common Stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our Common Stock on an over-the-counter market, and many investors would likely not buy or sell our Common Stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our Common Stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our Common Stock. In addition, delisting would materially and adversely affect our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our Common Stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.

The limited public market for our securities may adversely affect an investor’s ability to liquidate an investment in us.

Although our Common Stock is currently listed on the Nasdaq Capital Market, there is limited trading activity. We can give no assurance that an active market will develop, or if developed, that it will be sustained. If an investor acquires shares of our Common Stock, the investor may not be able to liquidate our shares should there be a need or desire to do so.

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The market price of our Common Stock may be volatile which could subject us to securities class action litigation and prevent you from being able to sell your shares at or above the offering price.

The market price for our Common Stock has been and may continue to be volatile and subject to wide fluctuations in response to factors including the following:

sales or potential sales of substantial amounts of our Common Stock, including sales required for us to regain and maintain compliance with Nasdaq’s continued listing requirements;

the Grid AI Corp. transaction, related shareholder approvals, Series H conversion issues or other capital structure developments

delay or failure in initiating or completing pre-clinical or clinical trials or unsatisfactory results of these trials;

announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions;

developments relating to the Grid AI and AMPX business

developments concerning our licensors or product manufacturers;

litigation and other developments relating to our patents or other proprietary rights or those of our competitors;

conditions in the pharmaceutical or biotechnology industries;

governmental regulation and legislation;

variations in our anticipated or actual operating results;

change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations; foreign currency values and fluctuations; and

overall economic, geopolitical or capital markets conditions.

Many of these factors are beyond our control. The stock markets in general, and the market for pharmaceutical and biotechnological companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our Common Stock, regardless of our actual operating performance.

We have never paid and do not intend to pay cash dividends on our Common Stock. As a result, capital appreciation, if any, will be your sole source of gain.

We have never paid cash dividends on any of our capital stock and we currently intend to retain future earnings, if any, to fund the development and growth of our business. Our Series B Preferred Stock carries a dividend rate of 9.0% per year, which is cumulative and continues to accrue on a daily basis whether or not declared and whether or not we have assets legally available therefor. We may pay such dividends at our option either in cash or in kind in additional shares of preferred stock. We do not expect to pay any dividends in cash and have paid accrued dividends in kind in additional shares of preferred stock to date. In addition, the terms of future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our Common Stock will be your sole source of gain for the foreseeable future.

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Provisions in our Charter, our amended and restated by-laws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Common Stock.

Provisions of our Charter, our amended and restated by-laws and Delaware law may have the effect of deterring unsolicited takeovers or delaying or preventing a change in control of our company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests. These provisions include:

the inability of stockholders to call special meetings;

the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors;

advance notice required for any nomination or other business to be properly brought before an annual meeting of stockholders which requires notice to be delivered to our secretary not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting, subject to certain exceptions;

any vacancies on our board of directors that results from the death, disability, resignation, disqualification or removal of any director or from any other cause shall be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders; provided that a vacancy created by the removal of a director by the stockholders may be filled by the stockholders; and

forum selection provisions that state that unless we consent in writing to the selection of an alternative forum, (A) (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (“ DGCL ”), the Charter or the by-laws as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware; and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

In addition, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years, has owned 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your Common Stock in an acquisition.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline.

The trading market for our shares is influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline.

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We currently have Series B Preferred Stock, Series G Preferred Stock and Series H preferred Stock outstanding. Our certificate of incorporation authorizes our Board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our Common Stock.

Our Board has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board also has the authority to issue preferred stock without further stockholder approval.

As of May 1, 2026, we have approximately 475.56 shares of Series B Preferred Stock outstanding with a stated value of $7,700 per share, which are currently convertible at the holder’s option at any time, together with any accrued but unpaid dividends thereon, into shares of Common Stock at a conversion price of $97,020, subject to certain adjustments.

Our Series B Preferred Stock gives its holders the preferred right to our assets upon liquidation and the right to receive dividend payments at 9.00% per annum before dividends are distributed to the holders of Common Stock, among other things. The holders of the Series B Preferred Stock, voting as a separate class, also have customary consent rights with respect to certain corporate actions, including the issuance of an increased number of shares of Series B Preferred Stock, the establishment of any capital stock ranking senior to or on parity the Series B Preferred Stock as to dividends or upon liquidation, the incurrence of indebtedness, and certain changes to our Charter or Bylaws including other actions.

Our Board also created the following series of preferred stock: (i) Series C Preferred Stock (“ Series C Preferred Stock ”), of which 75,000 shares are authorized for issuance, none of which are currently outstanding; (ii) Series D Preferred Stock (“ Series D Preferred Stock ”), of which 150 shares are authorized for issuance, none of which are currently outstanding; (iii) Series E Preferred Stock (“ Series E Preferred Stock ”), of which 150 shares are authorized for issuance, none of which are currently outstanding; and (iv) Series F Preferred Stock (“ Series F Preferred Stock ”), of which 7,000 shares are authorized for issuance, none of which are currently outstanding.

As of May 1, 2026, we have 595.808 shares of Series G Preferred Stock outstanding, each share of which is convertible into 1,000 shares of Common Stock, upon shareholder approval. As result of the ImmunogenX rescission agreement 11,777.418 shares of Series G Preferred Stock that we previously issued to the shareholders of IMGX were cancelled.

As to our Series G Preferred Shares, following shareholder approval of the conversion of the Series G Preferred Stock into Common Stock, if any, in accordance with the listing rules of the Nasdaq Stock Market, each share of Series G Preferred Stock will automatically convert into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series G Preferred Stock is prohibited from converting shares of Series G Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion. Except as otherwise required by law, the Series G Preferred Stock does not have voting rights. We do not plan to seek such shareholder approval. However, as long as any shares of Series G Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series G Preferred Stock, make certain corporate actions. The Series G Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

As of May 1, 2026, we also have 38,801.546 shares of Series H Preferred Stock outstanding, each share of which is automatically convertible into 1,000 shares of Common Stock into 1,000 shares of Common Stock, upon shareholder approval.

As to our Series H Preferred Stock shares, following shareholder approval of the conversion of the Series H Preferred Stock into Common Stock, if any, in accordance with the listing rules of the Nasdaq Stock Market, each share of Series H Preferred Stock will automatically convert into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series H Preferred Stock is prohibited from converting shares of Series H Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion) in six equal installments, with each installment representing one-sixth of the aggregate number of Conversion Shares issuable upon conversion of all of the Series H Preferred Stock held by a holder if converted in full automatically and without an action required on the part of the holder thereof within five business days of the achievement of each of six different milestone events relating to the business of AMPX as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series H Non-Voting Convertible Preferred Stock. Except as otherwise required by law, the Series H Preferred Stock does not have voting rights. However, as long as any shares of Series H Preferred Stock are outstanding, the Company will not, without the written consent or affirmative vote of the holders of a majority of the then outstanding shares of the Series H Preferred Stock, make certain corporate actions. With respect to distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all shares of Series H Preferred Stock shall rank: (i) senior to all junior securities; (ii) on parity with the Common Stock any other class or series

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of preferred stock of the Company hereafter created specifically ranking, by its terms, on parity with the Series H Preferred Stock; and (iii) junior to the Series B Convertible Preferred Stock any other class or series of Preferred Stock or other capital stock of the Company hereafter created specifically ranking, by its terms, senior to the Series H Preferred Stock.

Our obligations to our existing holders of the preferred stock and any future holders of any additional series of preferred stock we may issue could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition and hinder the accomplishment of our corporate goals.

In addition to the above-referenced preferred stock, our Board could authorize the issuance of additional series of preferred stock with such rights preferential to the rights of our Common Stock, including the issuance of a series of preferred stock that has greater voting power than our Common Stock or that is convertible into our Common Stock, which could decrease the relative voting power of our Common Stock or result in dilution to our existing stockholders.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with our consolidated financial statements and the related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described under Part I, Item 1A, “Risk Factors,” and elsewhere in this Annual Report.

Overview

GridAI Technologies Corp. is a diversified technology company with operations that, as of December 31, 2025, consisted of (i) energy orchestration and grid optimization software solutions through our subsidiaries Grid AI Corp. and AMPX, and (ii) legacy biopharmaceutical development activities centered on Adrulipase for the treatment of exocrine pancreatic insufficiency.

Historically, the Company operated primarily as a clinical-stage biopharmaceutical company focused on the development of targeted, non-systemic therapies for gastrointestinal diseases. During 2025, the Company underwent a significant strategic transformation. On September 30, 2025, the Company completed a share exchange transaction pursuant to which it acquired 100% of the outstanding equity interests of Grid AI Corp. At the time of the acquisition, Grid AI Corp. owned 75% of the issued and outstanding equity interests of AMPX, which holds the operating subsidiary AMPX Limited. Following the transaction, Grid AI Corp. and its subsidiaries, including AMPX, became consolidated subsidiaries of the Company. As a result, the Company’s business profile changed materially, and its primary strategic focus shifted toward AI-driven energy technology operations.

In March 2025, the Company entered into a rescission agreement with ImmunogenX, LLC, formerly a wholly owned subsidiary of the Company, and the former shareholders of ImmunogenX. Under the rescission transaction, the parties agreed to unwind the Company’s prior acquisition of ImmunogenX by rescinding the previously issued Common Stock and Series G Preferred Stock issued in the transaction, conveying the equity interests of ImmunogenX back to the former ImmunogenX shareholders, and canceling the assumed ImmunogenX options and warrants. The Company retained $695,814 of ImmunogenX accounts payable, while ImmunogenX remained responsible for approximately $9.3 million of secured debt and certain other obligations. The rescission transaction closed on December 31, 2025. Following the closing, ImmunogenX ceased to be a subsidiary of the Company, and the Company no longer held any ownership interest in that business.

As a result, as of December 31, 2025, the Company’s business consists of its newly acquired subsidiaries (Grid AI Corp. and AMPX) together with its continuing Adrulipase development program and related corporate activities

Grid AI Corp. develops software and services designed to accelerate power availability and optimize energy infrastructure for artificial intelligence (AI) data centers and other large energy users. Grid Ai Corp. is currently in the development stage of an AI data center platform. This platform aims to use and optimize distributed energy resources, including battery energy storage systems, on-site generation, and grid interconnections. Currently, there is no revenue generated from this AI data center platform. Grid Ai Corp.’s commercial pipeline has recently been re-established and is continuing to develop through consulting-led engagements and targeted business development initiatives.

For the year ended December 31, 2025, the Company’s consolidated financial statements include the post-acquisition results of Grid AI Corp. and AMPX beginning on September 30, 2025. Prior to the Grid AI Corp. acquisition, the Company operated primarily as a clinical-stage biopharmaceutical company focused on targeted, non-systemic therapies for gastrointestinal diseases. Non-systemic therapies are non-absorbable drugs that act locally, such as in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation. In May 2024, the Company changed its name from First Wave BioPharma, Inc. to Entero Therapeutics, Inc.

The Company’s continuing legacy biopharmaceutical focus is Adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in patients with exocrine pancreatic insufficiency, including patients with cystic fibrosis and chronic

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pancreatitis. The Company plans to continue development activities relating to Adrulipase. The Company’s former Latiglutenase and CypCel programs were part of the ImmunogenX business, which was disposed of on December 31, 2025 in connection with the rescission transaction described below. The Company has also discontinued its Capeserod and Niclosamide programs. The Company terminated its license agreement with Sanofi relating to Capeserod on February 26, 2025 and no further payments were due thereunder.

In March 2024, the Company acquired ImmunogenX, Inc., whose operations were subsequently carried through ImmunogenX, LLC. During 2025, the Company determined to unwind that transaction. In March 2025, the Company entered into a rescission agreement with ImmunogenX and the former ImmunogenX shareholders, which was subsequently amended in July 2025. On December 31, 2025, the Company completed the rescission transaction. In connection with the closing, the Company transferred its ownership interests in ImmunogenX, rescinded the shares previously issued in the acquisition, cancelled the related assumed options and warrants and retained approximately $695,000 of ImmunogenX accounts payable, while ImmunogenX remained responsible for approximately $9.3 million of its secured debt. As a result, ImmunogenX is no longer a subsidiary of the Company.

On February 26, 2025, the Company provided notice of termination of its license agreement with Sanofi relating to Capeserod. That termination became effective in April 2025. The Company also determined not to continue pursuing previously announced strategic transactions involving Journey Therapeutics and Data Vault.

As a result of the acquisition of Grid AI Corp., the completion of the ImmunogenX rescission transaction and the discontinuation of several legacy biotechnology programs, comparability between periods is affected. The Company’s 2025 results reflect a materially different business profile than its 2024 results.

Nasdaq Listing Matters

During 2025, the Company received multiple notices from The Nasdaq Stock Market LLC relating to listing compliance matters.

On September 6, 2024, the Company received notice that it was not in compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). On March 6, 2025, the Company received notice that Nasdaq had granted an additional 180-day extension, through September 1, 2025, to regain compliance. On September 3, 2025, Nasdaq notified the Company that it had regained compliance with the minimum bid price requirement because the closing bid price of the Company’s common stock had been at least $1.00 per share for the required period, and the matter was closed.

On January 7, 2025, the Company received notice that it was not in compliance with Nasdaq Listing Rule 5620(a) because it had not held an annual meeting of stockholders in 2024 within the required time period. The Company held its Annual Meeting on June 30, 2025, and on July 3, 2025, Nasdaq notified the Company that it had regained compliance and that the matter was closed.

On October 28, 2025, the Company received a letter from Nasdaq confirming that, based on the Company’s Form 8-K filed on October 6, 2025, the Company was in compliance with the minimum stockholders’ equity requirement under Listing Rule 5550(b)(1). Nasdaq also noted that if the Company failed to evidence compliance upon filing its next periodic report, it could again become subject to delisting proceedings.

On November 5, 2025, the Company received a letter from Nasdaq stating that the Company’s proposed transaction with GridAI Corp. constituted a business combination resulting in a change of control under Nasdaq Listing Rule 5110(a). Nasdaq indicated that the post-transaction company would be required to satisfy Nasdaq’s initial listing criteria and complete the applicable Nasdaq initial listing review process in connection with the second step of the transaction.

On April 22, 2026, the Company received a notice from Nasdaq Listing Qualifications indicating that it is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to its failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2025. The notice provides the Company with 60 calendar days, or until June 22, 2026, to submit a plan to regain compliance. If the plan is accepted, Nasdaq may grant an exception of up to 180 calendar days from the original filing due date, or until October 12, 2026, for the Company to regain compliance.

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Revolving Loan Agreement

Effective January 31, 2025, the Company entered into a Revolving Loan Agreement providing for borrowings of up to $2.0 million. The revolving note bears interest at 18% per annum and matured on January 31, 2026. The agreement includes customary conditions, covenants and events of default, as well as provisions relating to board composition and the Company’s reasonable best efforts to pursue a qualified public equity offering.

Under the Revolving Loan Agreement, the outstanding principal balance of all outstanding loans, all accrued and unpaid interest and all other amounts, costs, expenses and/or liquidated damages were due in full the “Maturity Date”. On April 1, 2026, the Company received a demand letter from the Lender’s counsel, asserting that the Company is in default of the Revolving Loan Agreement as the Maturity Date has passed and the amounts due under the Revolving Loan Agreement have not been repaid, and demanding the Company to pay a total sum of $1,014,675, which includes the principal amounts received by the Company ($700,000), interest and a 20% increase of these amounts due to the default pursuant to the terms of Revolving Loan Agreement. The Company is evaluating the effects of this event and as of the date of this report is in active discussions with the Lender. Our ability to repay, refinance or otherwise address this indebtedness on acceptable terms will affect our liquidity and financial flexibility. There can be no assurance that we will be able to refinance or satisfy this indebtedness on favorable terms or at all.

Financial Operations Overview

The Company operates through two reportable segments: (i) its artificial intelligence-driven energy technology business (“AI Segment”) and (ii) its legacy biotechnology operations focused on gastrointestinal therapies (“GI Segment”). The AI Segment consists of operations conducted through Grid AI Corp. and its subsidiaries, including AMPX, while the GI Segment reflects the Company’s retained biopharmaceutical development activities, including Adrulipase. Management evaluates performance and allocates resources across these segments based on strategic priorities and expected returns.

Revenue

Historically, the GI Segment did not generate revenue from the sale of approved biopharmaceutical products. Following the acquisition of Grid AI Corp. on September 30, 2025, the Company began generating revenue within its AI Segment from its energy technology operations conducted through Grid AI Corp. and AMPX.

Accordingly, beginning in the fourth quarter of 2025, our consolidated results include revenue associated with the Grid AI Corp. and AMPX business. This revenue has been generated primarily from software-enabled energy orchestration, optimization, dispatch, monitoring and related service offerings. Prior to the Grid AI Corp. acquisition, our legacy operations did not generate product revenue.

Looking forward, we expect our revenue profile to differ materially from prior periods as a result of the inclusion of the Grid AI Corp. and AMPX business. With respect to our retained legacy biopharmaceutical operations, we have not generated revenue from product sales and do not expect to do so unless and until a product candidate receives regulatory approval and is successfully commercialized. We may also seek to generate revenue in the future from strategic relationships, licensing arrangements, milestone payments, service arrangements, grants or other sources, although there can be no assurance that any such revenue will be realized. All revenue recognized during 2025 relates to the AI Segment, as the GI Segment has not generated product revenue.

Research and Development Expense

Research and development expenses relate primarily to the Company’s GI Segment. Prior to 2025, a significant portion of our research and development expenses related to the development of Adrulipase, Niclosamide, Capeserod and Latiglutenase. Following the discontinuation of certain legacy biotechnology programs, the completion of the rescission transaction involving ImmunogenX, LLC on December 31, 2025 and the acquisition of Grid AI Corp. on September 30, 2025, our retained biopharmaceutical research and development activities are primarily focused on Adrulipase.

Research and development expenses generally consist of internal and external costs incurred in connection with our legacy product development activities, including, among other things:

personnel-related costs, including salaries, benefits and stock-based compensation expense

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fees paid to third parties in connection with product development, regulatory and related activities

expenses incurred under agreements with contract research organizations, investigative sites, consultants and contractors

costs of drug substance, drug product, clinical materials and related manufacturing support from contract development and manufacturing organizations and other third parties

costs associated with preclinical, non-clinical and regulatory-support activities

costs associated with evaluating and maintaining retained development assets and capabilities.

Following the strategic shift in the Company’s business, research and development expense is expected to reflect a narrower retained life sciences portfolio than in prior periods. Adrulipase is the Company’s only remaining active biotechnology development program.

Because the Company now also operates an AI-driven energy technology business through Grid AI Corp. and AMPX, operating expenses may include technology, engineering, implementation, systems, data and platform-related costs that are distinct from legacy biopharmaceutical research and development activities. The classification of such costs depends on their nature and the applicable accounting treatment in the relevant period.

We expect the composition of our operating expenses to continue to evolve over time as management allocates resources among:

the continued evaluation and potential advancement of Adrulipase

the operation, enhancement and expansion of the Grid AI Corp. and AMPX business

corporate, compliance, integration and public-company requirements.

The process of conducting clinical development activities and expanding a software-enabled energy technology business is costly and time-consuming. It is difficult to predict with certainty the timing and level of future expenditures, the duration of development activities, the pace of commercial growth or the timing of future revenues.

The success of our activities depends on numerous factors, including clinical outcomes, access to capital, technological performance, customer adoption, regulatory considerations, competitive conditions and commercial viability. Management expects to continue evaluating the allocation of capital and operating resources across the Company’s retained life sciences activities and its energy technology operations based on strategic priorities, liquidity and expected returns.

We do not believe that historical program-by-program comparisons are necessarily meaningful for all periods presented, particularly in light of the Company’s significant business transformation during 2025. The AI Segment does not incur research and development expenses of the nature associated with biopharmaceutical development.

General and Administrative Expense

General and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation, related to executive, finance, business development, legal, compliance and other administrative functions. General and administrative expenses also include legal fees relating to corporate, transactional, governance and intellectual property matters, insurance, information technology costs, professional fees for accounting, auditing, tax and other advisory services, public company costs, including corporate communications and investor relations expenses, and facility-related costs.

General and administrative expenses increased in importance during 2025 as a result of the Company’s acquisition of Grid AI Corp., the integration of the Grid AI Corp. and AMPX business, changes in management and board composition and the continued requirements of operating as a public company.

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We expect general and administrative expenses to remain significant and they may increase in future periods as we continue to support the operation and integration of the Grid AI Corp. and AMPX business, satisfy public company reporting and compliance obligations and incur costs associated with corporate governance, legal, accounting, finance, investor relations and information technology infrastructure.

General and administrative expenses may also increase in connection with business development initiatives, financing activities, strategic transactions, integration efforts and the expansion of our administrative and operational infrastructure, including the engagement of additional personnel, consultants and outside service providers. General and administrative expenses support both the AI Segment and the GI Segment and are managed on a consolidated basis.

Liquidity and Capital Resources

To date, we have not generated revenue from product sales and have experienced net losses and negative cash flows from operations. Our historical operations were funded primarily through sales of equity securities, equity-linked securities and debt financings. In 2025, our business changed significantly as a result of the acquisition of Grid AI Corp. and the completion of the rescission transaction involving ImmunogenX, LLC. Notwithstanding those transactions, as of December 31, 2025, we remained dependent on external sources of capital to fund our operations, satisfy our obligations and execute our business plan. Our capital requirements reflect the combined needs of both the AI Segment and the GI Segment, including funding for platform development, operations and integration activities within the AI Segment and potential future development activities within the GI Segment.

As of December 31, 2025, we had cash and cash equivalents of approximately $899,000, working capital deficit of approximately $12,563,000, and an accumulated deficit of approximately $208,780,000. We have not yet achieved profitability and expect to continue to incur losses for the foreseeable future. Our future capital needs will depend on a number of factors, including the operating requirements of the GridAI and AMPX business, our corporate overhead, debt service obligations, public company costs and the extent to which we seek to preserve, resume or advance development activities relating to Adrulipase.

Our liquidity has been, and we expect will continue to be, dependent on access to outside capital. We may seek additional funds through public or private offerings of equity or debt securities, exercises of outstanding warrants, strategic transactions, commercial partnerships, licensing arrangements, asset sales or other financing alternatives. The availability and terms of financing will depend on many factors, including market conditions, our operating performance, investor sentiment, Nasdaq listing status, the trading price of our Common Stock, our capital structure and broader macroeconomic and geopolitical conditions.

In January 2025, we entered into a revolving loan arrangement that provided for borrowings of up to $2.0 million. The facility bears interest at a high rate and matures on January 31, 2026. As of April 1, 2026, the Company was in default under the revolving loan arrangement as a result of its failure to repay amounts due at maturity, and the lender has issued a demand for repayment of the outstanding amounts. As a result of this default, the lender may accelerate the indebtedness, and amounts in excess of the outstanding principal, including accrued interest, fees and other costs, may become immediately due and payable. Our ability to repay, refinance or otherwise address this indebtedness on acceptable terms will affect our liquidity and financial flexibility. There can be no assurance that we will be able to refinance or satisfy this indebtedness on favorable terms or at all.

During 2025, we also completed the acquisition of Grid AI Corp., which expanded our operations beyond our legacy life sciences activities to include software-enabled energy orchestration and grid-edge platform activities through Grid AI Corp. and AMPX. In addition, on December 31, 2025, we completed the rescission transaction involving ImmunogenX, LLC, pursuant to which that business ceased to be our subsidiary. Following the rescission, we no longer held any ownership interest in ImmunogenX, although we retained certain liabilities as set forth in the related transaction documents. As a result of these transactions, our liquidity and capital resource profile at year-end 2025 differed materially from prior periods.

We expect to continue to incur substantial expenditures in the foreseeable future, including expenditures relating to operation and integration of the Grid AI Corp. and AMPX business, maintenance of our public company infrastructure, professional fees, debt service and evaluation of strategic and financing alternatives. In addition, although Adrulipase remains our principal retained legacy biopharmaceutical asset, any meaningful advancement of that program would require substantial additional capital for manufacturing, clinical development, regulatory activities and related support functions.

Because we do not currently generate revenue from approved pharmaceutical product sales and because the Grid AI Corp. and AMPX business remains in an early stage within our consolidated structure, we expect to continue to rely on external capital resources.

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If we are unable to obtain additional financing when needed, on acceptable terms or at all, we may be required to delay, reduce or terminate operating activities, defer strategic initiatives, reduce headcount, dispose of assets, restructure obligations or pursue other alternatives that may materially adversely affect our business, financial condition and results of operations.

Our access to capital may also be adversely affected by factors beyond our control, including inflation, interest rates, capital markets volatility, geopolitical conflicts, supply chain disruption and changing investor sentiment toward small-cap public companies, biotechnology issuers, emerging energy technology companies or issuers with complex capital structures.

Based on our cash position, operating plans, debt obligations and expected cash requirements, management concluded that substantial doubt existed regarding our ability to continue as a going concern for a period of one year from the date of issuance of the financial statements, unless we are able to obtain additional capital or otherwise improve liquidity. The accompanying financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to issue additional securities will depend on market conditions, the availability of effective registration statements or applicable exemptions from registration, stockholder approval requirements, Nasdaq rules and the terms of our existing securities and financing arrangements. Future equity or equity-linked financings may be dilutive to existing stockholders and may include rights, preferences or privileges senior to those of our Common Stock.

Consolidated Results of Operations for the Years Ended December 31, 2025 and 2024

The following table summarizes our consolidated results of operations for the periods indicated:

Years Ended December 31,

Increase

(decrease)

Revenue

Cost of Services

Gross loss

Operating expenses:

Research and development expenses

General and administrative expenses

Total operating expenses

Loss from operations

Other expenses:

Interest Income (expense), net

Other income (expense), net

Total other income (expense)

Loss from continuing operations before income taxes

Income tax benefit

Loss from continued operations

Loss from discontinued operations

Net loss

Revenues

Revenue for the year ended December 31, 2025 was approximately $36,000, compared to no revenue for the year ended December 31, 2024.

Our consolidated revenue in 2025 entirely reflects the inclusion of the Grid AI and AMPX business following the acquisition of Grid AI Corp. on September 30, 2025. Prior to that acquisition, our historical operations did not generate revenue from approved pharmaceutical product sales. Accordingly, comparability between 2025 and 2024 is affected by the fact that 2025 includes the post-acquisition results of the Grid AI and AMPX business, while 2024 reflects our pre-acquisition legacy business profile.

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Cost of Services

Cost of Services for the year ended December 31, 2025 was approximately $694,000, compared to no cost of services for the year ended December 31, 2024.

Cost of services in 2025 primarily relates to expenses associated with the delivery of services by the Grid AI and AMPX business following the acquisition of Grid AI Corp. on September 30, 2025, including personnel, platform and operational costs. Prior to the acquisition, the Company’s legacy pharmaceutical operations did not incur cost of services, as no revenue-generating service activities were conducted. Accordingly, comparability between 2025 and 2024 is limited, as 2025 includes post-acquisition operating costs associated with the Grid AI and AMPX business, while 2024 reflects the Company’s pre-acquisition legacy operations. Cost of services relates entirely to the AI Segment.

Research and Development Expenses

Research and development expenses for the year ended December 31, 2025 were approximately $925,000, compared to approximately $904,000 for the year ended December 31, 2024, representing a decrease of approximately $21,000, or 2.4%.

Research and development expenses in 2025 primarily reflect development activities associated with the Company’s Grid AI Corp. and AMPX business, together with limited retained legacy biopharmaceutical activities, including Adrulipase, and transition, evaluation or wind-down activity associated with the Company’s prior product portfolio. Following the completion of the rescission transaction involving ImmunogenX, LLC on December 31, 2025, the Latiglutenase and CypCel programs were no longer part of the Company’s business. In addition, the Company terminated the Sanofi license relating to Capeserod during 2025 and is no longer actively pursuing the Niclosamide program. As a result, research and development expense in 2025 reflects a shift from legacy life sciences development activities to technology and platform development within the Company’s Grid AI Corp. and AMPX business. Additionally, during 2025, approximately $890,000 of costs incurred by Grid AI Corp., primarily related to professional fees and labor, were classified outside of research and development expenses, further contributing to the decrease in reported research and development expenses compared to the prior year.

General and Administrative Expense

General and administrative expenses for the year ended December 31, 2025 were approximately $5,500,000, compared to approximately $14,717,000 for the year ended December 31, 2024, representing a decrease of approximately $9,217,000, or 62.6%.

General and administrative expenses in 2025 primarily related to corporate overhead, public company costs, legal and professional fees, finance and administrative functions, insurance, investor and compliance costs, stock-based compensation and costs associated with operating and integrating the GridAI and AMPX business following the September 30, 2025 acquisition. Comparability to 2024 is affected by the expansion of our business and corporate infrastructure during 2025, including transaction-related, integration-related and governance-related costs.

The year-over-year decrease in general and administrative expense primarily reflected the absence in 2025 of the significant transaction-related, advisory, legal and non-cash costs recorded in 2024 in connection with the IMGX transaction and related activities.

Other Income (Expense), Net

Other income (expense), net for the year ended December 31, 2025 was approximately $443,000 all related to the revolver in the GI segment, compared to $2,253 for the year ended December 31, 2024.

Other income (expense), net in 2025 primarily reflected other income, net of approximately $934,000, partially offset by interest expense, net of approximately $491,000 this reflects government grants recognized by the Company’s AI Segment through the AMPX business. Other income (expense), net for 2024 was not significant.

Loss from Continuing Operations

Loss from continuing operations for the year ended December 31, 2025 was approximately $6,640,000, compared to approximately $15,619,000 for the year ended December 31, 2024.

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The loss from continuing operations in 2025 reflected the combined operating results of the AI Segment and the GI Segment, including corporate overhead, retained biopharmaceutical activities and the operating profile of the GridAI and AMPX business following the September 30, 2025 acquisition.

Income tax benefit as of year ended December 31, 2025 was approximately $399,000, compared to $0 for the year ended December 31, 2024

Loss from Discontinued Operations

Loss from discontinued operations for the year ended December 31, 2025 was approximately $312,000, compared to approximately $2,440,000 for the year ended December 31, 2024.

Discontinued operations for 2025 and 2024 related primarily to the ImmunogenX business, which had previously been classified as held for sale and was ultimately disposed of through the rescission transaction completed on December 31, 2025. As a result, this line item reflects the operating results and other effects of that disposal group for the applicable periods.

Net Loss

As a result of the factors described above, net loss for the year ended December 31, 2025 was approximately $6,554,000, compared to approximately $18,059,000 for the year ended December 31, 2024, representing an improvement of approximately $11,506,000, or 63.8%.

Cash Flows for the Years Ended December 31, 2025 and 2024

The following table summarizes our cash flows for the periods indicated:

Years Ended December 31,

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Effect on Foreign Exchange Rate on Changes on Cash

Net (decrease) increase in cash and cash equivalents

Operating Activities

Operating Activities

Net cash used in operating activities during the year ended December 31, 2025 was approximately $5,703,000, compared to net cash used in operating activities of approximately $9,218,000 during the year ended December 31, 2024.

Cash used in operating activities during 2025 was primarily attributable to our net loss, adjusted for non-cash items and changes in working capital. Significant non-cash items during 2025 included, depreciation and amortization of approximately $575,000, stock-based compensation of approximately $734,000, debt discount amortization of approximately $366,000, IMGX recission of approximately $(607,000) and a loss on termination of lease of approximately $109,000. Operating cash flows in 2025 were also impacted by changes in working capital, including increases in other current assets of approximately $45,000, deposits of approximately $98,000, accounts payable of approximately $464,200, trade receivables of approximately $7,000, and other current liabilities of approximately $758,000, as well as decreases in accounts receivable of approximately $1,201,000, deferred tax liabilities of approximately $419,000, accrued expenses of approximately $93,000, and lease liabilities of approximately $5,000.

Comparability between 2025 and 2024 is affected by the acquisition of GridAI Corp. on September 30, 2025, the inclusion of the GridAI and AMPX business for the post-acquisition period and the completion of the rescission transaction involving ImmunogenX, LLC on December 31, 2025. As a result, operating cash flows in 2025 reflect a materially different business profile than in 2024.

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Net cash used in operating activities during the year ended December 31, 2024 of approximately $9.2 million was primarily attributable to the net loss of approximately $18 million. Other non-cash expenses totaling approximately $6.3 million include Series G convertible preferred stock issued to financial advisors at acquisition of approximately $4 million, Common Stock granted to consultants of approximately $1.5 million, stock-based compensation of approximately $0.6 million, and Common Stock issued to financial advisors in connection with the IMGX acquisition of approximately $121,000. Additionally, changes in working capital contributed to cash flow usage, including a decrease in prepaid expenses of $1.1 million and a net increase in accounts payable and accrued expenses of $1.5 million.

Investing Activities

Net cash provided by investing activities during the year ended December 31, 2025 was approximately $323,000, compared to net cash provided by investing activities of approximately $88,000 during the year ended December 31, 2024.

Investing cash flows in 2025 primarily reflected cash acquired in connection with the acquisition of GridAI Corp.

Net cash provided by investing activities during the year ended December 31, 2024 was approximately $88,000 of cash acquired in the IMGX acquisition.

Financing Activities

Net cash provided by financing activities during the year ended December 31, 2025 was approximately $5,899,000, compared to approximately $5,581,000 during the year ended December 31, 2024.

Financing cash flows in 2025 primarily reflected proceeds from the issuance of common stock, pre-funded warrants and warrants, net of offering costs, of approximately $3,025,000, proceeds from promissory notes of approximately $2,300,000 and proceeds from notes payable of approximately $700,000, partially offset by repayments of acquisition consideration of $(750,000).

Net cash provided by financing activities of approximately $5.6 million for the year ended December 31, 2024 was primarily due to net proceeds of approximately $1.7 million from the exercise of warrants in the July 2024 Inducement Offering, as well as net proceeds of approximately $4.5 million from the issuance of Common Stock, pre-funded warrants, and warrants. These inflows were partially offset by approximately $645,000 related to the repayment of a note payable.

Net Increase (Decrease) in Cash and Cash Equivalents

As a result of the factors described above, cash and cash equivalents increased by approximately $715,000 during the year ended December 31, 2025, compared to a decrease of approximately $(3,548,300) during the year ended December 31, 2024.

Critical Accounting Policies and Significant Judgements and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue, expenses and related disclosures during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those described below. We base our estimates on historical experience, current conditions and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described more fully in Note 2 to our consolidated financial statements, management believes that the following accounting policies and estimates involve the most significant judgments and estimates used in the preparation of our financial statements: stock-based compensation, business combinations, goodwill and intangible assets, and the accounting for discontinued operations and assets held for sale. Because of the significance of the judgments involved, changes in assumptions or conditions could materially affect our reported results.

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Stock-Based Compensation

We account for stock-based compensation awards issued to employees, directors and certain non-employees by measuring the fair value of the award on the grant date and recognizing that fair value as compensation expense over the requisite service period, which is generally the vesting period. For certain awards with performance-based or transaction-based vesting conditions, expense is recognized when achievement of the applicable condition becomes probable.

The determination of the fair value of stock options and certain other equity awards requires the use of judgment and estimates, including expected term, expected volatility, risk-free interest rate and, where applicable, the probability and timing of performance conditions. Changes in these assumptions can materially affect the amount of stock-based compensation expense recognized in a given period.

Stock-based compensation became a more significant area of judgment during 2025 due to changes in management and board composition, transaction-related equity arrangements and additional equity awards granted in connection with the Company’s transition following the GridAI transaction.

Business Combinations

We account for acquired businesses using the acquisition method of accounting, which requires us to allocate the purchase consideration to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Any excess of the purchase consideration over the estimated fair value of the net assets acquired is recorded as goodwill.

In 2025, our acquisition of GridAI Corp. required significant management judgment in determining the fair value of the acquired assets and assumed liabilities, including developed technology, customer relationships, trade names, deferred consideration, other assumed obligations and non-controlling interests. These estimates required the use of assumptions regarding future cash flows, discount rates, useful lives, market participant assumptions and other valuation inputs. Because these valuations are inherently judgmental, actual results may differ from the assumptions used, and such differences could be material.

Goodwill and Intangible Assets

Goodwill represents the excess of purchase consideration over the fair value of net identifiable assets acquired in a business combination. As of December 31, 2025, our goodwill balance reflects historical goodwill as well as goodwill recorded in connection with the GridAI acquisition, while goodwill previously associated with the ImmunogenX transaction was affected by the accounting for assets held for sale, discontinued operations and the subsequent rescission transaction.

Goodwill is not amortized, but is tested for impairment at least annually and more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets with finite useful lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment at least annually.

The accounting for goodwill and intangible assets requires significant judgment, including in determining whether impairment indicators exist, identifying reporting units, estimating fair value, determining useful lives and assessing whether acquired assets should be classified as finite-lived, indefinite-lived or held for sale. In particular, following the GridAI acquisition and the rescission of ImmunogenX, the Company was required to make significant judgments regarding the carrying value, classification and presentation of goodwill and intangible assets. If actual results differ from these estimates or if market, operational or strategic conditions change, we may be required to record impairment charges that could be material. [update for final 2025 numbers]

Discontinued Operations and Assets Held for Sale

The determination of whether a business, disposal group or related assets and liabilities should be classified as held for sale or presented as discontinued operations requires significant judgment. These judgments include whether the criteria for held-for-sale classification have been met, whether a disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results and how the related assets, liabilities and operating results should be measured and presented.

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During 2025, these judgments were particularly significant in connection with the ImmunogenX business and the related rescission transaction completed on December 31, 2025. The Company was required to assess whether the relevant disposal group met the criteria for held-for-sale classification, whether the business qualified for discontinued operations presentation and how the related assets, liabilities and results of operations should be measured and disclosed. These determinations involved judgment and had a material effect on the presentation of our consolidated financial statements.

Going Concern Assessment

The preparation of our financial statements also requires management to assess the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued. This assessment requires management to evaluate current liquidity, forecasted cash requirements, debt obligations, expected operating losses, access to capital and management’s plans to mitigate conditions that raise substantial doubt.

Because this analysis depends on assumptions regarding future financing, operating performance and other factors, it involves significant judgment. If actual conditions differ from management’s estimates, our liquidity outlook and going concern conclusions could change materially.