UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-41347

Expion360 Inc.

(Exact name of registrant as specified in its charter)

Nevada		81-2701049
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2025 SW Deerhound Avenue, Redmond, OR		97756
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code): (541) 797-6714

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		XPON		The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates, based on the closing sale price as reported by the ~~The~~ Nasdaq Capital Market on June 2830, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $63.01 million. Shares of common stock beneficially owned by each executive officer, director and holder of more than 10% of common stock have been excluded in that such persons may be deemed to be affiliates.

As of March 2511, ~~2025~~2026, there were 310,~~144~~846,~~468~~135 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant’s definitive Proxy Statement on Schedule 14A relating to its ~~2025~~2026 annual meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated herein by reference in Part III of this Annual Report on Form 10-K.

Expion360 Inc.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS and industry data 4 PART I 6 ITEM 1. BUSINESS 6 ITEM 1A. RISK FACTORS 1312 ITEM 1B. UNRESOLVED STAFF COMMENTS 3230 ITEM 1C. CYBERSECURITY 3231 ITEM 2. PROPERTIES 3332 ITEM 3. LEGAL PROCEEDINGS 33 ITEM 4. MINE SAFETY DISCLOSURES 3332 PART II 3433 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES 3433 ITEM 6. [RESERVED] 3433 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3433 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 4845 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 4845 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 4845 ITEM 9A. CONTROLS AND PROCEDURES 4845 ITEM 9B. OTHER INFORMATION 4946 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION 4946 PART III 5047 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 5047 ITEM 11. EXECUTIVE COMPENSATION 5047 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 5047 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 5047 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 5047 PART IV 5148 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 5148 ITEM 16. FORM 10-K SUMMARY 5248 SIGNATURES 5350 Index to ~~Consolidated~~ Financial Statements 5451

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS and industry data

This Annual Report on Form 10-K (this “Annual Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this Annual Report, other than statements of historical fact, are “forward-looking statements” for purposes of these provisions, including, without limitation, any projections regarding the markets where we operate, any statements of the plans and objectives of our management for future operations, any statements concerning proposed new products or services, any statements regarding expected capital expenditures, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this Annual Report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statement. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “should,” “anticipates,” “intends,” “seeks,” “believes,” “estimates,” “potential,” “forecasts,” “continue,” or other forms of these words or similar words or expressions, or the negative thereof or other comparable terminology. Although we believe the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct. ~~Actual results will likely differ, and could differ materially, from those projected or assumed in the forward-looking statements.~~ Prospective investors are cautioned not to unduly rely on any such forward-looking statements.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

·● We operate in an extremely competitive industry and are subject to pricing pressures.

·● We have a history of losses. As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability.

·● Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern.

·● Our results of operations could be adversely affected by changes in the cost and availability of raw materials and weour ~~are~~reliance ~~dependent~~ on third-party manufacturers and suppliers.

·● Increases in costs, disruption of supply, or shortage of any of our battery components, such as electronic and mechanical parts, ~~or raw materials used in the production of such parts,~~ could harm our business.

·● ~~Our~~We ~~business~~may ~~and~~not ~~future~~be ~~growth~~able ~~depends~~to raise additional capital on ~~the~~acceptable ~~needs~~terms or at all, and ~~success~~our offailure to obtain additional financing could adversely affect our ~~customers~~ability to continue as a going concern.

·● WeOur ~~have~~business ~~substantial~~and ~~customer~~future ~~concentration,~~growth ~~with~~depends aon ~~limited~~the ~~number~~needs ofand ~~customers~~success ~~accounting for a substantial portion~~ of our ~~sales in 2024 and 2023~~customers.

·● IfWe wehave ~~fail~~substantial tocustomer ~~expand~~concentration, with a limited number of customers accounting for a substantial portion of our sales, and ~~distribution~~the ~~channels,~~loss ~~our~~of ~~business~~or reduction in purchases by any of these customers could ~~suffer~~adversely affect our results of operations.

·● ~~The~~If ~~uncertainty~~we infail ~~global~~to ~~economic~~expand ~~conditions~~our ~~could~~sales ~~negatively~~and ~~affect~~distribution channels, our ~~results~~business ofcould ~~operations~~suffer.

·● WeThe ~~are~~uncertainty ~~currently,~~in ~~and~~global ~~will~~economic ~~likely~~conditions ~~continue~~could tonegatively ~~be,~~affect ~~dependent on~~ our ~~two~~results ~~warehouse~~of ~~facilities~~operations. ~~If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted.~~

·● WeTariffs ~~could~~on ~~face~~imported ~~potential~~battery ~~product~~components ~~liability~~may orincrease ~~warranty claims relating to~~ our ~~products~~costs, ~~including the components thereof, which could reduce market adoption, result in reputation damage,~~ and ~~result~~we inmay ~~significant~~be ~~costs~~unable ~~and~~to ~~liabilities,~~fully ~~which~~mitigate ~~would~~such ~~reduce our profitability~~increases.

·● ~~Our~~We ~~operations~~are ~~expose~~currently, usand will likely continue to ~~litigation~~be, ~~tax,~~dependent ~~environmental~~on a limited number of warehouse facilities. If our facilities become inoperable for any reason, ~~and~~our ~~other~~ability ~~legal~~to ~~compliance~~produce ~~risks~~our products could be negatively impacted.

·● ~~Our~~We ~~failure~~could toface ~~introduce~~potential ~~new~~product ~~products~~liability ~~and~~or ~~product~~warranty ~~enhancements~~claims ~~that~~relating ~~respond~~ to ~~customer~~our ~~and~~products, ~~end~~including ~~consumer~~the ~~demand~~components thereof, ~~and~~which ~~any~~could ~~broad~~reduce market ~~acceptance~~adoption, ofresult ~~new~~in ~~technologies~~reputation ~~introduced~~damage, byand ~~our~~result ~~competitors~~in significant costs and liabilities, ~~could~~which ~~adversely~~would ~~affect~~reduce our ~~business~~profitability.

·● WeOur ~~may~~operations ~~not~~expose beus ~~able~~ to ~~adequately~~litigation, ~~protect~~tax, ~~our~~environmental, ~~proprietary intellectual property~~ and ~~technology~~other ~~and~~legal wecompliance ~~may need to defend ourselves against intellectual property infringement claims~~risks.

· Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations and may cause unanticipated liabilities.

· If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed.

· Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings.

· We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business.

· Our stock price may fluctuate significantly, and you may lose all or a part of your investment.

· Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.

· The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.

· The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

· The Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering may have a material adverse impact on our financial condition, may impede our ability to raise additional capital, and may discourage an acquisition of us by a third party.

· Our long-term lease and debt obligations could adversely affect our ability to raise additional capital to fund operations and limit our ability to enter into certain transactions.

~~All~~● ~~forward-looking~~Our ~~statements~~failure ~~attributable~~ to ~~us or~~introduce ~~persons~~new ~~acting~~products ~~on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results will likely differ,~~ and ~~may~~product ~~differ~~enhancements ~~materially,~~that ~~from~~respond ~~anticipated results. Financial estimates are subject~~ to ~~change~~customer and ~~are~~end ~~not~~consumer ~~intended to be relied upon as predictions of future results of operations~~demand, and weany ~~assume~~broad nomarket ~~obligation~~acceptance toof ~~update~~new ortechnologies ~~disclose~~introduced ~~revisions~~by toour ~~those estimates. If we do update or correct one or more forward-looking statements~~competitors, ~~investors~~could ~~and~~adversely ~~others~~affect ~~should~~our ~~not conclude that we will make additional updates or corrections~~business.

●

We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims.

●

Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations and may cause unanticipated liabilities.

●

If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed.

●

Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings.

●

We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business.

●

We may fail to maintain compliance with the continued listing requirements of The Nasdaq Capital Market, which could result in the delisting of our common stock.

●

Our stock price may fluctuate significantly, and you may lose all or a part of your investment.

●

Sales of substantial amounts of our securities in the public markets, including sales under our at-the-market program, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.

●

The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding, which would result in dilution to our stockholders.

●

The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

●

Our long-term lease and debt obligations could adversely affect our ability to raise additional capital to fund operations and limit our ability to enter into certain transactions.

These and other risks and uncertainties are described in greater detail under “Risk Factors” in Item 1A of this Annual Report. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results will likely differ, and may differ materially, from anticipated results. Financial estimates are subject to change and are not intended to be relied upon as predictions of future results of operations, and we assume no obligation to update or disclose revisions to those estimates except as required by applicable law. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections.

MARKET, INDUSTRY, AND OTHER DATA

This Annual Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties as well as our own estimates. All of the market data used in this report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our products include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe our internal assumptions are reasonable, no independent source has verified such assumptions.

NOTICE REGARDING TRADEMARKS

This Annual Report includes trademarks, tradenames, and service marks that are our property or the property of others. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames.

FINANCIAL INFORMATION

Unless otherwise noted, prior period results included in this Annual Report, including share and per share data, as well as stockholders’ equity balances, have been adjusted retroactively, as applicable, to reflect a 1-for-100 reverse stock split, which was effective at 5:00 p.m. Pacific Time on October 8, 2024 (the “Reverse Stock Split”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reverse Stock Split and Reverse Stock Split True-Up Payment” below for additional information about the Reverse Stock Split.

PART I

ITEM 1. BUSINESS

Our Company

Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine, ~~applications~~ and ~~home energy storage products with plans to expand into~~ industrial applications. Our high-powered, lithium battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in the RV and marine industries. In addition, ~~in January 2025~~ we ~~began~~deploy ~~selling~~intellectual ~~our~~property ~~e360~~strategies ~~Home~~to ~~Energy~~support ~~Storage~~product ~~Solutions~~development, ~~which~~enhance ~~consist~~safety ~~of two LiFePO4 battery storage solutions~~ and ~~seek to provide consumers with a cost-effective~~performance, ~~low~~and ~~barrier of entry, flexible system to power~~strengthen ~~their~~relationships ~~homes~~across ~~utilizing~~our ~~solar~~target ~~energy, wind, or grid back-up~~markets. ~~We are deploying multiple intellectual property strategies with research and products to sustain and scale our business.~~ This includes design, development and collaboration, using our IP to bring safety, quality ~~and~~ and service to our current customers and to build relationships with customers in a variety of industries. Our customers consist of dealers, wholesalers, private-label customers, and original equipment manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally.

Our primary target markets ~~are~~include ~~currently~~ the RV, marine, and ~~home~~industrial ~~energy~~power ~~storage industries~~sectors. We believe ~~we are well-positioned to capitalize on~~ the ~~rapid~~ongoing ~~market~~transition ~~conversion~~ from traditional lead-acid batteries to ~~lithium batteries~~LiFePO4 battery systems as the ~~primary~~preferred ~~method~~power ofstorage ~~power~~solution ~~sourcing~~presents ingrowth opportunities across these industries. WeIn ~~are also focused on expanding into the home energy storage market~~addition ~~with~~to the ~~introduction~~RV ofand ~~our~~marine ~~e360 Home Energy Storage Solutions~~markets, ~~and~~ we ~~hope~~are toexpanding ~~establish~~our afocus ~~new~~to ~~standard~~include inindustrial, ~~the~~construction, ~~industry~~surveillance, ~~for~~remote ~~barrier price~~monitoring, ~~flexibility,~~ and ~~integration~~other mission-critical ~~with~~applications ~~this~~requiring ~~offering. Along with the RV~~reliable, ~~marine and home~~ high-energy-density ~~storage~~battery ~~markets,~~systems. weWe ~~aim~~are toalso ~~provide~~pursuing ~~additional capacities~~opportunities towithin the ~~expanding~~ electric forklift and industrial material handling markets, where lithium battery adoption continues to increase.

We launched our e360 product line, ~~which~~in isDecember ~~manufactured for~~2020, initially targeting the RV and marine industries,. inThrough ~~December~~continued ~~2020.~~sales ~~The~~growth ~~e360~~and product ~~line~~development, the ~~through~~e360 ~~its~~product ~~sales~~line ~~growth,~~ has ~~shown~~gained toadoption beamong acustomers ~~preferred~~transitioning ~~conversion solution~~from ~~for~~ lead-acid ~~batteries~~battery systems. InWe ~~December~~have ~~2023,~~since weexpanded ~~announced~~ our ~~entrance~~product portfolio ~~into~~to ~~the~~include ~~home~~next-generation ~~energy~~lithium ~~storage~~battery ~~market~~models ~~with~~designed ~~our~~to ~~introduction of~~increase ~~two~~capacity, ~~LiFePO4~~improve ~~battery~~energy ~~storage~~density, ~~solutions~~enhance ~~that enable residential~~ manufacturability, and ~~small~~expand ~~business~~integration ~~customers~~capabilities tofor ~~create~~OEM ~~their~~and ~~own~~industrial ~~stable~~applications. ~~micro-energy grid~~These ~~and~~products ~~lessen~~are ~~the~~intended ~~impact~~to ofsupport ~~increasing~~mobile ~~power fluctuations~~ and ~~outages.~~off-grid Assystems for ofconstruction, ~~January~~industrial ~~2025~~power, wesurveillance, ~~have~~and ~~begun~~remote ~~shipping~~monitoring ~~orders of our e360 Home Energy Storage Solutions~~applications.

We currently operate Expion360 as one reportable business segment, Energy Storage (ES).

Our products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage. They incorporate detailed~~-oriented~~ design and engineering, strong case materials, ~~and~~optimized internal ~~and~~ structural layouts, and are ~~backed~~supported by responsive customer service.

Our Market Opportunity

~~The~~Lithium-based batteries ~~trend~~power a broad range of ~~vehicle~~applications, ~~electrification~~from isconsumer ~~expected~~electronics to be atransportation ~~significant~~systems ~~growth~~and ~~catalyst~~national ~~for~~defense ~~lithium~~infrastructure. They ~~compounds~~support ~~over~~electrification ~~the~~trends ~~next~~across ~~decade~~multiple industries and ~~beyond.~~enable ~~According~~both tomobile ~~ReportLinker,~~and ~~the~~stationary ~~global~~energy ~~light~~storage ~~electric vehicle~~solutions. ~~market~~The isUnited States ~~growing~~maintains at a ~~9.4%~~strong ~~compound~~research ~~annual~~ecosystem ~~growth rate (“CAGR”)~~ and isan ~~expected~~emerging todomestic ~~reach~~battery ~~$122.7~~manufacturing ~~billion by 2027. Similarly~~base, ~~the~~supported ~~global~~by ~~golf~~federal ~~cart~~initiatives ~~battery market is growing~~ aimed at astrengthening ~~5.9%~~supply ~~CAGR~~chains and isadvancing ~~anticipated~~battery technology, according to ~~reach~~the ~~$216~~U.5S. ~~million~~Department byof ~~2031 according to Allied Market Research~~Energy.

~~Furthermore,~~Expion360 currently focuses on the ~~global~~deep cycle, off-grid, RV, ~~market~~marine, ~~was~~industrial, ~~$57.3~~and ~~billion in~~specialty ~~2021~~vehicle markets, ~~and~~where ishigh-performance ~~anticipated~~LiFePO4 battery tosystems ~~have~~are aincreasingly ~~CAGR~~displacing oflegacy 7lead-acid solutions.6% ~~from~~These ~~2022~~applications torequire ~~2031~~lightweight, ~~with~~high-energy-density, and andurable ~~anticipated~~power ~~market~~systems capable of ~~$117.0~~operating ~~billion~~in byvaried ~~2031,~~and ~~per~~demanding ~~Allied Market~~environmental ~~Research~~conditions.

InThe global ~~addition,~~RV ~~the~~market ~~global~~was ~~residential~~valued ~~solar~~at ~~energy~~approximately ~~storage market~~$60.7 billion in 2022 and is ~~expected~~projected to ~~increase~~grow ~~from~~at ~~$20~~a compound annual growth rate (CAGR) of 11.5% ~~billion~~from in 2023 through 2030, toreaching an ~~anticipated~~estimated $~~518~~144.855 billion inby ~~2032~~2031, aaccording ~~CAGR~~to ofGrand 43View Research.~~16%~~ Increasing electrification within RV platforms, ~~according~~including off-grid and extended-runtime applications, continues to ~~Market Data~~support ~~Forecast~~adoption of lithium-based battery systems.

AtMore broadly, ~~the~~trends ~~intersection~~toward ofequipment ~~both~~electrification, ~~these~~reduced ~~trends~~generator ~~lies~~runtime, ~~the~~remote monitoring infrastructure, and mobile industrial ~~rapidly~~applications ~~expanding~~are ~~lithium~~contributing to sustained demand for advanced battery ~~market~~systems. According to IMARC, the ~~market for~~ global lithium-ion ~~batteries~~battery ismarket ~~projected~~exceeded to$150 ~~grow~~billion atin ~~13.2%~~2025 ~~CAGR~~ and continues to ~~reach~~expand ~~$93.3~~as ~~billion~~electrification byadvances ~~2028~~across transportation, industrial, and specialty equipment sectors.

~~The~~Beyond our ~~vast~~established ~~expansion~~presence ofin ~~the~~RV ~~lithium~~and ~~battery~~marine ~~market~~applications, ~~can be~~we ~~attributed~~are toevaluating ~~global~~opportunities ~~trends~~in ~~promoting~~adjacent ~~clean~~light ~~energy~~electric vehicle, assurveillance, and ~~well~~remote asmonitoring ~~the~~applications ~~compact~~that ~~and~~require ~~flexible~~high-reliability ~~nature~~battery ofsystems. ~~lithium~~According ~~battery~~to ~~packs~~Precedence Research, ~~which~~the ~~make~~global light ~~them~~electric ~~easy~~vehicle tomarket ~~install~~was inestimated ~~RVs~~at ~~and~~$107 ~~boats.~~billion ~~Our~~in ~~technology,~~2025 ~~which~~and weis ~~believe~~projected ~~offers~~to ~~industry-leading~~reach ~~battery~~$268 ~~pack~~billion ~~flexibility~~by ~~for~~2035. ~~the~~While ~~most efficient~~these ~~energy~~adjacent ~~storage,~~markets represent ispotential ~~poised~~long-term togrowth beopportunities, ~~able~~our tocurrent ~~offer~~commercial ~~power~~focus toremains ~~these~~concentrated ~~large~~in ~~vehicles~~deep-cycle, ~~such~~recreational, ~~as RVs~~ and specialty-use ~~recreational boats~~applications.

~~Expion360 is focused on expanding its position in~~We believe the ~~deep~~compact ~~cycle~~form factor, ~~off-grid~~modularity, and ~~stationary~~high energy ~~storage~~density ~~markets.~~of ~~According~~our tolithium ~~the Federal Consortium for Advanced Batteries, the United States has five goals in mind to secure~~ battery ~~materials~~systems ~~and~~position ~~the~~us ~~U.S. technology supply chain. They include (i) securing access~~ to ~~raw~~address applications ~~materials;~~requiring ~~(ii)~~lightweight, ~~support of the U.S. materials~~high-~~processing~~capacity ~~base;~~power ~~(iii)~~solutions ~~stimulation~~across ofRVs, ~~U.S.~~marine ~~electrode~~systems, ~~cell,~~industrial ~~and pack manufacturing; (iv) enabling recycling and reuse of critical materials; and (v) support of scientific R&D~~equipment, ~~STEM education~~ and ~~workforce~~remote ~~development.~~monitoring ~~Expion360 is well-positioned to benefit from this national focus~~applications.

~~Lithium-based~~While we ~~batteries~~do ~~power~~not ~~our~~currently ~~daily~~manufacture ~~lives~~battery cells domestically, ~~from consumer~~we ~~electronics~~monitor todevelopments ~~national~~in ~~defense~~U.S. ~~They~~supply ~~enable~~chain ~~electrification~~policy ofand ~~the~~manufacturing ~~transportation~~initiatives that ~~sector~~may ~~and~~influence ~~provide~~the ~~stationary~~industry ~~grid~~over ~~storage, critical~~time. toWe ~~developing~~periodically ~~the~~evaluate ~~clean-energy~~strategic ~~economy.~~opportunities ~~The~~that ~~U.S.~~could ~~has~~align awith ~~strong~~our ~~research~~long-term ~~community~~objectives; however, aour ~~robust~~current ~~innovation~~operations ~~infrastructure~~rely ~~for~~primarily ~~technological advancement~~on ofestablished ~~batteries,~~offshore ~~and~~third-party anmanufacturing ~~emerging~~partners. ~~lithium-based~~Domestic ~~battery~~supply ~~manufacturing~~chain ~~industry,~~initiatives represent ~~according~~potential tofuture ~~the~~developments ~~U.S.~~rather ~~Department~~than ofcurrent ~~Energy~~operational drivers.

It is our objective to work closely with federal, state and local governments, as well as private industry to help America be the leader in lithium battery technology.

Competitive Strengths

We believe the following strengths differentiate Expion360 and create long-term, sustainable competitive advantages:

Superior Capacity to Lead-Acid Competitors

Lead-acid batteries have historically been the standard in RV and marine transportation vehicles, but these industries are experiencing a rapid conversion from lead-acid to lithium batteries as the primary method of power sourcing. Our lithium-ion batteries are designed to offer superior capacity to ~~our~~traditional lead-acid ~~competitors~~batteries, with an expected lifespan of approximately 12 years under standard operating conditions—three to four times ~~the~~that ~~lifespan~~ of certain lead-acid batteries—and ten times the number of ~~charging~~charge cycles. Furthermore, our typical battery may provide three times the power of the typical, lead-acid battery despite being half the weight (comparing, for example, a typical lead-acid battery like the Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a 0.1C rate).

In addition, we offer a 4.5 Ah 26650 lithium-ion phosphate battery cell, which allows us to increase energy density by over 32% compared to traditional 3.4 Ah 26650 cells.

Expansion into New Markets

Our proprietary e360 SmartTalk mobile app is included in many of our battery models and allows the seamless integration and management of e360 Bluetooth-enabled LiFePO4 batteries. The technology enables users to wirelessly monitor and manage e360 batteries, providing a comprehensive view of both individual battery conditions and performance, ~~and~~as well as information about a power bank consisting of multiple e360 batteries. ~~The~~Our 48 Volt GC2 LiFePO4 battery was ~~our~~the first model to incorporate e360 SmartTalk ~~Battery~~ for ~~powering~~ electric golf carts and other light electric ~~vehicles~~vehicle applications.

In ~~December 2023~~2024, we ~~entered the home energy storage~~introduced ~~market with~~ our ~~introduction~~next ofgeneration ~~two~~12V ~~LiFePO4~~GC2 ~~battery~~and ~~storage~~Group ~~solutions~~27 ~~comprising~~series ~~our~~LiFePO4 ~~e360~~batteries ~~Home~~incorporating ~~Energy~~higher ~~Storage Solution: a wall mounted all~~amp-~~in-one~~hour ~~inverter~~cell ~~and~~options ~~10kWh~~(4.0Ah ~~battery~~ and ~~an expandable server rack style battery cabinet system~~4.5Ah) Weand ~~believe our new home energy storage~~the ~~product~~latest ~~line~~technology, ~~will~~including ~~benefit~~our ~~from~~proprietary aVertical ~~fast-growing~~Heat ~~battery~~Conduction™ ~~energy~~internal ~~storage~~heating, ~~market~~Bluetooth®, ~~which is forecasted by Markets~~ and ~~Markets~~controller toarea ~~grow at a 26.4%~~network ~~CAGR~~(“CANBus”) ~~to reach $17~~communication.5 ~~billion~~We byalso ~~2028.~~launched ~~Further,~~the ~~according~~Edge tobattery ~~Clean Energy Group, approximately 3.2 million homes~~ in ~~the United States have solar panels installed~~2024, ~~but~~which ~~only~~offers ~~about~~a 6%slim ofdesign ~~residential~~designed ~~solar~~to ~~systems~~provide ~~have battery storage~~installation flexibility. ~~Our~~The ~~home~~Edge ~~energy~~is ~~storage~~offered ~~products~~in ~~are~~both ~~currently completing~~12V ~~UL testing~~ and ~~certification,~~48V ~~as well as other requirements for various Authorities Having Jurisdiction~~configurations.

In February 2026, we announced plans to release three next-generation lithium-ion battery models expected to be commercially available in the second half of 2026. The new models include upgraded Group 27 (12.8V 140Ah), GC2H (12.8V 180Ah), and EX1 (12.8V 420Ah) batteries, each designed to increase capacity relative to prior generations. These platforms incorporate our VHC™ internal heating technology, SmartTalk™ Bluetooth connectivity, and CANBus communication, and are engineered to meet UL 1973 safety standards, with final certification pending. The redesigned batteries are also intended to support manufacturing efficiencies and margin improvement initiatives.

InAlso ~~January~~in ~~2024~~February 2026, we ~~introduced~~entered ~~our~~into ~~next~~a ~~generation~~strategic partnership with Dealer Accessory Supply (“DAS”) related to the launch of the DASGen Hybrid ~~12V~~Energy ~~GC2~~Storage ~~and~~System, ~~Group~~representing 27our ~~series~~entry ~~LiFePO4~~into ~~batteries~~the industrial energy storage market. ~~These~~DASGen ~~new~~is ~~versions~~designed ~~include~~to ~~higher~~function ~~amp-hour~~as ~~options~~an ~~(4.0Ah~~energy buffer between diesel generators and ~~4.5Ah~~jobsite ~~cell~~electrical ~~technology)~~loads and ~~the~~ ~~latest~~is ~~advancements~~intended into ~~power~~support ~~technology~~reduced ~~features~~generator runtime, ~~including~~subject ~~Expion360’s~~to ~~proprietary~~site ~~Vertical~~conditions and ~~Heat~~usage. ~~Conduction™~~Under ~~internal heating~~the partnership, ~~Bluetooth®~~DAS serves as the final system assembler, ~~and~~while ~~controller~~we ~~area~~supply ~~network~~the ~~(“CANBus”)~~battery ~~communication~~technology and lead sales and marketing efforts. WeThe ~~began~~system ~~delivering~~utilizes ~~the~~our ~~new~~lithium ~~12V~~iron ~~GC2~~phosphate battery platform and ~~Group~~is integrated with industrial power electronics. 27Initial ~~batteries~~field todeployments ~~customers~~have inbeen ~~the~~completed, ~~second~~with ~~quarter~~performance ofdependent ~~2024~~on site-specific operating conditions.

In July 2024, we launched our new Edge battery, which offers a slim design and adds greater flexibility during installation. The Edge is offered in both 12V and 48V versions. We are seeing high customer interest and started shipping the new Edge in July 2024.

Strong National Retail Customers and Distribution Channels

We ~~have~~maintain sales relationships with ~~many~~ major RV and marine retailers and plan to use our strong reputation in the lithium battery space to create an even stronger distribution channel. ~~Current and~~We ~~former members of management~~ have ~~used their~~ decades of experience in the energy and RV industries toand cultivate relationships with ~~numerous~~ numerous retailers in the space, including Camping World, a leading national RV retailer; and ~~Meyer~~Keystone ~~Distributing~~Automotive, ~~Inc.,~~ a leading national ~~marketer~~ marketer and distributor of automotive and RV specialty products.

Home Energy Integration

We are currently having discussions with integration partners. This is key for the development of our home energy storage products and subsequent sales growth.

Expion360 Products

We have historically focused on the design, assembly, and ~~sales~~sale of LiFePO4 batteries and supporting accessories for RV and marine applications, and have recently expanded into home energy storage solutions and the industrial energy storage market. Our batteries are designed and engineered in-house using premium lithium iron phosphate cells with quality controls at every step. We use high-grade LiFePO4 batteries meeting the UL 1642 standard (UL File No. MH64383). We believe our materials and engineering enhance the reliability, stability, and safety of our products relative to those of our competitors. We reimagined the standard battery case and included built-in rubber feet, radiused corners, 96.7% larger terminal connection pads, interior molded ribs for structural security, and the highest-grade ABS plastics with additives for fire retardancy. To maximize the power and efficiency of our batteries, we welded our cells via thick copper/tin-machined collector plates, welded all interior pack points, added a press break flange at each end to create a mechanical backbone for the battery monitoring system (“BMS”), used high-grade wiring and ring terminals throughout, and treated connections with industrial epoxy for long-lasting protection. Our internal “smart” BMS design includes multiple safety and performance features, such as low temperature discharge, auto shutoff, short circuit protection, low- and high-voltage shutoffs, and overcurrent disconnect. Our structurally sound BMS board features a bolted design, eliminating all unnecessary solder, resulting in one cohesive pack with a long lifespan. We hold our lithium batteries to high safety standards, which has enabled us to achieve a UL 1973 compliance. We stand by our batteries with a robust 12-year warranty.

To enable us to provide a full range of components to complement our battery offerings, we offer a suite of accessories and components for new installations or conversions which includes but is not limited to chargers, monitors, inverters, and solar components from brands such as Victron Energy and RedArc.

As of December 31, 2024, we offered the following products for sale:

12V Batteries:

· Group 24:

o e360 60Ah LiFePO4 battery

o e360 80Ah LiFePO4 battery

o e360 95Ah LiFePO4 battery

· Group 27:

o e360 100Ah LiFePO4 battery

o e360 120Ah LiFePO4 battery

o e360 100Ah LiFePO4 battery with SmartTalk, CANBus, and VHS Internal Heating

· GC2:

o e360 162Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating

· EX1 Custom:

o e360 368Ah LiFePO4 battery

o e360 368Ah LiFePO4 battery with SmartTalk

o e360 450Ah LiFePO4 battery with SmartTalk

· EX2 Edge Custom:

o e360 240Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating

48V Batteries:

· GC2:

o e360 36Ah LiFePO4 battery with SmartTalk and CANBus

· EX2 Edge Custom:

o e360 60Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating

· 3U Server Rack Home Energy Battery:

o e360 100Ah Home Energy LiFePO4 battery with CANBus

Accessories:

· Battery Monitors

· DC-DC Battery Chargers

· AC-DC Battery Chargers

· Solar Charge Controller Battery Chargers

· CANBus Communication Cables

· 120W Portable Solar Panel

· Industrial Battery Mounting Kits – 10 models

· Terminal Blocks

· Bus Bars

· AURA Powercap 600W Inverter

· e360 SmartTalk mobile app

As of December 31, 2024, we had the following products in our pipeline:

· In September 2023, we introduced a new 4.5 Ah 26650 lithium-ion phosphate battery cell and 12 Volt 450 Ah e360 SmartTalk™ lithium-ion battery. We have been regularly shipping the battery to our customers, including OEMs, since March 2024.

· In December 2023, we introduced a wall mounted all-in-one inverter and 10kW battery and an expandable server rack style battery cabinet system and begun taking orders for the new e360 Home Energy Storage Solutions, which began shipping to customers in January 2025. See the section above titled “Competitive Strengths—Expansion into New Markets” for additional information about the new home energy storage solutions.

Competitors

Our competitors include lithium-ion battery manufacturers, such as Relion (which was acquired by Brunswick Corporation in September 2021); Dragonfly Energy Holdings Corp (Nasdaq: DFLI), the manufacturer of Battle Born Batteries; Renogy; and Dakota Lithium. Lead-acid battery manufactures also continue to have a presence in the marketplace. We have designed custom form factors in both the industry standard Group 24 and Group 27 battery sizes allowing us to visually and structurally differentiate Expion360 within the market space. We believe our custom ~~360Ah~~EX1 battery also provides a unique capacity to footprint ratio compared to lead-acid and lithium battery competitors. Our ~~batteries utilize~~ lithium iron phosphate ~~and therefore~~ batteries are ~~expected~~designed to ~~have a~~provide ~~lifespan~~improved ofcycle ~~approximately~~life, 12energy ~~years—three~~density, ~~to four times that of certain lead-acid batteries—~~and ~~ten times the number of charging cycles. Furthermore, our typical battery may provide three times the power of the typical lead-acid battery despite being half the~~ weight ~~(comparing,~~ ~~for~~relative ~~example,~~to atraditional ~~typical~~ lead-acid ~~battery like Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a 0~~batteries.~~1C rate).~~

Manufacturing and Supply Chain

Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells. While we do not have long-term purchase agreements with these manufacturers and ~~our~~generally ~~purchases~~transact ~~are completed~~ on a purchase- order basis, we maintain strong relationships with our manufacturers and cell suppliers, ~~reflected~~ inwhich ~~our~~historically ~~ability~~have enabled us to increase our purchase ~~order~~ volumes ~~(qualifying~~and usqualify for ~~related~~ volume-based discounts). The strength of these relationships has helped us moderate increased supply-related costs associated with inflation, currency fluctuations, and U.S. government tariffs imposed on our imports, and avoid potential shipment delays. We aim to maintain an appropriate level of inventory to satisfy our expected supply requirements. We believe we could locate suitable alternative third-party manufacturers to fulfill our requirements if needed.

Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers that meet our approval and quality standards and, as a result, we may have limited control over the agreed pricing for these raw materials and battery components. We estimate that raw material costs account for over half of our cost of goods sold. Lithium, which is extracted from mined ore, is a key raw material used to produce our battery cells and, as a result, the cost of our battery cells is dependent on the price and availability of lithium, which may be volatile and unpredictable and beyond our control. Additionally, availability of the raw materials used to manufacture our products may be limited at times, resulting in higher prices and/or the need to find alternative suppliers. Our battery cell manufacturers have joint venture factories outside of Asia and have ~~secured~~ sourcing contracts from lithium suppliers in South America and Australia. In addition, we have a secondary source for lithium iron phosphate cells used in our batteries from a supplier in Europe, enabling us to source materials outside of Asia in the event it becomes necessary to do so.

In addition to increased mining and ~~newly located~~ reserves, there is an industry push to provide more efficient ways to extract lithium from mined ore. Another development of the past few years is lithium cell recycling. This process will recapture the raw lithium from the cell for reuse in future cells. However, notwithstanding any efforts to improve the sustainability and efficiency of lithium mining, the price of lithium is volatile. We continue to monitor developments that may adversely affect our supply chain.

~~Management~~While ~~expects~~we ~~that~~expect that products from our Asian third-party manufacturers will be subject to additional tariffs in ~~2025.~~2026, Wewe believe that we can protect our margins through a combination of supplier concessions, customer price increases and operational efficiencies gained as sales continue to grow. U.S. trade policy has been subject to significant legislative, regulatory, and judicial developments in recent years. For example, in February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs. While that decision invalidated certain tariffs imposed under that authority, tariffs and other trade measures may continue to be imposed under other statutory authorities or through future legislation. However, there can be no assurance that such efforts will fully offset increased costs.

Customers

We currently have around ~~more than~~ 300 customers across the United States consisting of dealers, wholesalers, private-label customers and OEMs who then sell our products to end consumers. Our sales are completed on a purchase -order basis and most are without firm, long-term revenue commitments or sales arrangements. Expion360 has sales relationships with many major RV retailers, including Camping World, a leading national RV retailer, and ~~Meyer~~Keystone ~~Distributing~~Automotive, ~~Inc.,~~ a leading national marketer and distributor of automotive and RV specialty products. In addition, we also sell products directly to end consumers. We intend to continue to focus on our sales and distribution channels to develop existing customer relationships and grow our customer base. We also offer a high level of technical support to our customers before and after product sales.

We currently derive a significant portion of our revenue from a limited number of customers. During the year ended December 31, ~~2024~~2025, sales to ~~one~~four ~~customer~~ customers accounted for approximately 1460% of our gross sales. ~~This~~These ~~customer~~customers accounted for 669% of our outstanding accounts receivable as of December 31, ~~2024~~2025. Sales to each of our other customers did not exceed 10% during this period. ~~Four other customers accounted for 60% of our accounts receivable as of December 31, 2024.~~

Intellectual Property

The success of our business and our technology leadership is supported by our proprietary battery technology. We have filed 11 patent applications in the United States to provide protection for our technology, including seven design patent applications and four utility patent applications. In addition, we rely upon a combination of trademark and trade secret laws in the United States, as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies. We also seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our employees and consultants and through non-disclosure agreements with business partners and other third parties.

10We periodically review our development efforts to assess the existence and patentability of new intellectual property. We pursue the registration of our domain names and trademarks and service marks in the United States and in an effort to protect our brand, as of December 31, 2025, we have 18 trademarks registered or pending registration to cover our house marks in the United States and have nine trademarks registered or pending registration in Canada.

WeGovernment periodically review our development efforts to assess the existence and patentability of new intellectual property. We pursue the registration of our domain names and trademarks and service marks in the United States and in an effort to protect our brand, as of December 31, 2024, we have 18 trademarks registered or pending registration to cover our house marks in the United States and have 9 trademarks registered or pending registration in Canada.Regulations

Government Regulation

We are subject to inspections by federal, state, and local regulators overseeing environmental health and safety, which could result in possible citations and/or fines. Lithium-ion battery shipments are categorized as “dangerous goods” and are subject to rules governing their transportation. We have implemented policies and procedures, trained our employees, and conducted internal audits to verify compliance with environmental health and safety regulations.

~~Our~~As ~~Group~~of 24December ~~and~~31, 2025, ~~Group~~our 27currently ~~batteries~~commercialized ~~and~~lithium ~~our~~iron ~~custom 360Ah~~phosphate ~~battery~~batter models have ~~passed~~achieved UL 1973 certification. Certain next-generation models remain subject to final certification.

Employees

As of December 31, ~~2024~~ 2025, we had 2022 employees, all of whom worked for us full time. None of our employees are covered by collective bargaining agreements and we have never experienced an organized work stoppage, strike, or labor dispute. We believe working conditions and compensation packages are competitive with those offered by competitors and consider our relations with our employees to be good.

Environmental, Health, and Safety

We and our third-party manufacturers and suppliers are, and could become, subject to a wide range of international, federal, state, provincial, and local governmental regulations directed at preventing or mitigating environmental harm, as well as to the storage, discharge, handling, generation, disposal and labeling of toxic or other hazardous substances. Although we outsource our manufacturing, the manufacturing of our products by our third-party manufacturers and suppliers require the use of hazardous materials that similarly subject these third parties, and therefore our business, to such environmental laws and regulations. ~~Our~~Noncompliance ~~failure~~by us or ~~the failure of these~~ third-party ~~parties~~manufacturers ~~to comply~~ with ~~these~~applicable ~~laws~~ environmental or safety regulations ~~can~~could result in regulatory actions, ~~civil,~~ ~~or criminal~~ penalties, ~~fines, and legal liabilities, suspension of production, alteration of manufacturing processes, including for our products, reputational damage, and negative impact on our operations~~ or ~~sales~~operational ~~of our products and services~~disruptions. Increased compliance costs by our third-party manufacturing partners may also result in increased costs to our business. Our business and operations are also subject to health and safety laws and regulations adopted by government agencies such as the Occupational Safety and Health Administration. Although we believe we are in material compliance with applicable laws concerning matters relating to health, safety, and the environment, the risk of liability relating to these matters cannot be eliminated completely. To date, we have not incurred significant expenditures relating to environmental compliance nor have we experienced any material issues relating to employee health and safety. See the section titled “Risk Factors” for additional information.

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). As an emerging growth company, we have elected to take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

·● the requirement that we provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

·● reduced disclosure about our executive compensation arrangements;

·● an exemption from the requirement that we hold a non-binding advisory vote on executive compensation or golden parachute arrangements; and

·● an exemption from the auditor attestation in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under SEC rules.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the reduced reporting requirements available to smaller reporting companies and will be able to take advantage of these reduced reporting requirements for so long as our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Company Information

Expion360 Inc. was initially organized as a limited liability company under the name Yozamp Products Company, LLC in the State of Oregon onin June ~~16,~~ 2016 and converted to a Nevada corporation on in November ~~16,~~ 2021.

Our website is found at expion360.com and on the Investor Relations section of our website, we post ~~or will post, as applicable,~~ the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, our Proxy Statement on Schedule 14A, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to to Section 13(a) or 15(d) of the Exchange Act.

All of the information on our Investor Relations web page is available to be viewed free of charge. Information contained on our website is not part of this Annual Report or our other filings with the SEC. We assume no obligation to update or revise any forward-looking statements in this Annual Report whether as a result of new information, future events or otherwise, unless we are required to do so by law.

The SEC also maintains a website found at http://www.sec.gov/ that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves significant risk and uncertainty. Before you make a decision to buy our common stock, in addition to the risks and uncertainties discussed below under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth below, as well as the other information in this Annual Report, including our ~~consolidated~~ financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of these risks actually occur, it may materially and adversely affect our business, financial condition, liquidity, results of operations, and prospects. As a result, the market price of our common stock could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this Annual Report are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business. If any of the following risks or other risks not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our shares of common stock could decline.

Risk Factor Summary

The following is a summary of the most significant risks and uncertainties that we believe could adversely affect our business, financial condition and results of operations. The summary should be read in conjunction with the more detailed risk factors set forth in this “Risk Factors” section and the other information contained in this Annual Report.

Risks Related to Our Business

·● We operate in an extremely competitive industry and are subject to pricing pressures.

·● We have a history of losses. As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability.

·● Our business and future growth depends on the needs and success of our customers.

·● We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in ~~2024~~2025 and ~~2023~~2024.

·● If we fail to expand our sales and distribution channels, our business could suffer.

·● The uncertainty in global economic conditions could negatively affect our results of operations.

·● We are currently, and will likely continue to be, dependent on ~~our~~a ~~two~~limited number of warehouse facilities. If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted.

·● We could face potential product liability or warranty claims relating to our products, including the components thereof, which could reduce market adoption, result in reputation damage, and result in significant costs and liabilities, which would reduce our profitability.

·● Our operations expose us to litigation, tax, environmental, and other legal compliance risks.

·● Our failure to introduce new products and product enhancements that respond to customer and end consumer demand, and any broad market acceptance of new technologies introduced by our competitors, could adversely affect our business.

·● We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims.

·● Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations and may cause unanticipated liabilities.

·● If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed.

·● Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings.

·● We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business.

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Risks Related to Ownership of ~~our~~Our Common Stock

·● Our stock price may fluctuate significantly, and you may lose all or a part of your investment.

·● Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.

·● The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.

· The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

Risk Related to Our Capital Structure

·● Our long-term lease and debt obligations could adversely affect our ability to raise additional capital to fund operations and limit our ability to enter into certain transactions.

Risks Related to Our Business

We operate in an extremely competitive industry and are subject to pricing pressures.

We compete with a number of major international and domestic manufacturers, assemblers and distributors, as well as a large number of smaller, regional competitors. In addition, our customers have many choices for energy storage solutions in the markets that we serve, including both traditional lead-acid products as well as lithium-ion products. We believe our main competitive advantage in displacing incumbent lead-acid batteries is that we produce a lighter, safer, higher performing, cost-effective battery with a longer lifespan. We believe our product offerings, proven reliability, and relationships with dealers, private- label direct to consumer and OEMs enable us to compete effectively against other battery manufacturers and position us favorably to expand into new addressable markets. However, OEM sales typically result in lower average selling prices and related margins, which could result in overall margin erosion, affect our growth, or require us to raise our prices. As a result, we may be unable to maintain our competitive advantage.

Our current competitors have, and future competitors may have, greater resources than we do. Our competitors may be able to devote greater resources to the development of their current and future technologies. For example, foreign producers may be able to employ labor at significantly lower costs than producers in the U.S., expand their export capacity and increase their marketing presence in major America markets. In addition, several of our competitors may be able to devote greater resources to technical, marketing, sales, manufacturing, distribution and other resources, as well as significant name recognition, established positions in the market and long-standing relationships with OEMs and other customers. These advantages may afford them greater access to customers, and may be able to establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their competitive positioning. Our failure to adapt to or address these factors could have a material adverse effect on our business, financial condition, and results of operations.

In addition, our ability to maintain and improve our operating margins has depended, and continues to depend, on our ability to control and reduce our costs. We cannot assure you that we will be able to continue to control our operating, assembly and manufacturing expenses, to raise or maintain our prices or increase our unit volume or unit mix, in order to maintain or improve our results of operations.

We have a history of losses. As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability.

We have experienced net losses in each period since inception. We generated net losses of $136.52 million and $713.5 million for the years ended December 31, 2025 ~~2024~~ and ~~2023~~2024, respectively.

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Part of our business strategy is to focus on our long-term growth. As a result, our profitability may be lower in the near-term than it would be if our strategy were to maximize short-term profitability. Significant expenditures on sales and marketing efforts, expanding our platform, products, features, and functionality, and expanding our research and development, each of which we intend to continue to invest in, may not ultimately grow our business or cause long-term profitability. If we are ultimately unable to achieve profitability at the level anticipated by industry or financial analysts and our stockholders, our stock price may decline.

Our efforts to grow our business may be costlier than we expect, or our revenue growth rate may be slower than we expect, and we may not be able to increase our revenue enough to offset the increase in operating expenses resulting from these investments. If we are unable to continue to grow our revenue, the value of our business and common stock may significantly decrease, which may in turn have a material adverse effect on our ability to raise capital to grow our business.

Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern.

Our audited financial statements as of and for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 were prepared on the assumption that we would continue as a going concern. For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, we sustained recurring losses and negative cash flows from operations. These factors raise substantial doubt about our ability to continue as a going concern over the next 12 months and our independent auditors have included a “going concern” explanatory paragraph in their report on our financial statements as of and for the years ended December 31, ~~2024~~2025 and ~~2023~~2024. IfWe ~~our~~expect ~~results~~to continue to incur operating losses for the foreseeable future, and may need to raise additional ofdebt ~~operations~~or ~~fail~~equity financing to ~~improve~~fund working capital, expand our presence in the marketplace, develop new products, achieve operating efficiencies, and/ accomplish our long-term business plan. There can be no assurance that additional financing will be available on acceptable terms or ifat all. If we ~~fail~~are unable to ~~raise~~secure additional ~~debt~~funding before we achieve profitability or ~~equity~~positive ~~financing~~cash flow from operations, then our financial condition could render us unable to continue as a going concern.

Our results of operations could be adversely affected by changes in the cost and availability of raw materials and weour ~~are~~reliance ~~dependent~~ on third-party manufacturers and suppliers.

We currently rely on multiple third-party manufacturers located in Asia to manufacture our batteries and battery cells, and we intend to continue to rely on these suppliers going forward. Lithium-ion batteries are our most significant raw material and are used along with significant amounts of plastics, steel, copper and other materials in our assembly and manufacturing processes. Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers and thus we may have limited control over the agreed pricing for these raw materials and battery components. We estimate that raw material costs account for over half of our cost of goods sold. The costs of these raw materials, particularly lithium-ion batteries, are volatile and beyond our control. Additionally, availability of the raw materials used to manufacture our products may be limited at times resulting in higher prices and/or the need to find alternative suppliers. Furthermore, the cost of raw materials may also be influenced by transportation and freight costs. Volatile raw material costs can significantly affect our results of operations and make period-to-period comparisons extremely difficult. We cannot assure you that we will be able to either hedge the costs or that we or our third-party manufacturers will be able to secure the availability of our raw material requirements at a reasonable level or that we will be able to pass on to our customers the increased costs of our raw materials without affecting demand, or that limited availability of materials will not impact our production capabilities. Our inability to raise the price of our products in response to increases in prices of raw materials or to maintain a proper supply of raw materials could have an adverse effect on our revenue, operating profit, and net income.

In addition, during the years ended December 31, ~~2024~~ 2025 and ~~2023~~2024, approximately 8255% and 7082%, respectively, of inventory purchases were made from foreign suppliers in Asia. Our dependence on a limited number of key third-party manufacturers and suppliers exposes us to challenges and risks in ensuring that we maintain adequate supplies required to produce our batteries. We do not have long-term purchase arrangements with our third-party manufacturers and ~~our purchases~~generally ~~are completed~~ transact on a purchase order basis. Thus, although we carefully manage our inventory and lead times, we may ~~experience a~~face ~~delay~~challenges orobtaining ~~disruption~~favorable pricing, inconsistent ~~our~~quality ~~supply~~specifications, ~~chain~~ and~~/or~~ ~~our~~sufficient ~~current~~quantities ~~suppliers~~of ~~may not continue to provide us with~~ lithium-ion batteries ~~in our required quantities or to our required specifications~~ and ~~quality~~other ~~levels~~materials orfrom atthese ~~attractive prices~~suppliers. Our close working relationships with our foreign suppliers to date, reflected in our ability to increase our purchase order volumes (qualifying us for related volume-based discounts) and to order and receive delivery of components in advance of required demand, has helped us moderate or offset increased supply-related costs associated with inflation, currency fluctuations, and tariffs imposed on our battery imports by the U.S. government. However, if we are unable to enter into or maintain commercial arrangements with these suppliers on favorable terms, ~~or if any of these suppliers experience unanticipated delays, disruptions or shutdowns or other difficulties ramping up their supply of products or materials to meet~~ our ~~requirements, our~~ assembly operations and customer deliveries would be seriously impacted, potentially resulting in ~~liquidated~~contractual ~~damages~~penalties or other liabilities and harm to our customer relationships. Although we believe we could locate alternative suppliers to fulfill our needs, we may be unable to find a sufficient alternative supply in a reasonable time or on commercially reasonable terms.

1514

Further, our dependence on these third-party suppliers entails additional risks, including:

·● inability, failure, or unwillingness of third-party suppliers to comply with regulatory requirements;

·● breach of supply agreements by the third-party supplies;

·● misappropriation or disclosure of our proprietary information, including our trade secrets and know-how;

·● relationships that third-party suppliers may have with others, which may include our competitors, and failure of third-party suppliers to adequately fulfill contractual duties, resulting in the need to enter into alternative arrangements, which may not be available, desirable, or cost-effective; and

·● termination or non-renewal of agreements by third-party suppliers at times that are costly or inconvenient for us.

Several of our key manufacturers and suppliers are located in China, and we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations of the United States or Chinese governments, as well as political unrest or unstable economic conditions in China. For example, trade tensions between the United States and China have been escalating in recent years. Notably, the lithium-ion battery industry has been subjected to tariffs implemented by the United States government on goods imported from China. There is an ongoing risk of new or additional tariffs being ~~put~~imposed ~~in place~~ on lithium-ion batteries or related parts which would significantly increase our cost of goods sold, which could require us to increase prices to our customers or, if we are unable to do so, result in lower gross margins on the products sold by us. In addition, these tariffs could make our products less competitive than those of our competitors whose inputs are not subject to these tariffs. These U.S. tariff impositions against Chinese exports have been followed by a round of retaliatory Chinese tariffs on U.S. exports to China. ~~The imposition of additional tariffs by the United States could trigger the adoption of tariffs by other countries as well.~~ Any resulting escalation of trade tensions, including a “trade war,” could have a significant adverse effect on world trade and the world economy, as well as on our results of operations. At this time, we cannot predict ~~how~~whether ~~such~~additional ~~enacted~~ tariffs ~~will~~ ~~impact~~or ~~our~~trade ~~business.~~restrictions Wewill ~~may~~be ~~otherwise~~imposed ~~experience supply disruptions~~ or ~~delays,~~the ~~and although we carefully manage our inventory and~~extent ~~lead-times,~~to ~~our~~which ~~suppliers~~they may ~~not~~impact ~~continue to provide us with battery components in~~ our ~~required quantities, to our required specifications and quality levels or at attractive prices~~business.

~~Further~~In addition, ~~we may be unable to control price fluctuations~~U.S. ~~for~~trade ~~these~~policy ~~components~~has orbeen ~~negotiate~~subject ~~supply~~to ~~arrangements~~significant onvolatility ~~favorable~~in ~~terms~~recent ~~to us~~years. WeFor ~~may~~example, ~~also be exposed to fluctuations~~ in ~~the~~February ~~value~~2026, of the U.S. ~~dollar~~Supreme ~~relative~~Court toruled that the ~~Renminbi~~IEEPA ~~with~~does ~~any~~not ~~appreciation~~authorize in the ~~value~~President ofto ~~the~~impose ~~Renminbi~~tariffs, ~~increasing~~invalidating ~~our~~certain ~~costs~~tariffs ~~for~~imposed ~~lithium-ion~~under ~~batteries~~that authority. However, tariffs and other ~~raw~~trade ~~materials~~restrictions ~~sourced~~may ~~from~~continue ~~China.~~to ~~Substantial~~be ~~increases~~imposed inunder ~~the~~other ~~prices~~statutory ~~for~~authorities ~~our~~or ~~lithium-ion~~through ~~batteries~~future ~~and~~legislation. ~~other raw materials~~Any ~~would~~new ~~increase~~tariffs ~~our~~or ~~operating~~increases ~~costs~~in ~~and~~existing ~~negatively~~tariffs ~~impact~~on ~~our~~battery ~~results~~components ofor ~~operations.~~raw Inmaterials ~~addition,~~could ~~foreign~~increase ~~currency~~our ~~fluctuations~~cost ~~relative to the value~~ of ~~the~~goods ~~U.S.~~sold ~~dollar~~and ~~could~~ adversely affect ~~the price of components and materials used in~~ our ~~batteries~~business and ~~sourced~~results ~~from~~of ~~countries other than the United States~~operations.

~~Increases~~Further, inwe ~~costs,~~may ~~disruption~~be unable ofto ~~supply~~control price fluctuations for these components or negotiate supply arrangements on favorable terms to us. We may also be exposed ~~shortage~~to fluctuations in the value of the U.S. dollar relative to the Renminbi with any appreciation in the value of the Renminbi increasing our ~~battery~~costs ~~components,~~for ~~such~~lithium-ion asbatteries ~~electronic~~and other raw materials sourced from China. Substantial increases in the prices for our lithium-ion batteries and ~~mechanical~~other ~~parts~~raw materials would increase our operating costs and negatively impact our results of operations. In addition, orforeign currency ~~raw~~fluctuations relative to the value of the U.S. dollar could affect the price of components and materials used in our batteries and sourced from countries other than the ~~production~~United States. Demand for lithium-ion batteries and other raw materials used in our products may also increase as a result of ~~such~~growing ~~parts~~global demand from EV and energy storage industries, which could ~~harm~~further ~~our~~increase ~~business~~the cost or reduce the availability of these materials.

From time to time, we may experience increases in the cost or a sustained interruption in the supply or shortage of battery components. For example, a global shortage and component supply disruptions of electronic battery components are currently being reported, and the full impact to us is yet unknown. Other examples of shortages and component supply disruptions could include the supply of electronic components and raw materials (such as resins and other raw metal materials) that go into the production of our battery components. Any such cost increase or supply interruption could materially and negatively impact our business, prospects, financial condition and results of operations.15

16Increases in costs, disruption of supply, or shortage of any of our battery components such as electronic and mechanical parts could harm our business.

~~The~~From ~~prices~~time ~~for~~to ~~our~~time, we may experience increases in the cost or a sustained interruption in the supply or shortage of battery components. ~~fluctuate~~Supply ~~depending~~chain disruptions onand ~~market~~component ~~conditions~~shortages have occurred in the past and ~~global~~may occur in the future due to a variety of factors, including geopolitical events, trade policies and tariffs, manufacturing concentration, transportation disruptions, labor shortages, public health events, and demand-supply imbalances in specific component categories. The timing, duration and ~~could~~magnitude ~~adversely~~of any such disruptions are uncertain and may vary by component type. For example, shortages could affect the supply of electronic components used in the manufacture of our battery components. Any such cost increase or supply interruption could materially and negatively impact our business, prospects, financial condition and results of operations. ~~For~~ ~~instance~~In addition, although we ~~are~~carefully ~~exposed~~manage toour ~~multiple~~inventory ~~risks~~and ~~relating~~supplier lead times, our suppliers may not continue to ~~price~~provide ~~fluctuations~~us ~~for~~with battery ~~cells.~~components ~~These~~in ~~risks~~the ~~include~~quantities we require, ~~but~~to ~~are~~our ~~not~~required ~~limited~~specifications and quality standards, or at commercially ~~to:~~reasonable prices.

· supply shortages caused by the inability or unwillingness of suppliers and their competitors to build or operate component production facilities to supply the numbers of battery components requires to support the rapid growth of the electric RV and marine component vehicle industry and other industries in which we operate as demand for such components increases;

· disruption in the supply of electronic circuits due to quality issues or insufficient raw materials

· a decrease in the number of manufacturers of battery components; and

· an increase in the cost of raw materials.

We are dependent on the continued supply of battery components for our products. Any disruption in the supply of battery components could temporarily disrupt production of our products by our third-party manufacturers until a different supplier is fully qualified. The cost of our battery products depends in part upon the prices and availability of raw materials such as lithium, nickel, cobalt, and/or other metals which are used to produce battery components. Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers and thus we may have limited control over the agreed pricing for these raw materials and battery components. The prices for these materials fluctuate and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result of increased global production of electric vehicles and energy storage products. Furthermore, fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges. Any reduced availability of these raw materials or substantial increases in the prices for such materials may increase the cost of our components and consequently, the cost of our products. There can be no assurance that we will be able to recoup increasing costs of our components by increasing prices, which in turn could damage our brand, business, prospects, financial condition and results of operations.

Our business and future growth depends on the needs and success of our customers.

Our customers include dealers, wholesalers, private-label customers and OEMs. The demand for our products ultimately depends on consumers in our current end markets (primarily owners of RVs and marine vessels). These markets can be impacted by numerous factors, including, consumer spending, travel restrictions, fuel costs and energy demands (including an increasing trend towards the use of green energy) and overall economic conditions. Increases or decreases in these variables may significantly impact the demand for our products. If we fail to accurately predict demand, we may be unable to meet our customers’ needs, resulting in the loss of potential sales, or we may produce excess products, resulting in increased inventory and overcapacity in our production facilities, increasing our unit production cost and decreasing our operating margins.

We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in ~~2024~~2025 and ~~2023~~2024.

We currently derive a significant portion of our revenue from a limited number of customers. Sales to ~~one~~four ~~customer~~customers totaled approximately 1460% of our gross sales during the year ended December 31, ~~2024~~2025, and ~~four~~these ~~other~~ customers had accounts receivable balances representing 6069% of our total accounts receivable as of December 31, ~~2024~~ 2025. During the year ended December 31, ~~2023~~2024, sales to ~~two~~one ~~customers~~customer ~~totaled~~represented approximately 2114% of our gross sales, and four other customers had accounts receivable balances representing 9260% of total accounts receivable as of December 31, ~~2023~~ 2024. There are inherent risks whenever a large percentage of gross sales are concentrated with a limited number of customers. In addition, most of our sales are completed on a purchase order basis and most are without firm, long-term revenue commitments or sales arrangements. It is not possible for us to predict the future level of demand for our products and services that will be generated by our customers or the future demand for the products and services of our other customers. If any of our customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our products which could have an adverse effect on our margins and financial position and could negatively affect our revenue and results of operations and/or trading price of our common stock. Furthermore, there is inherent risk associated with accounts receivable concentration as a deterioration in the financial condition of a limited number of account debtors, or any other factor which affects their ability or willingness to pay could in turn have a material adverse effect on our financial condition.

We may not be able to successfully manage our growth.

We have been continuously expanding our operations since our founding in 2016. As we continue to grow, we must continue to improve our managerial, technical and operational knowledge and allocation of resources, and to implement an effective management information system. To effectively manage our expanded operations, we need to continue to recruit and train managerial, accounting, internal audit, engineering, assembly and manufacturing, technical, sales , and other staff to satisfy our development requirements and there are currently significant labor shortages in the market. In order to fund our ongoing operations and our future growth, we need to have sufficient internal sources of liquidity or access to additional financing from external sources. Furthermore, we will be required to manage relationships with a greater number of customers, suppliers, contractors, service providers, lenders and other third parties. We will need to further strengthen our internal control and compliance functions to ensure that we are able to comply with our legal and contractual obligations and to reduce our operational and compliance risks. We cannot assure you that we will not experience issues such as capital constraints, construction delays, operational difficulties at new locations, or difficulties in expanding our existing business and operations and in recruiting and training an increasing number of personnel to manage and operate the expanded business. Our expansion plans may also adversely affect our existing operations and thereby have a material adverse effect on our business, prospects, financial condition and results of operations.

Our results of operations may be negatively impacted by public health epidemics or outbreaks.

We are exposed to risks associated with public health crises, ~~and~~ epidemics or pandemics., Aand other widespread ~~health~~disruptions ~~crisis~~that could adversely affect the global economy, ~~resulting~~supply inchain, ~~an economic downturn that could impact our operations~~ and demand for our products ~~and therefore have a material adverse effect on our business and results of operations~~. For example, the COVID-19 global pandemic adversely impacted our operations, supply chains, and distribution systems as well as those of our third-party suppliers and manufacturers, ~~which~~and ~~are~~similar ~~located~~disruptions could occur in the ~~United~~future ~~States,~~due ~~Asia~~to ~~and~~other ~~Europe~~public health events or comparable global disruptions. A future public health epidemic or outbreak may make it more difficult for us and our third-party manufacturers to find sufficient components or raw materials and component parts on a timely basis or at a cost-effective price. Any performance failure on the part of any of our significant suppliers or third-party manufacturers could interrupt production of our products, which would have a material adverse effect on our business, financial condition and results of operations. In addition, during the pandemic we experienced shortages and workforce slowdowns due to stay-at-home mandates, illness among our workforce, delays in shipping finished products to customers, and delays in our receiving batteries and certain components. The highly competitive labor market made it difficult to recruit and maintain a workforce properly sized and suited for our ~~operational~~ operational and strategic needs, which further adversely impacted our business, and any future incidence of disease could similarly impact our business. In addition, while the pandemic positively impacted our battery sales due to more consumers adopting the RV lifestyle, there is no guarantee that any such increase would be sustained, which could cause our results of operations to fluctuate.

If we fail to expand our sales and distribution channels, our business could suffer.

Our success, and our ability to increase sales and operate profitably, depends on our ability to identify target customers and convert these customers into meaningful orders, as well as our continued development of existing customer relationships. If we are unable to expand our sales and distribution channels, we may not be able to increase revenue or achieve market acceptance of our products. WeThe ~~are~~company ~~expanding~~may ~~our~~expand its direct sales force ~~and~~by ~~plan~~recruiting ~~to recruit~~ additional sales personnel. ~~New~~Newly-hired sales personnel will require training and may take time to achieve full productivity,. ~~and~~The ~~there~~Company isoperates ~~strong competition~~in a competitive market for ~~qualified~~experienced sales ~~personnel~~professionals, inwhich ~~our~~may ~~business~~impact recruiting efforts. In addition, we believe our future success is dependent upon establishing successful relationships with a variety of distribution partners. To date, we have entered into agreements with only a small number of these distribution partners. We cannot be certain that we will be able to reach agreement with additional distribution partners on a timely basis or at all, or that these distribution partners will devote adequate resources to selling our products. Furthermore, if our distribution partners fail to adequately market or support our products, the reputation of our products in the market may suffer. In addition, we will need to manage potential conflicts between our direct sales force and any third-party reselling efforts. There can be no assurances that any of our efforts to expand our sales and distribution channels will be successful.

Our ability to expand into international markets is uncertain.

Our strategy is to expand our operations into international markets. In addition to general risks associated with international expansion, such as foreign currency fluctuations and political and economic instability, we face the following risks and uncertainties any of which could prevent us from selling our products in a particular country or harm our business operations once we have established operations in that country:

the difficulties and costs of localizing products for foreign markets;
the need to modify our products to comply with local requirements in each country; and
our lack of a direct sales presence in other countries, our need to establish relationships with distribution partners to sell our products in these markets and our reliance on the capabilities and performance of these distribution partners.

If we are unable to expand into international markets in the manner expected, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Nearly all of our raw materials enter the United States through a limited number of ports and we rely on third parties to store and ship some of our inventory; labor unrest at these ports or other product deliver difficulties could interfere with our distribution plans and reduce our revenue.

We currently rely exclusively on foreign manufacturers to manufacture the lithium-ion batteries used as raw materials in our products, as well as certain other of our raw materials. We may suffer delays in receiving raw materials due to work stoppages, strikes or lockouts or other bottlenecks at the ports through which our raw materials are shipped. Likewise, we rely on trucking carriers to deliver products from the port of arrival to our distribution facilities and from our distribution facilities to our customers. Additionally, in some cases, third parties sort, store, and direct-ship products to our customers. Labor unrest or other disruptions could result in product shortages and delays in distributing our products to retailers, which could materially and adversely affect our business, financial condition, results of operations, and prospects.

The uncertainty in global economic conditions could negatively affect our results of operations.

Our results of operations are directly affected by the general global economic conditions of the industries in which our major customer groups operate. Our business is also highly dependent on the economic and market conditions in each of the geographic areas in which we operate. Our products are heavily dependent on the end markets that we serve and our results of operations will vary by location, depending on the economic environment in these markets. Sales of our RV and marine power products, for example, depend significantly on demand for new electric products for RVs and marine applications, which, in turn, depends on end-user demand for RVs and boats. We are actively expanding our product offerings and customer base into industrial, commercial, construction, surveillance, remote monitoring, and other adjacent markets in an effort to diversify revenue sources and reduce reliance on the RV and marine end markets; however, these efforts may not offset fluctuations in our core markets. The uncertainty in global economic conditions varies by geographic location and can result in substantial volatility in global credit markets, particularly in the United States. These conditions, including levels of consumer spending, economic recessions, slow economic growth, economic and pricing instability, inflation levels, increase of interest rates, credit market volatility and adverse developments affecting financial institutions, could affect our business by reducing prices that our customers may be able or willing to pay for our products or by reducing the demand for our products. In addition, the Russia-Ukraine war and the Israel-Palestine conflict has and may continue to further exacerbate disruptions in the global supply chain. As a result of sanctions imposed in relation to the Russia-Ukraine conflict, gas prices in the United States have risen to historic levels, and geopolitical tensions in the Middle East have impacted global shipping routes. Any rise in the cost of fuel may cause a decrease in RV travel, which could ultimately negatively impact sales of our batteries for RVs. We have also historically experienced increased shipping costs as a result of increased fuel costs and shutdowns at the ports through which our lithium-ion batteries and other raw materials are shipped, and such costs could adversely impact our results of operations in future periods. Any of the above factors could, in turn, negatively impact our sales and earnings generation and result in a material adverse effect on our business, cash ~~flow~~flows, results of operations, and financial position.

Government reviews, inquiries, investigations, and actions could harm our business or reputation.

As we operate in various locations around the world, our operations in certain countries are subject to significant governmental scrutiny and may be adversely impacted by the results of such scrutiny, including regulations relating to environmental compliance, hazardous materials, product safety, and international trade. The regulatory environment with regard to our business is evolving, and officials often exercise broad discretion in deciding how to interpret and apply applicable regulations. From time to time, we receive formal and informal inquiries from various government regulatory authorities, as well as self-regulatory organizations, about our business and compliance with local laws, regulations or standards. Any determination that our operations or activities, or the activities of our employees, are not in compliance with existing laws, regulations or standards could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor, customer or other third-party relationships, termination of necessary licenses and permits, or similar results, all of which could potentially harm our business and/or reputation. Even if an inquiry does not result in these types of determinations, regulatory authorities could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business, and it potentially could create negative publicity which could harm our business and/or reputation.

1918

We are currently, and will likely continue to be, dependent on ~~our~~a ~~two~~limited number of warehouse facilities. If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted.

We have atwo adjacent warehouse ~~location~~facilities in Redmond, Oregon and ~~another~~ a third warehouse facility in Elkhart, Indiana, which support the storage, assembly, and distribution of our products.

Our facilities may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, flooding, fire and power outages, utility and transportation infrastructure disruptions, acts of war or terrorism, or by public health crises, which may render it difficult or impossible for us to assemble our products for an extended period of time. The inability to produce our products or the backlog that could develop if any of our facilities is inoperable for even a short period of time may result in increased costs, harm to our reputation, a loss of customers or a material adverse effect on our business, financial condition or results of operations. Although we maintain property damage and business interruption insurance, this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, if at all.

Our long-term target is to onshore the manufacturing of most of our components and assemblies, including cell manufacturing, to the United States. Our plans for expansion may experience delays, incur additional costs, or cause disruption to our existing production lines. The costs to successfully achieve our expansion goals may be greater than we expect, and we may fail to achieve our anticipated cost efficiencies, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, while we are generally responsible for delivering products to the customer, we do not maintain our own fleet of delivery vehicles and outsource this function to third parties. Any shortages in trucking capacity, any increase in the cost thereof or any other disruption to the highway systems could limit our ability to deliver our products in a timely manner or at all.

Lithium-ion battery cells have been observed to catch fire or release smoke and flame, which may have a negative impact on our reputation and business.

Our lithium-ion batteries use LiFePO4 as the cathode material for lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by releasing smoke and flames in a manner that can ignite nearby materials and other lithium-ion cells. This ~~faulty result~~ could subject us to lawsuits, ~~product~~ product recalls, or redesign efforts, all of which would be time-consuming and expensive. Further, negative public perceptions regarding the suitability or safety of lithium-ion cells or any future incident involving lithium-ion cells, such as a vehicle or other fire, even if such incident does not involve our products, could seriously harm our business and reputation.

To facilitate an uninterrupted supply of lithium-ion batteries, we store a significant number of lithium-ion batteries at our facilities. Any mishandling, other safety issue, or fire related to the cells or batteries could disrupt our operations. In addition, any accident, whether occurring at our facilities or from the use of our batteries, may result in significant production interruption, delays or claims for substantial damages caused by personal injuries or property damage. Such damage or injury could lead to adverse publicity and potentially a product recall, which could have a material adverse effect on our brand, business, financial condition and results of operations.

We could face product liability or warranty claims relating to our products, including the components thereof, which could reduce market adoption, result in reputation damage, and result in significant costs and liabilities, which would reduce our profitability.

Our product offerings and energy storage solutions, which are complex, could contain design- or manufacturing-related defects, or may not operate at expected performance levels. We face an inherent business risk of exposure to product liability claims in the event that the use of any of our products results in personal injury or property damage. In the event that any of our products prove to be defective, we may be required to recall or redesign such products, which would result in significant unexpected costs. Any insurance we maintain may not be available on terms acceptable to us or such coverage may not be adequate for liabilities actually incurred. Further, any claim or product recall could result in adverse publicity against us, which could adversely affect our sales or increase our costs.

2019

InWe ~~the~~are ~~event~~also exposed to potential liability and product performance warranty risks that ~~any~~are inherent in the design, assembly, manufacture, and sale of our products. ~~prove~~We tosell ~~be defective,~~the wemajority ~~may~~of beour ~~required~~products to ~~recall~~customers with conditional repair or ~~redesign~~replacement ~~such~~warranties. Expion360-branded products, are ~~which~~warrantied ~~would~~for ~~result~~up into ~~significant~~twelve ~~unexpected~~years ~~costs~~from the date of sale. ~~Any~~As ~~insurance~~a result, we bear the risk of warranty claims long after we have sold ~~maintain~~the product and recognized revenue. In addition, under real-world operating conditions, which may ~~not~~vary beby ~~available~~location onand ~~terms~~design, ~~acceptable~~as towell as usenvironmental orconditions, ~~such~~our ~~coverage~~products may ~~not~~perform bein ~~adequate~~a ~~for~~different ~~liabilities~~way ~~actually~~than ~~incurred~~under standard test conditions or other failure data sets. We ~~Further~~depend significantly on our reputation for safety and reliability and high-quality products and services, exceptional customer service, ~~any~~and ~~claim~~our brand name to attract new customers and maintain our current customers, and grow our business. If our products do not perform as anticipated or we experience unexpected reliability problems or widespread product ~~recall~~failures, our brand and market reputation could be ~~result~~significantly inimpaired ~~adverse~~and ~~publicity~~we ~~against~~may uslose, or be unable to gain or retain, customers which could ~~adversely~~impact ~~affect~~ our ~~sales~~business orand ~~increase~~results ~~our~~of ~~costs~~operations.

We ~~are~~have ~~also~~been ~~exposed~~ required to ~~potential~~make ~~liability~~assumptions and ~~product performance~~apply ~~warranty~~judgments, ~~risks~~including ~~that are inherent in~~ the ~~design,~~durability ~~assemble, manufacture~~ and ~~sale~~reliability of our products~~. We sell the majority of our products to customers with conditional repair or replacement warranties. For example~~, ~~our~~regarding ~~branded~~their DCperformance ~~mobile~~over ~~chargers are warrantied for~~the ~~two~~estimated ~~years~~warranty ~~from~~period ~~the date of sale,~~ and ~~our~~the ~~branded~~anticipated ~~VPR~~number ~~4EVER Classic~~ and ~~Platinum~~value ~~batteries~~of ~~are~~warranty ~~warrantied~~claims. atWe ~~gradually~~have ~~lesser levels over~~ a ~~12-year~~relatively ~~period~~limited ~~from~~operating ~~date~~history ofand must ~~sale.~~project Ashow aour ~~result,~~offerings wewill ~~bear~~perform over the ~~risk~~estimated of warranty ~~claims~~period ~~long~~and ~~after~~the weestimated ~~have~~reserve ~~sold~~may ~~the~~have ~~product~~material ~~and~~changes. ~~recognized~~Historically, ~~revenue.~~there Inhave ~~addition,~~been ~~under~~very ~~real~~few ~~world~~claims ~~operating~~and ~~conditions,~~the ~~which~~costs ~~may~~associated ~~vary~~with byrepairs or ~~location~~replacement ~~and~~parts ~~design,~~associated aswith ~~well~~those asclaims ~~environmental~~have ~~conditions,~~been ~~our~~nominal ~~products~~so ~~may~~we ~~perform~~expense inwarranty aclaims ~~different~~as ~~way~~occurred ~~than~~and ~~under~~do ~~standard~~not ~~test~~accrue ~~conditions~~an orallowance. ~~other~~Our ~~failure~~assumptions ~~data~~could ~~sets.~~prove Weto ~~depend~~be ~~significantly~~materially ondifferent ~~our~~from ~~reputation~~the ~~for~~actual ~~safety~~performance ~~and~~of ~~reliability~~our ~~and high-quality~~ products ~~and services~~, ~~exceptional~~causing ~~customer~~us ~~service,~~to ~~and~~incur ~~our~~substantial ~~brand~~expense ~~name~~ to ~~attract~~ ~~new~~repair ~~customers~~or ~~and~~replace ~~maintain~~defective ~~our~~products ~~current~~in ~~customers,~~the ~~and grow our business~~future. An Ifincrease in our ~~products~~estimates doof ~~not~~future ~~perform~~warranty asobligations ~~anticipated~~could orcause weus ~~experience unexpected~~to ~~reliability~~increase ~~problems~~the oramount ~~widespread~~of ~~product~~warranty ~~failures,~~obligations. If our ~~brand~~warranty reserves ~~and~~are ~~market~~inadequate ~~reputation~~to ~~could~~cover befuture ~~significantly~~warranty ~~impaired~~claims ~~and~~on ~~we may~~our ~~lose,~~energy orstorage ~~be unable to gain or retain~~products, ~~customers which could impact~~ our ~~business~~financial condition and results of operations could be adversely affected.

We have been required to make assumptions and apply judgments, including the durability and reliability of our products, regarding their performance over the estimated warranty period and our anticipated rate of warranty claims. We have a relatively limited operating history and must project how our offerings will perform over the estimated warranty period and the estimated reserve may have material changes. Historically, there have been very few claims and costs for repairs or replacement parts have been nominal. However, warranty reserves include our management’s best estimates of the projected costs to repair or replace items under warranty, which is based on estimated failure rates. Our assumptions could prove to be materially different from the actual performance of our products, causing us to incur substantial expense to repair or replace defective products in the future. An increase in our estimates of future warranty obligations could cause us to increase the amount of warranty obligations. If our warranty reserves are inadequate to cover future warranty claims on our energy storage products, our financial condition and results of operations could be adversely affected.

Our operations expose us to litigation, tax, environmental and other legal compliance risks.

We are subject to a variety of litigation, tax, environmental, health and safety and other legal compliance risks. These risks include, among other things, possible liability relating to product liability matters, personal injuries, intellectual property rights, contract-related claims, government contracts, taxes, health and safety liabilities, environmental matters, and compliance with competition laws and laws governing improper business practices. We could be charged with wrongdoing as a result of such matters. If convicted or found liable, we could be subject to significant fines, penalties, repayments, or other damages (in certain cases, treble damages). In the area of taxes, changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance could materially impact our tax ~~receivables and~~ liabilities and our deferred tax assets and tax liabilities.

We plan to manufacture lithium-ion batteries in the future which involves processing, storing, disposing of, and otherwise moving large amounts of hazardous materials, and federal, state, and local regulations impose significant environmental requirements on the manufacturing, storage, transportation, and disposal of various components of advanced energy storage systems. As a result, we will be subject to extensive and changing environmental, health and safety laws, and regulations governing, among other things, the generation, handling, storage, use, transportation and disposal of hazardous materials; remediation of polluted ground or water; emissions or discharges of hazardous materials into the ground, air or water; and the health and safety of our employees. Although we believe our operations are in material compliance with applicable environmental regulations, there can be no assurance that changes in such laws and regulations will not impose costly compliance requirements on us or otherwise subject us to future liabilities. Our ongoing compliance with environmental, health and safety laws, regulations, and permits could require us to incur significant expenses, limit our ability to modify or expand our facilities or continue production, and require us to install additional pollution control equipment and make other capital improvements. In addition, private parties, including employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our products.

21Certain environmental laws assess liability on owners or operators of real property for the cost of investigation, removal, or remediation of hazardous substances at their current or former properties or at properties at which they have disposed of hazardous substances. These laws may also assess costs to repair damage to natural resources. We may be responsible for remediating damage to our properties caused by former owners by our existing operations or by our future operations.

Certain environmental laws assess liability on owners or operators of real property for the cost of investigation, removal or remediation of hazardous substances at their current or former properties or at properties at which they have disposed of hazardous substances. These laws may also assess costs to repair damage to natural resources. We may be responsible for remediating damage to our properties caused by former owners by our existing operations or by our future operations.20

Changes in environmental and climate laws or regulations could lead to new or additional investment in production designs and could increase environmental compliance expenditures. For example, federal and state regulators, including the United States Environmental Protection Agency, ~~has~~have promulgated and ~~regulations~~may ~~applicable~~continue to ~~projects~~promulgate ~~involving~~regulations relating to greenhouse gas emissions ~~above~~, ahazardous ~~certain~~air ~~threshold~~pollutants, ~~and~~energy ~~the~~use, ~~United~~and ~~States~~climate-related reporting and ~~certain~~compliance ~~states~~obligations. ~~within~~In addition, the United States and certain states have enacted, or are considering, limitations on greenhouse gas emissions, carbon pricing mechanisms, and other climate-related regulatory measures that could affect manufacturing, supply chains, energy costs, or capital expenditures.

Changes in climate change concerns, or in the regulation of such concerns, including greenhouse gas emissions, could subject us to additional costs and restrictions, including increased energy and raw materials costs. Additionally, we cannot assure you that we have been or at all times will be in compliance with environmental laws and regulations or that we will not be required to expend significant funds to comply with, or discharge liabilities arising under, environmental laws, regulations and permits, or that we will not be exposed to material environmental, health or safety litigation.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in the jurisdictions in which we conduct or in the future may conduct activities, including, the U.S. Foreign Corrupt Practices Act (the “FCPA”). The FCPA generally prohibits companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. The FCPA applies to companies, individual directors, officers, employees, and agents. Under the FCPA, U.S. companies may be held liable for actions taken by strategic or local partners or representatives. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments. Our policies mandate compliance with these antibribery laws. Despite meaningful measures that we undertake to facilitate lawful conduct, which include training and internal control policies, these measures may not always prevent reckless or criminal acts by our employees or agents as we expand our operations from the United States domestically to abroad. As a result, we could be subject to criminal and civil penalties, disgorgement, further changes or enhancements to our procedures, policies and controls, personnel changes or other remedial actions. Violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction and result in a material adverse effect on our competitive position, results of operations, cash flows or financial condition.

Our failure to introduce new products and product enhancements that respond to customer and end consumer demand, and any broad market acceptance of new technologies introduced by our competitors, could adversely affect our business.

Our success will depend on our ability to develop new products and capabilities that respond to consumer demand, industry trends, or developments by our competitors. There is no assurance that we will be able to successfully develop new products and capabilities that adequately respond to these forces. In addition, many new energy storage technologies have been introduced over the past several years. For certain important and growing markets, such as aerospace and defense, lithium-based battery technologies have a large and growing market share. Our ability to achieve significant and sustained penetration of key developing markets, including the RV, marine, and ~~home~~industrial ~~energy~~ markets, will depend upon our success in developing or acquiring these and other technologies, either independently, through joint ventures, or through acquisitions, which in each case may require significant capital. In addition, new product introductions and technologies are risky, and may suffer from a lack of market acceptance, delays in related product development and failure of new products to operate properly. Any failure by us to successfully launch new products, or a failure by us to meet our customers’ criteria in order to accept such products, could adversely affect our results. If we fail to develop or acquire, assemble and manufacture and sell, products that satisfy our customers’ demands, or we fail to respond effectively to new product announcements by our competitors by quickly introducing competitive products, then we may fail to maintain our competitive position in our markets, and our business and financial condition could be adversely affected. We cannot assure you that our portfolio of primarily lithium-ion products will remain competitive with products based on new technologies.

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We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims.

We rely on a combination of copyright, trademark, patent and trade secret laws, non-disclosure agreements, and other confidentiality procedures and contractual provisions to establish, protect, and maintain our proprietary intellectual property and technology and other confidential information. Certain of these technologies, especially battery case construction, are important to our business and are not protected by patents, and certain assets of our technology may not be protected by issued patents and instead rely on trade secret protection and other contractual safeguards. Despite our efforts to protect our proprietary intellectual property and technology and other confidential information, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property and proprietary technologies. If we are unable to protect our intellectual property and technology, we may lose our competitive position or any technological advantage we ~~currently enjoy and~~ may behave ~~required to take an impairment charge with respect to the carrying~~developed, ~~value~~and ~~of such intellectual property or goodwill established in connection with the acquisition thereof. In either case,~~ our results of operations and net income may be adversely affected. In addition, entities holding intellectual property rights relating to our technology may bring suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. Any such litigation or claims, whether or not valid or successful, could result in substantial costs and diversion of resources and our management’s attention. If we are determined to have infringed upon a third-party’s intellectual property rights, we may have to pay substantial damages, obtain a license, or cease making certain products, which in turn could have a material adverse effect on our business, results of operations , and financial condition.

Quality problems with our products could harm our reputation and erode our competitive position.

The success of our business will depend upon the quality of our products and our relationships with customers. In the event that our products fail to meet our customers’ standards, our reputation could be harmed, which would adversely affect our marketing and sales efforts. We cannot assure you that our customers will not experience quality problems with our products.

Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations, and may cause unanticipated liabilities.

As part of our growth strategy, we may make future investments in businesses, new technologies, services, and other assets that complement our business. Future acquisitions may involve the issuance of our equity securities as payment, in part or in full, for the businesses or assets acquired. Any future issuances of equity securities would dilute stockholder ownership interests. In addition, future acquisitions might not increase, and may even decrease, our earnings or earnings per share and the benefits derived by us from an acquisition might not outweigh or might not exceed the dilutive effect of the acquisition. We also may incur additional debt or suffer adverse tax and accounting consequences in connection with any future acquisitions.

If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed.

We and our business partners maintain significant amounts of data electronically in locations around the world. This data relates to all aspects of our business, including current and future products and services under development, and also contains certain customer, supplier, partner, and employee data. Our ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our information technology systems, which support our operations. We maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyberattacks, tampering, theft, misplaced or lost data, programming and/or human errors that could compromise the integrity and privacy of this data, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes, and operational disruptions, which in turn could adversely affect our reputation, competitiveness, and results of operations. High-profile security breaches at other companies and in government agencies have increased in recent years, and cyber-attacks are becoming more sophisticated and frequent, and in some cases have caused significant harm. Computer hackers and others routinely attempt to breach the security of technology products, services and systems, and to fraudulently induce employees, customers, or others to disclose information or unwittingly provide access to systems or data. While we devote significant resources to security measures to protect our systems and data, these measures cannot provide absolute security.

2322

In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business. While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, nonetheless those partners may also be subject to data intrusion or otherwise compromise the protection of such data. Any compromise of the confidential data of our customers, suppliers, partners, employees , or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our information technology systems or other means could substantially disrupt our operations, harm our customers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and result in a loss of business that could be material. We operate a number of critical computer systems throughout our business that can fail for a variety of reasons. If such a failure were to occur, we may not be able to sufficiently recover from the failure in time to avoid the loss of data or any adverse impact on certain of our operations that are dependent on such systems. This could result in lost sales and the inefficient operation of our facilities for the duration of such a failure.

Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings.

Our business and operations may consume resources faster than we anticipate. In the future, we may need to raise additional funds through the issuance of new equity securities, debt, or a combination of both or by entering into credit facilities or securing other types of financing. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to fund our capital requirements. Further, we may be restricted in our ability to access existing sources of liquidity.

In addition, actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, transactional counterparties, or other companies in the financial services industry oras ~~the~~well ~~financial~~as ~~services~~concerns ~~industry~~or ~~generally~~rumors regarding such events, orcould ~~concerns~~adversely affect orthe ~~rumors~~financial ~~about~~services ~~any~~industry ~~events~~generally ofand ~~these~~our ~~kinds or~~liquidity ~~other~~and ~~similar~~financial ~~risks~~condition. If banks or financial institutions enter receivership or become insolvent in response to financial conditions affecting the banking system and financial markets, our ability to raise additional financing or to access our existing cash, cash equivalents and investments may be threatened.

If we incur new debt, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities, existing stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.

We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business.

Our success depends in part on our ability to attract, retain, and motivate senior management and other key employees. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, competitors’ hiring practices, cost reduction activities, and the effectiveness of our compensation programs. Competition for qualified personnel can be very intense. We must continue to recruit, retain, and motivate senior management and other key employees sufficient to maintain our current business and support our future projects. We are vulnerable to attrition among our current senior management team and other key employees. A loss of any such personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations. ~~For~~ ~~example,~~In ~~John Yozamp~~2025, ~~our~~certain ~~co-founder,~~members ~~former~~of ~~Chief~~our ~~Business~~senior ~~Development~~leadership ~~Officer~~team departed, and ~~former~~we ~~Chief~~appointed ~~Executive~~new ~~Officer~~executive officers, ~~pioneered~~including ~~multiple new~~internal ~~recreational~~promotions ~~concepts~~to in the RVChief ~~industry~~Financial Officer and ~~leveraged~~Chief ~~extensive~~Operating ~~relationships~~Officer inroles. ~~the~~Although RVthese ~~OEM~~executives ~~business to establish our company. Mr.~~have ~~Yozamp~~prior ~~retired~~experience aswith ~~Chief~~the ~~Business~~Company ~~Development~~and ~~Officer~~we asbelieve ofwe ~~December~~have ~~31,~~maintained ~~2023.~~operational ~~In addition~~continuity, ~~Greg~~leadership ~~Aydelott,~~transitions ~~our~~may ~~Chief~~result ~~Financial~~in ~~Officer,~~temporary ~~resigned~~disruption, ~~from~~changes ~~his~~in ~~role~~strategic ~~as of December 31~~direction, ~~2024.~~or ~~While~~uncertainty weamong ~~believe~~employees, wecustomers, ~~have~~or ~~successfully~~other ~~transitioned~~stakeholders. ~~from~~Any ~~these departures and have sufficient experience among our management team, any~~ additional attrition among senior management or key employees, ~~could~~or ~~adversely~~any ~~impact~~failure ~~us.~~of ~~The board has commenced a search for a new Chief Financial Officer. If we are unsuccessful in~~ our succession planning efforts, ~~the~~could ~~continuity~~adversely ofaffect our business, financial condition, and results of operations ~~could be adversely affected~~.

2423

Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.

The income and non-income tax regimes we are subject to or operate under are unsettled and may be subject to significant change. Changes in tax laws or tax rulings, or changes in interpretations of existing laws, could materially affect our financial position, results of operations, and cash flows. The overall tax environment remains uncertain and increasingly complex. Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary, and other fiscal challenges. In the U.S., various proposals to change corporate income taxes are periodically considered. Tax rates in the jurisdictions in which we operate may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult to operate with certainty about taxation. For example, changes to U.S. tax laws enacted in December 2017 had a significant impact on our tax obligations and effective tax rate beginning 2018, and the full consequences of the significant changes to U.S. tax laws as a result of the Tax Cuts and Jobs Act of 2017 ~~(the “Tax Cuts and Jobs Act”)~~ have not yet been fully determined. These enactments and future possible ~~guidance~~ guidance from the applicable taxing authorities may have a material impact on our results of operations. In addition, regulatory or legislative developments may arise from various U.S. tax reform proposals, some of which include proposed changes to the U.S. tax laws, which, if adopted, could result in increased taxation of our business operations. We closely monitor these proposals as they arise in the countries where it operates. Changes to the statutory tax rate may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted. We regularly assess the likely outcomes of our tax audits and disputes to determine the appropriateness of our tax reserves. However, any tax authority could take a position on tax treatment that is contrary to our expectations, which could result in tax liabilities in excess of reserves. ~~In addition, the foregoing items, as well as any future changes in tax laws, could have a material adverse effect on our business, cash flow, financial condition, or results of operations.~~

A failure to keep pace with developments in technology could impair our operations or competitive position.

Our business continues to demand the use of sophisticated systems and technology. These systems and technologies must be refined, updated, and replaced with more advanced systems on a regular basis in order for us to meet our customers’ demands and expectations. If we are unable to do so on a timely basis or within reasonable cost parameters, or if we are unable to appropriately and timely train our employees to operate any of these new systems, our business could suffer. We also may not achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies, and a failure to do so could result in higher than anticipated costs or could impair our results of operations.

Risks Related to Ownership of Our Common Stock

Our stock price may fluctuate significantly, and you may lose all or a part of your investment.

The trading price of our securities may be volatile and subject to wide price fluctuations in response to various factors, including:

·● market conditions in the broader stock market;

·● actual or anticipated fluctuations in our quarterly financial condition and results of operations, or those of other companies in our industry;

·● actual or anticipated strategic, technological, or regulatory threats, whether or not warranted by actual events;

·● whether any securities analysts cover our stock;

·● issuance of new or changed securities analysts’ reports or recommendations, if any;

·● investor perceptions of our Company, the lithium battery and accessory industry;

·● the volume of trading in our stock;

·● changes in accounting standards, policies, guidance, interpretations, or principles;

·● sales, or anticipated sales, of large blocks of our stock;

·● additions or departures of key management personnel, creative, or other talent;

·● regulatory or political developments, including changes in laws or regulations that are applicable to our business;

·● litigation and governmental investigations;

·● sales or distributions of our common stock by significant stockholders, the entity through which our controlling stockholder holds its investment, or other insiders;

·● natural disasters and other calamities; and

·● macroeconomic conditions.

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Furthermore, the stock market has experienced extreme volatility that in some cases has been unrelated or disproportionate to the operating performance of particular companies. These and other factors may cause the market price and demand for our securities to fluctuate substantially, which may limit or prevent investors from readily selling their securities and it may otherwise negatively affect the liquidity of our securities. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business.

We do not anticipate paying dividends on our common stock in the foreseeable future, and you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We do not anticipate paying any dividends in the foreseeable future on our common stock. We intend to retain all future earnings for the operation and expansion of our business and the repayment of outstanding debt. Any future debt facilities we may enter into may contain restrictions on our ability to pay dividends or make distributions, and any new credit facilities we may enter into may contain similar restrictions. As a result, capital appreciation, if any, of our common stock may be your major source of gain for the foreseeable future. While we may change this policy at some point in the future, we cannot assure you that we will make such a change.

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

The trading market for our securities may be influenced by the research and reports that securities or industry analysts publish about us or our business (or the absence of such research or reports). 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 stock prices or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade recommendations regarding our stock, or if our results of operations do not meet their expectations, our stock prices could decline and such decline could be material.

You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions, or otherwise.

You will experience additional dilution upon the exercise of options and warrants to purchase our common stock, including those options currently outstanding and possibly those granted in the future, and the issuance of restricted stock or other equity awards under our stock incentive plans. As of December 31, ~~2024~~2025, we had 200,000,000 shares of common stock authorized, of which 29,~~096~~781,~~082~~739 were issued. ~~Subsequent~~In toJanuary ~~December 31~~2025, ~~2024,~~ we ~~issued~~completed a toregistered ~~certain~~direct ~~institutional investors~~offering inand ~~connection~~concurrent ~~with~~private aplacement ~~registered~~pursuant ~~direct~~to ~~offering~~which ~~(i)~~we ~~474,193~~issued shares of common stock; and ~~(ii) 574,193 pre-funded~~ warrants ~~(the “January 2025 Pre-Funded Warrants”)~~ to purchase ~~up to 574,193~~ shares of common stock, ~~(the~~and ~~“January~~in ~~2025~~October ~~Pre-Funded Warrant Shares”). The January~~ 2025 ~~Pre-Funded~~we ~~Warrants~~issued ~~were~~shares ~~all~~of ~~exercised~~common ~~immediately~~stock ~~upon~~and ~~issuance.~~pre-funded Inwarrants in a ~~concurrent~~ private placement that closed January 3, 2025, the Company also issued to the institutional investors unregistered warrants (the “January 2025 Warrants”) to purchase up to an aggregate of 1,048,386 shares of common stock. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations~~—January 2025 Registered Direct Offering and Warrant Private Placement~~” for additional information regarding the ~~offering~~offerings.

26As of December 31, 2025, there were outstanding warrants to purchase up to 1,359,907 shares of common stock, as well as 144,498 pre-funded warrants, and 269,219 shares of common stock issuable upon the exercise or settlement of equity incentive awards outstanding under our 2021 Incentive Award Plan.

Our Articles of Incorporation authorizes us to issue shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its sole discretion, whether in connection with our incentive plans, acquisitions, or otherwise. We have reserved ~~10,000~~ shares of common stock for issuance ~~upon the exercise of outstanding stock options~~ under the 2021 ~~Incentive~~ Incentive Award Plan and ~~25,000 shares of common stock for issuance pursuant to our~~ 2021 Employee Stock Purchase Plan. In addition, as of December 31, 2024, there were outstanding warrants to purchase up to 5,380,965 shares of common stock. In addition, there are 11,430 shares of common stock issuable upon the exercise of equity incentive awards outstanding under our 2021 Incentive Award Plan as of December 31, 2024. Any common stock that we issue, including stock issued under our 2021 Incentive Award Plan or other equity incentive plans that we may adopt in the future, as well as under outstanding options or warrants, would dilute the percentage ownership held by our common stockholders. In addition, we have sold, and may continue to sell, shares of common stock under our at-the-market program, which may result in additional dilution. To the extent we raise additional capital by issuing equity securities, our stockholders may also experience substantial additional dilution.

Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.

If our existing stockholders sell substantial amounts of our securities in the public market, including the shares of common stock issued or issuable upon the exercise of ~~the~~outstanding ~~August~~warrants ~~2024~~or ~~Pre-Funded Warrants,~~warrants ~~Series~~that Amay ~~Warrants~~be ~~and Series B Warrants~~ issued in the ~~August 2024 Public Offering~~future, ~~as well as shares of common stock issued in the January 2025 Registered Direct Offering (including the January 2025 Pre-Funded Warrant Shares)~~ and ~~upon the issuance of~~ shares of ~~common stock upon the exercise, if any, of the January 2025 Warrants, and shares~~ issued as consideration in any future acquisitions, or the market perceives that such sales may occur, the market price of our securities could fall and we may be unable to sell our securities in the future. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—August 2024 Public Offering and Subsequent Warrant Exercises and Adjustments to Warrant Exercise and Reset Prices” and “—January 2025 Registered Direct Offering and Warrant Private Placement” for additional information regarding the August 2024 Public ~~Offering~~ Offering and January 2025 Registered Direct Offering, respectively. The perception in the public market that our stockholders might sell ~~securities~~ securities could also depress our market price. As of March 2511, ~~2025~~2026, we had 310,~~144~~846,~~468~~135 shares of common stock outstanding. Pursuant to the terms of the warrants issued to the underwriters (or their designees) in connection with our initial public offering (the “Underwriter Warrants”), the holders of the Underwriter Warrants have the right, subject to certain conditions, to require us to register the sale of the shares of our common stock underlying their Underwriter Warrants under the Securities Act.

If the holders of the Underwriter Warrants exercise their registration rights, the market price of shares of our securities may drop significantly. In addition, all of the shares of common stock issuable upon exercise of outstanding ~~stock~~ options under the 2021 Incentive Award Plan and all of the shares of common stock issuable pursuant to the 2021 Employee Stock Purchase Plan have been registered for public resale under the Securities Act. A decline in the price of shares of our securities might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.

Although our common stock is listed on Nasdaq, the exchange could subsequently delist our common stock if we fail to comply with ongoing listing standards.

Our common stock is currently is listed on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing, including a requirement that the bid price for our common stock remain above $1.00. On ~~September~~January 629, ~~2024~~2026, ~~as expected,~~ we received a ~~staff~~ determination from The Nasdaq Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) to delist our common stock from Nasdaq. Onif ~~September 12, 2024, we requested an appeal hearing, staying~~ the ~~delisting~~closing ofbid ~~the~~price ~~common~~does ~~stock~~not ~~pending~~exceed a$1.00 ~~decision~~for ~~from~~ a ~~hearings~~minimum ~~panel. Upon successful completion~~ of ~~the Reverse~~ten ~~Stock~~consecutive ~~Split,~~business wedays ~~received~~within ~~a letter from Nasdaq staff on October 23, 2024, advising us that we had regained compliance with~~ the ~~continued listing requirements in Listing Rule 5550(a)(2) and that we are therefore in~~ compliance ~~with~~period ~~Nasdaq’s~~of ~~listing~~180 ~~requirements. Consequently,~~calendar ~~the scheduled hearing before the hearings panel on October 24, 2024, was cancelled~~days. See the section titled “Legal Proceedings” for further information on the delisting notice.

While shares of our common stock continue to be listed and traded on Nasdaq, there can be no assurance that we will continue to meet Nasdaq listing standards. Any potential delisting of our common stock from Nasdaq may have materially adverse consequences to our stockholders, including:

a reduced market price and liquidity with respect to our shares of common stock, which could make our ability to raise new investment capital more difficult;
limited dissemination of the market price of our common stock;
limited news coverage;
limited interest by investors in our common stock;
volatility of the prices of our common stock due to low trading volume;
our common stock being considered a “penny stock,” which would result in broker-dealers participating in sales of our common stock being subject to the regulations set forth in Rules 15g-2 through 15g-0 promulgated under the Exchange Act;
increased difficulty in selling our common stock in certain states due to “blue sky” restrictions; and
limited ability to issue additional securities or secure additional financing.

The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.

As of December 31, ~~2024~~ 2025, ~~114~~19,~~676~~564,~~797~~585 Series A Warrants, exercisable for 5901,~~286,692~~943 shares of common stock, at $51.~~206~~31 per share ~~(post-Adjustment)~~, and 346,~~075,000~~246 Series B Warrants exercisable ~~for~~ 87for 2,~~384~~132 shares of common stock, at $0.10 per share ~~(post-Adjustment) were outstanding. In addition~~, ~~subsequent~~and ~~to December 31~~449,193 ~~2024, we issued to certain institutional investors the~~ January 2025 Warrants toexercisable ~~purchase~~for ~~up to an aggregate of 1~~449,~~048,386~~193 shares of common stock at ~~an exercise price of~~ $21.3631 per share, ~~subject~~were ~~to adjustment for reverse stock splits, recapitalizations, and reorganizations~~outstanding. The exercise of ~~the~~these ~~Series~~warrants ~~A Warrants and, to a lesser extent, the Series B Warrants and January 2025 Warrants~~ could result and have resulted in a substantial increase in the number of shares of common stock outstanding and therefore materially dilute the ownership percentage of currently outstanding shares of common stock. See ~~the section titled~~ “~~Management’s~~Note ~~Discussion~~7, ~~and~~Equity ~~Analysis of Financial Condition~~ and ~~Results~~Debt ~~of Operations—January 2025 Registered Direct Offering and Warrant Private Placement~~Financings” ~~and “—August 2024 Public Offering and Subsequent Warrant Exercises and Adjustments to Warrant Exercise and Reset Prices”~~ for additional information regarding the ~~January 2025 Registered Direct Offering and August 2024 Public Offering, respectively~~offerings.

Provisions of the Series A Warrants and Series B Warrants we sold in the August 2024 Public Offering may discourage an acquisition of us by a third party.

Certain provisions of the Series A Warrants and Series B Warrants we sold in the August 2024 Public Offering could make it more difficult or expensive for a third-party to acquire us. The Series A Warrants and Series B Warrants each prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the applicable warrants. These and other provisions of the Series A Warrants and Series B Warrants could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to our investors.

The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

To the extent we issue shares of common stock to affect a future business combination, the potential for the issuance of a substantial number of additional shares of common stock upon exercise of the Series A Warrants and, to a lesser extent, the Series B Warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such Series A Warrants and Series B Warrants, when exercised, will increase the number of issued and outstanding shares of common stock and reduce the value of the shares issued to complete the business combination. Accordingly, the Series A and Series B Warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring a target business. Additionally, the sale, or even the possibility of a sale, of the shares of common stock underlying the August 2024 Pre-Funded Warrants, Series A Warrants, and Series B Warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the extent the Series A Warrants and Series B Warrants are exercised, our investors may experience dilution to their holdings.

The Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering may have a material adverse impact on our financial condition, may impede our ability to raise additional capital, and may discourage an acquisition of us by a third party.

As a result of the daily volume weighted average price (“VWAP”) of the common stock during the five trading days before and after the Reverse Stock Split, the Reverse Stock Split cash true-up payment provision in the Series A Warrants, which is capped at $5.0 million in the aggregate under all Series A Warrants, was triggered, but the payment of the Reverse Stock Split cash true-up payment is currently suspended in accordance with the terms of the Series A Warrants. However, in connection with the January 2025 Registered Direct Offering, we used approximately $500,000 of the $2.2 million in net proceeds to satisfy a portion of amounts owed to our Series A Warrant holders pursuant to the terms of the outstanding Series A Warrants. The obligation to make the Reverse Stock Split cash true-up payment could impede our ability to raise additional capital and could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to our investors. In the event that the conditions for suspension of the Reverse Stock Split cash true-up payment under the terms of the Series A Warrants become no longer applicable, the payment of the Reverse Stock Split cash true-up payment could have a material adverse impact on our financial condition.

We continue to incur considerable legal costs as a result of operating as a public company, and our management will be required to devote substantial time to comply with public company regulations.

As a public company, and particularly after we cease to be an “emerging growth company,” as defined in the JOBS Act, we will continue to incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), as well as rules promulgated by the SEC and Nasdaq require us to adopt corporate governance practices applicable to U.S. public companies. Compliance with these rules and regulations will continue to increase our legal and financial compliance costs.

Sarbanes-Oxley, as well as rules and regulations subsequently implemented by the SEC and Nasdaq, have imposed increased disclosure and enhanced corporate governance practices for public companies. Our efforts to continue to comply with evolving laws, regulations, and standards are likely to result in increased expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. We may not be successful in continuing to implement these requirements and implementing them could adversely affect our business, results of operations, and financial condition. In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our financial results on a timely and accurate basis could be impaired.

Our management team has limited experience managing a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. These obligations and constituents require significant attention from our senior management and can divert their attention away from the day-to-day management of our business, which can harm our business, results of operations, and financial condition.

We are an “emerging growth company” and elect to comply with certain reduced reporting requirements applicable to emerging growth companies, which could make our securities less attractive to investors.

As an “emerging growth company,” we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our securities less attractive because we chose to rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We choose to avail ourselves of this extended transition period and defer adoption of certain changes in accounting standards.

As described in Section 101 of the JOBS Act, the “emerging growth company” classification can be retained for up to five years following our initial public offering or until the earlier occurrence of the following: the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeded $700.0 million as of the prior June 30; or the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

If some investors find our securities less attractive as a result of any choices to reduce future disclosure, there may be a less active market for our securities and our stock price may be more volatile.

Failure to maintain effective internal control over financial reporting in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our business and stock price.

We are required to comply with certain SEC rules that implement Sections 302 and 404 of Sarbanes-Oxley, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Though we are required to disclose changes made in our internal control procedures on a quarterly basis, we take advantage of certain exceptions from reporting requirements that are available to “emerging growth companies” under the JOBS Act. For example, each independent registered public accounting firm that performs an audit for us has not been required to attest to and report on our annual assessment of our internal controls over financial reporting pursuant to Section 404 and will not be required to do so until we are no longer an “emerging growth company” as defined in the JOBS Act and a non-accelerated filer in accordance with Rule 12b-2 under the Exchange Act. While we expect to be ready to comply with Section 404 of Sarbanes-Oxley by the applicable deadline, we cannot assure you that this will be the case. Furthermore, we may identify material weaknesses that we may be unable to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of Sarbanes-Oxley. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may be unable to conclude that we have effective internal controls over financial reporting in accordance with Section 404 of Sarbanes-Oxley. If we are unable to implement the requirements of Section 404 of Sarbanes-Oxley in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could have a material adverse effect on our business, prospects, results of operations, and financial condition.

If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq or another national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive: (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

Risks Related to Our Capital Structure

Our long-term lease and debt obligations could adversely affect our ability to raise additional capital to fund operations and limit our ability to enter into certain transactions.

As of December 31, ~~2024~~ 2025, we had total liabilities of $61.65 million, of which $~~5.0 million is the suspended liability for the true-up payment related to the August 8~~710, ~~2024 capital raise, $799,~~000 was related to operating lease liabilities, and $~~230~~197,000 was related to debt obligations.

If we cannot generate sufficient cash flow from operations to service our lease and ~~debt~~any ~~obligations~~current or ~~the~~future ~~Reverse~~debt ~~Stock Split cash true-up payment~~obligations, we may need to ~~further~~ refinance ~~our~~such ~~debt~~obligations, dispose of assets, or issue equity to obtain necessary funds. We do not know whether we will be able to do any of this on a timely basis or on terms satisfactory to us, or at all. ~~Our substantial lease and debt obligations could have important consequences, including:~~

·Our ~~our~~lease ~~ability~~and todebt obligations ~~obtain~~we ~~additional~~have ~~debt~~ or ~~equity~~may ~~financing~~incur ~~for~~in ~~working~~the ~~capital,~~future ~~capital~~could ~~expenditures,~~have ~~debt~~important ~~service requirements~~consequences, ~~acquisitions, and general corporate or other purposes may be limited;~~including:

·● ~~a portion of~~ our ~~cash~~ability ~~flows~~to ~~from~~obtain ~~operations~~additional ~~will~~debt beor ~~dedicated~~equity tofinancing ~~payments~~for onworking ~~our~~capital, ~~lease~~capital ~~and~~expenditures, debt ~~obligations~~service ~~and~~requirements, ~~will~~acquisitions, ~~not~~and begeneral ~~available~~corporate ~~for~~or other purposes, ~~including~~may ~~operations,~~be ~~capital expenditures and future business opportunities~~limited;

·● wea ~~may~~portion beof ~~vulnerable~~our incash aflows ~~downturn~~from inoperations ~~general~~will ~~economic~~be ~~conditions~~dedicated orto inpayments ~~business~~on orour ~~may~~lease and debt obligations and will not be ~~unable~~available tofor ~~carry~~other onpurposes, ~~capital~~including ~~spending~~operations, ~~that~~capital isexpenditures, ~~important~~and tofuture ~~our~~business ~~growth~~opportunities;

·● ~~restrictive~~we ~~covenants~~may inbe ~~our~~vulnerable ~~debt~~in ~~documents~~a ~~may~~downturn ~~impose~~in ~~significant~~general ~~operating~~economic ~~and~~conditions ~~financial~~or ~~restrictions~~in onbusiness ~~us,~~or ~~including~~may ~~our~~be ~~ability~~unable to ~~pay~~carry ~~dividends~~on ~~and~~capital ~~make~~spending ~~other~~that ~~restricted~~is ~~payments~~important orto ~~sell~~ our ~~collateral (other than inventory in the ordinary course of business)~~growth;

·● any debt agreements we enter into may contain restrictive covenants that impose operating and financial restrictions on us, including limitations on our ability to ~~introduce~~incur ~~new~~additional ~~products~~indebtedness, orpay ~~new~~dividends, ~~technologies~~ or ~~exploit~~enter ~~business~~into ~~opportunities~~certain ~~may be restricted~~transactions; ~~and~~

·● weour ~~may~~ability beto ~~placed~~introduce atnew aproducts ~~disadvantage~~or ~~compared~~new ~~with~~technologies ~~competitors~~or ~~that~~exploit ~~have~~business ~~proportionately~~opportunities ~~less~~may ~~lease~~be ~~and~~restricted; ~~debt obligations.~~and

●

we may be placed at a disadvantage compared with competitors that have proportionately less lease and debt obligations.

Our Articles of Incorporation provide that the Nevada Eighth Judicial District Court of Clark County, Nevada shall be the exclusive forum for certain litigation that may be initiated by our stockholders, including claims under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our Articles of Incorporation provide ~~provides~~ that, subject to limited exceptions, the Nevada Eighth Judicial District Court of Clark County, Nevada shall be, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought in the name or right of the Corporation or on its behalf, (ii) any action asserting a claim for breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of Nevada Revised Statutes Chapters 78 or 92A, our Articles of incorporation, or our Bylaws, (iv) any action to interpret, apply, enforce, or determine the validity of our Articles of Incorporation or Bylaws, or (v) any action asserting a claim governed by the internal affairs doctrine.

Although these choice of forum provisions would not apply to suits brought to enforce any duty or liability created by the Exchange Act or rules and regulations thereunder, and suits brought to enforce the Securities Act or rules and regulations thereunder are granted concurrent jurisdiction in federal and state courts pursuant to preemptive federal law, these choice of forum provisions may otherwise limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents. Stockholders who do bring a claim in the Nevada Eighth Judicial District Court of Clark County, Nevada could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State of Nevada. The Nevada Eighth Judicial District Court of Clark County, Nevada may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Alternatively, if a court were to find the choice of forum provision contained in our Articles of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Item 1c. cybersecurity

Risk Management and Strategy

We maintain an information security and cybersecurity program, as well as a cybersecurity governance framework, which are designed to protect our information systems against operational risks related to cybersecurity.

Cybersecurity Risk Management and Strategy

We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats which include, among other things, operational risks, intellectual property theft, fraud or extortion, harm to employees or customers, violation of privacy or security laws and related litigation and legal risk, and reputational risks.

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information, and detect and contain any cybersecurity incidents that impact us. We regularly engage with third-party consultants in connection with our cybersecurity risk management program, which is overseen by our Chief Operating Officer. The program is integrated into our overall risk management systems and processes, and includes a cybersecurity risk assessment process that routinely evaluates potential impacts of cybersecurity risks on our business, including our operations, financial stability, and reputation. The Audit Committee also reviews with management the implementation and effectiveness of the Company’s controls to monitor and mitigate cybersecurity risks.

Our cybersecurity risk management program also includes processes to triage, assess the severity of, escalate, contain, investigate, and remediate an incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage. If a cybersecurity incident is determined to be a potentially material cybersecurity incident, our disclosure controls and procedures define the steps to determine materiality and disclose such a material cybersecurity incident.

While we do not believe that our business strategy, results of operations or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our employees, customers, regulators, service providers, and other third parties have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks. We continue to assess the risks and changes in the cyber environment, invest in enhancements to our cybersecurity capabilities, and engage in industry and government forums to promote advancements in our cybersecurity capabilities, as well as the broader financial services cybersecurity ecosystem. For more information on risks to us from cybersecurity threats, see the section titled “Risk Factors—If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed” included within this Annual Report.30

While we do not believe that our business strategy, results of operations, or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our employees, customers, regulators, service providers, and other third parties have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks. We continue to assess the risks and changes in the cyber environment, invest in enhancements to our cybersecurity capabilities, and engage in industry and government forums to promote advancements in our cybersecurity capabilities, as well as the broader financial services cybersecurity ecosystem. For more information on risks to us from cybersecurity threats, see the section titled “Risk Factors—If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed” included within this Annual Report.

Cybersecurity Governance

Our Board is actively involved in overseeing risks from cybersecurity threats. At least once a year, our Board discusses our programs and policies related to cybersecurity and risk initiatives and considers them closely both from a risk management perspective and as part of our business strategy. Our Audit Committee has the authority to oversee and review the adequacy of our cybersecurity, information and technology security, and data privacy programs, procedures, and policies.

The Audit Committee regularly receives updates from management with respect to our efforts to manage data protection, cybersecurity, and information and technology risks, and assesses the results of reviews from internal audits. Materials presented to our Audit Committee include updates on our data security posture, results from internal audit and third-party assessments, our incident response plan, and certain cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. The Audit Committee also regularly engages with Management on technology risk-related topics.

Our processes also allow for our Board and the Audit Committee to be informed of key cybersecurity risks outside the regular reporting schedule. While regular meetings of the Audit Committee are scheduled on a quarterly cadence, the Audit Committee is authorized to meet with management or individual directors at any time it deems appropriate to discuss matters relevant to the committee. Our policy is for the Board and the Audit Committee to receive prompt and timely information regarding any significant cybersecurity incidents, as well as ongoing updates regarding any such incidents.

ITEM 2. PROPERTIES

Our corporate headquarters are in Redmond, Oregon, and house our engineering, sales, accounting, and operations staff. Our primary product warehouse is also located there. Our headquarters is approximately 15,000 square feet, leased at a base rent that increases 3.0% annually on January 31st of each year. From January 31, ~~2024~~2025 to January 30, ~~2025~~2026, the rental cost of our headquarters ~~was~~is approximately $1920,~~600~~ 200 per month.

WeIn May ~~previously~~of 2025, we leased a warehouse facility in ~~Redmond,~~next ~~Oregon,~~door ~~which~~to ~~was~~our ~~primarily~~existing ~~used~~warehouse ~~for~~in ~~warehousing~~Redmond, Oregon. The square footage of this facility is approximately 336,~~770~~545 square feet, and from ~~February~~May 1, ~~2024~~2025 to ~~September~~April 30, ~~2024~~2028, the rental cost of this ~~facility~~warehouse was approximately $33,340 per month. On September 24, 2024, we voluntarily terminated the lease, effective as of October 1, 2024 as part of an effort to identify cost reduction opportunities. We plan to continue operating our warehousing out of its Redmond, Oregon headquarters and Elkhart, Indiana locations. In connection with the termination of the lease, we paid one extra month’s rent, a $30,000 fee, and a broker commission of approximately $89,000. The lease termination is ~~expected to result in~~ approximately $406,~~000 of cost savings~~ 545 per month ~~over the 51 months following its termination~~.

We also lease a property in Elkhart, Indiana. Inthat ~~2024,~~provides itoffice ~~served~~space tofor ~~provide~~sales associates and a stocking location for several large manufacturers in the area. Elkhart is a hub for RV manufacturing in the United States. ~~Currently, it is primarily used for office space and as a backup location for warehousing and distribution to local customers.~~ The square footage of this facility is approximately 7,000 square feet, ~~leased~~and atrental a cost ofis approximately $4,900 per month.

We believe these facilities are sufficient to meet our current and anticipated needs in the near term and that additional space can be obtained on commercially reasonable terms as needed.

ITEM 3. LEGAL PROCEEDINGS

We may become, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities. We are not currently party to any pending legal proceedings that we believe would, individually or in the aggregate, have a material adverse effect on our financial condition, cash flows, or results of operations.

On January ~~September 6~~29, ~~2024~~2026, we received a ~~staff~~ determination from ~~The~~the ~~Nasdaq~~Staff ~~Listing~~that ~~Qualifications~~the ~~Department~~bid price of ~~Nasdaq~~the tocommon ~~delist~~stock ~~our~~had ~~Common~~closed ~~Stock~~below ~~from~~the ~~Nasdaq~~$1.00 ~~indicating~~minimum ~~that~~required ~~(i)~~by ~~we were not in compliance with~~ Nasdaq Listing Rule 5550(a)(2) ~~because~~for the ~~closing~~prior ~~bid~~30 ~~price~~consecutive ~~per~~business ~~share~~days ~~for~~(the ~~our~~“Minimum ~~Common~~Bid ~~Stock~~Price ~~had~~Requirement”) ~~closed~~and ~~below~~that ~~$1.00~~the ~~for~~Staff ~~the~~had ~~previous~~determined 30to ~~consecutive~~delist ~~business~~our ~~days,~~securities ~~and~~from ~~(ii)~~the weNasdaq ~~are~~Capital Market subject to ~~the~~a ~~provisions~~compliance ~~contemplated~~period. ~~under~~ Nasdaq provided ~~Listing~~us ~~Rule~~with ~~5810(c)(3)(A)(iii)~~a ~~because~~180-calendar day compliance period, asor ofuntil ~~September~~July 528, ~~2024~~2026, ~~our~~to ~~Common~~regain ~~Stock~~compliance ~~had~~with athe ~~closing~~listing ~~bid~~rule. ~~price~~We ofare $0currently evaluating options to regain compliance and intend to timely regain compliance with the Minimum Bid Price Requirement.10 orUnder ~~less~~Nasdaq ~~for~~rules, atwe ~~least~~are ~~ten~~currently ~~consecutive~~eligible ~~trading~~to ~~days~~conduct ~~(the~~a ~~“Staff~~reverse ~~Determination”)~~stock split of our common stock to regain compliance if necessary.

On September 12, 2024, the Company requested an appeal hearing on the Staff Determination from a Hearings Panel (the “Panel”) by filing a hearing request with Nasdaq pursuant to the procedures set forth in the Nasdaq Listing Rules, staying the delisting of the Company’s common stock pending the Panel’s decision Upon successful completion of the Reverse Stock Split, we received a letter from the Nasdaq Office of General Counsel on October 23, 2024, advising us that we had regained compliance with the minimum bid price continued listing requirements in Listing Rule 5550(a)(2) and that we are therefore in compliance with Nasdaq’s listing requirements. Consequently, the scheduled hearing before the Panel on October 24, 2024 was cancelled. Our Common Stock continues to be listed and traded on Nasdaq.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

3332

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock began trading on Nasdaq on April 1, 2022 under the symbol “XPON.” As of March 2511, ~~2025~~2026, there were approximately 17 16 registered holders of our common stock, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.

Dividend Policy

We have never declared or paid cash dividends on our common stock. We do not anticipate declaring or paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. Any future determination related to our dividend policy will be made at the discretion of our Board and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects, and other factors our Board may deem relevant. Further, any future debt facilities we may enter into may contain restrictions on our ability to pay dividends or make distributions, and any new credit facilities we may enter into may contain similar restrictions.

Stock Performance Graph

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by Item 201(e) of Regulation S-K.

Recent Sales of Unregistered Securities ~~from Registered Securities~~

~~There were no sales of unregistered equity securities during the fiscal year ended December 31, 2024 that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K~~None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes for the ~~fiscal~~ years ended December 31, ~~2024~~2025 and ~~2023~~2024, included in this Annual Report. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties that may adversely impact our operations and financial results. These risks and uncertainties are discussed in this Annual Report, including in Item 1A. “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements and Industry Data.” Percentage amounts included in this section have not in all cases been calculated on the basis of rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary from those obtained by performing the same calculations using the figures in our ~~consolidated~~ financial statements included elsewhere in this Annual Report. Certain other amounts that appear in this section ~~may~~ may not sum due to rounding.

Unless otherwise noted, all references to ~~shares~~share and per share ~~amounts~~data, as well as stockholders’ equity balances for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 presented in this section, have been adjusted retroactively to reflect a 1-for-100 reverse stock split, which was effective at 5:00 p.m. Pacific Time on October 8, 2024 (the “Reverse Stock Split”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reverse Stock Split and Reverse Stock Split True-Up Payment” below for additional information about the Reverse Stock Split.

3433

Overview

Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine applications, and ~~home~~industrial energy storage products ~~with plans to expand into industrial applications~~. Our high-powered, lithium ~~battery~~ battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in in the RV and marine industries. InWe ~~addition,~~deploy inintellectual ~~January~~property ~~2025~~strategies weto ~~began~~support ~~selling~~product ~~our e360 Home Energy Storage Solutions~~development, ~~which~~enhance ~~consist~~safety ~~of two LiFePO4 battery storage solutions~~ and ~~seek to provide consumers with a cost-effective~~performance, ~~low barrier of entry, flexible system to power~~ ~~their homes utilizing solar energy, wind, or grid back-up. We are deploying multiple intellectual property strategies with research~~ and ~~products~~ tostrengthen ~~sustain~~relationships ~~and~~across ~~scale~~ our ~~business~~target markets. This includes design, development, and collaboration, using our IP to bring safety, ~~quality~~ quality, and service to our customers. Our customers consist of dealers, wholesalers, private-label customers, and original equipment ~~manufacturers~~ manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally.

Our primary target markets ~~are~~include ~~currently~~ the RV, marine, industrial, and ~~home~~commercial energy storage industries. WeWithin ~~believe we are well-positioned to capitalize on~~ the ~~rapid~~industrial ~~market~~sector, ~~conversion~~we ~~from~~participate ~~lead-acid to lithium batteries as the primary method of power sourcing~~ in ~~these industries. We are also focused on expanding into the home energy storage market~~ ~~with~~applications ~~the~~such ~~introduction~~as ofelectric ~~our~~material ~~e360~~handling ~~Home~~and ~~Energy~~forklift ~~Storage Solutions~~equipment, ~~and~~where welithium ~~hope~~battery toadoption ~~establish~~continues ato ~~new~~increase ~~standard~~as inan ~~the industry for barrier price,~~alternative ~~flexibility,~~to ~~and~~traditional ~~integration~~lead-acid ~~with this offering~~systems. ~~Along~~We ~~with~~believe the ~~RV,~~broader ~~marine~~transition ~~and~~from ~~home~~lead-acid ~~energy~~to ~~storage~~lithium ~~markets,~~batteries wepresents ~~aim~~growth ~~to provide additional~~opportunities ~~capacities~~across tothese ~~the expanding electric forklift and industrial material handling~~ markets.

WeIn ~~launched~~addition ~~our~~to ~~e360 product line, which is manufactured~~our ~~for~~current ~~the~~focus ~~RV and marine industries~~areas, inwe ~~December~~are ~~2020.~~evaluating ~~The~~opportunities ~~e360 product line, through its sales growth, has shown~~ to beexpand afurther ~~preferred~~into ~~conversion solution~~industrial ~~for~~and ~~lead~~mission-~~acid~~critical ~~batteries.~~commercial Inapplications ~~December~~that require ~~2023,~~integrated webattery ~~announced our entrance into the home~~ energy storage ~~market with our introduction of two LiFePO4 battery storage~~ solutions. ~~that~~These ~~enable~~may ~~residential~~include mobile and ~~small~~stationary ~~business~~systems ~~customers~~supporting toremote ~~create~~operations, ~~their own stable micro-energy~~security ~~grid~~infrastructure, and ~~lessen~~other ~~the~~high-reliability ~~impact~~environments. ofWhile ~~increasing~~we ~~power~~continue ~~fluctuations~~to ~~and~~assess ~~outages.~~these Asadjacent ~~of January 2025~~markets, weour ~~have~~current ~~begun~~commercial ~~shipping~~activities remain ~~orders~~concentrated ofin our ~~e360 Home~~established ~~Energy~~RV, ~~Storage~~marine, ~~Solutions~~and industrial segments.

We launched our e360 product line in December 2020, initially targeting the RV and marine industries. The line, through its sales growth, has shown to be a preferred conversion solution for lead-acid batteries.

We currently operate Expion360 as one reportable business segment, Energy Storage (ES).

Recent Developments

~~January~~ December 2025 At-The-Market ~~Registered~~Issuance ~~Direct~~Sales ~~Offering and Warrant Private Placement~~Agreement

On ~~January~~December 312, 2025, we ~~sold to~~signed ~~certain institutional investors, in a registered direct offering,~~ an ~~aggregate of (i) 474,193 shares of common stock; and (ii) 574,193 pre~~at-~~funded warrants (~~the ~~“January 2025 Pre~~-~~Funded~~market ~~Warrants”)~~issuance tosales ~~purchase~~agreement. upWe tocommenced ~~574,193~~sales ~~shares~~under ofthe ~~common~~agreement ~~stock~~in ~~(the “~~January ~~2025~~ ~~Pre-Funded~~2026 ~~Warrant Shares”). The offering price per share was $2.48~~ and ~~the~~have ~~offering~~sold ~~price~~an ~~per January 2025 Pre-Funded Warrant~~aggregate ~~was~~of ~~$2.479.~~1,064,396 ~~Each~~shares ~~January 2025 Pre-Funded Warrant was exercisable~~ for ~~one~~net ~~share~~proceeds of ~~common~~approximately ~~stock for~~ $~~0.001~~932,567 ~~immediately~~through ~~and~~March ~~the January 2025 Pre-Funded Warrants were all exercised immediately upon issuance. The number of January 2025 Pre-Funded Warrant Shares are subject to adjustments for stock splits~~11, ~~recapitalizations, and reorganizations~~2026.

InOctober ~~a concurrent private placement that closed January 3,~~ 2025~~, we also issued to the institutional investors unregistered warrants (the “January 2025 Warrants”)~~ toPrivate ~~purchase~~Placement up to an aggregate of 1,048,386 shares of common stock (the “January 2025 Warrant Shares”) at an exercise price of $2.36 per share, subject to adjustment for reverse stock splits, recapitalizations, and ~~reorganizations.~~Management The January 2025 Warrants were immediately exercisable and can be exercised until January 3, 2030. In connection with the private placement, we filed a registration statement on Form S-1 (File No. 333-284354), which was declared effective by the SEC on February 11, 2025, covering the resale of the January 2025 Warrant Shares.Transition

35On October 16, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with two institutional investors pursuant to which we agreed to sell in a private placement (the “October 2025 Private Placement”) an aggregate of (i) 613,077 shares of common stock, and (ii) a pre-funded warrant (the “October 2025 Pre-Funded Warrant”) to purchase up to 144,498 shares of common stock. The offering price per share was $1.65 and the offering price per pre-funded warrant share was $1.6499.

We received net proceeds of approximately $21.21 million from the October 2025 Private Placement after deducting offering ~~and~~expenses ~~used~~payable ~~approximately~~by ~~$500,000~~us. ofWe used the net proceeds tofrom ~~satisfy~~the aoffering ~~portion~~to ofpay ~~certain~~severance ~~amounts owed~~obligations to ~~our~~certain ~~Series~~executive Aofficers ~~Warrant~~that ~~holders~~transitioned ~~pursuant~~concurrent towith the ~~terms~~ completion of the ~~outstanding~~October ~~Series~~2025 APrivate ~~Warrants~~Placement, and for working capital and other general corporate purposes. See “Note 7, Equity and Debt Financings—October 2025 Private Placement” for additional information regarding the offering.

~~Chief Operating Officer Medical Leave of Absence~~34

OnIn ~~November~~connection with ~~16,~~the ~~2024~~October 2025 Private Placement, Paul Shoun, ~~our~~resigned ~~Co-Founder,~~from ~~President,~~his ~~Chief~~role ~~Operating~~as ~~Officer,~~President and Chairman of the Board, ~~commenced~~and aBrian ~~temporary~~Schaffner ~~medical leave~~resigned ~~of absence~~ from his ~~duties~~role as Chief ~~Operating~~Executive Officer~~. During his leave~~, ~~Mr.~~but ~~Shoun~~retained ~~continued to perform~~ his ~~duties~~role as ~~President~~Director and ~~Chairman of~~also ~~the~~acted ~~Board~~as ~~during~~a ~~his~~consultant ~~leave.~~through ~~Mr.~~the ~~Shoun~~transition ~~resumed~~period. Also ~~his~~in ~~duties~~connection aswith ~~Chief~~the ~~Operating~~private ~~Officer~~placement, inJoseph ~~February~~Hammer ~~2025.~~was Inappointed ~~connection~~Chief ~~with~~Executive ~~Mr.~~Officer ~~Shoun’s return~~and toChairman ~~his~~of ~~full~~the ~~responsibilities~~Board, ~~Carson~~the ~~Heagen,~~Board increased ~~our~~the ~~Vice~~number ~~President~~ of ~~Operations,~~authorized ~~who~~directors ~~temporarily~~from ~~assumed~~five ~~the~~to ~~role~~six, ofand ~~Chief~~Scott ~~Operating Officer,~~Burell ~~ceased~~was ~~serving~~appointed inas ~~that~~a ~~capacity~~Director.

Resignation of Chief Financial Officer and Appointment of Interim Chief Financial Officer

On December 16, 2024, Greg Aydelott, our Chief Financial Officer, notified us of his resignation effective December 31, 2024, due to family health concerns. Mr. Aydelott is remaining with the Company in a consulting role on an ongoing basis. In connection with Mr. Aydelott’s resignation, on December 20, 2024, our Board appointed Brian Schaffner, who serves as our Chief Executive Officer and as a member of the Board, to serve as our interim Chief Financial Officer effective immediately upon Mr. Aydelott’s resignation. The Board has commenced a search for a new Chief Financial Officer.

Reverse Stock Split and Reverse Stock Split True-Up Payment

Effective as of 5:00 p.m. Pacific Time on October 8, 2024 (the “Effective Date”), we effected a 1-for-100 reverse stock split of our common stock (the “Reverse Stock Split”), which was approved by the Board on September 27, 2024, following stockholder approval at our annual meeting of stockholders held on September 27, 2024. No fractional shares of common stock were issued as a result of the Reverse Stock Split and instead each holder of Common Stock who was otherwise entitled to receive a fractional share as a result of the Reverse Stock Split received one whole share of common stock in lieu of such fractional share. As a result of this, 210,668 shares were issued on or before October 17, 2024. In addition, the Reverse Stock Split effected a reduction in the number of shares issuable pursuant to our equity awards, warrants and non-plan options outstanding as of the Effective Date, and a corresponding increase in the respective exercise prices, conversion prices, reset prices and the like thereunder.

As a result of the daily VWAP of the common stock during the five trading days before and after the Reverse Stock Split, a Reverse Stock Split cash true-up payment provision in the Series A Warrants, which is capped at $5.0 million in the aggregate under all Series A Warrants, was triggered, but the payment of the Reverse Stock Split cash true-up payment was suspended in accordance with the terms of the Series A Warrants. In connection with the closing of the January 3, 2025 offering, we used $500,000 of the net proceeds from the offering to satisfy a portion of certain amounts owed to the holders of the Series A Warrants pursuant to the terms thereof.

August 2024 Public Offering and Subsequent Warrant Exercises and Adjustments to Warrant Exercise and Reset Prices

On August 8, 2024, we sold in a public offering (the “August 2024 Public Offering”) (i) 33,402,000 common units (the “Common Units,” pre-Reverse Stock Split), each consisting of one share of common stock, two Series A warrants each to purchase one share of common stock (pre-Reverse Stock Split and pre-Adjustment (as defined below) and each, a “Series A Warrant”) and one Series B warrant to purchase such number of shares of common stock as determined in the Series B warrant (each, a “Series B Warrant”), and (ii) 16,598,000 pre-funded units (the “Pre-Funded Units,” and together with the Common Units, the “Units,” pre-Reverse Stock Split), each consisting of one pre-funded warrant to purchase one share of common stock (each, an “August 2024 Pre-Funded Warrant”), two Series A Warrants, and one Series B Warrant, through Aegis Capital Corp. serving as underwriter (in its capacity as such, the “Underwriter”). The Common Units were sold at a price of $0.20 per unit and the August 2024 Pre-Funded Warrants were sold at a price of $0.199 per unit (pre-Reverse Stock Split).

In addition, we granted the Underwriter a 45-day option to purchase additional shares of common stock and/or August 2024 Pre-Funded Warrants and/or Series A Warrants and/or Series B Warrants, representing up to 15% of the number of the respective securities sold in the August 2024 Public Offering, solely to cover over-allotments, if any. The Underwriter partially exercised its over-allotment option with respect to 15,000,000 Series A Warrants and 7,500,000 Series B Warrants (pre-Reverse Stock Split).

The August 2024 Pre-Funded Warrants were immediately exercisable at an exercise price of $0.001 per share (pre-Reverse Stock Split) and could be exercised at any time until exercised in full. All August 2024 Pre-Funded Warrants have been exercised.

Each Series A Warrant is exercisable at any time or times beginning on September 30, 2024, which was the first trading day following our notice to the Series A Warrant holders of stockholder approval received at the 2024 Annual Meeting, and will expire five years from such date. Each Series A Warrant was initially exercisable at an exercise price of $24.00 per share of common stock (post-Reverse Stock Split). The exercise price of the Series A Warrants was subject to reduction on the 11th trading day after the stockholder approval to the greater of the lowest daily VWAP during the ten-trading-day period following the stockholder approval and the floor price of $5.206 (representing 20% of the lower of our common stock’s closing price on Nasdaq on the date that we priced the August 2024 Public Offering, post-Reverse Stock Split) or our common stock’s average closing price on Nasdaq for the five trading days ending on such date (such lower price, without giving effect to such 20% reduction, the “Nasdaq Minimum Price”), and the number of shares issuable upon exercise would be proportionately adjusted such that the aggregate exercise price would remain unchanged. As of September 30, 2024, there would have been 5,301,592 shares of common stock (post-Reverse Stock Split and assuming the Adjustment had occurred on September 30, 2024) issuable upon exercise of the Series A Warrants as of that date. Subsequent to September 30, 2024, the exercise price under the Series A Warrants was reduced to the floor price of $5.206 (representing 20% of the Nasdaq Minimum Price, post-Reverse Stock Split), beginning on October 14, 2024, the 11th trading day following stockholder approval. As of December 31, 2024, 14,900 shares of common stock have been issued upon exercise of Series A Warrants and 5,286,692 shares of common stock remain issuable upon exercise of Series A Warrants.

Each Series B Warrant was exercisable immediately upon issuance at an exercise price of $0.10 per share (post-Reverse Stock Split). The number of shares of common stock issuable under the Series B Warrants were subject to adjustment using a reset price based on the weighted average price of common stock over a rolling five-trading-day period between the issuance date of the Class B Warrants and the close of trading on the tenth trading day following stockholder approval, subject to certain floor prices. As of December 31, 2024, 1,294,367 shares of common stock (post-Reverse Stock Split) had been issued upon exercise of Series B Warrants and there were 1,032,198 shares of common stock (post-Reverse Stock Split) issuable upon exercise of Series B Warrants based on the reset price of $5.45 (representing the lowest arithmetic average of the daily VWAP during the five-trading-day period from September 12, 2024 through September 18, 2024). Effective October 8, 2024, after market close, the Reverse Stock Split occurred and as of December 31, 2024, 87,384 shares of common stock remain issuable upon exercise of Series B Warrants using the reset price, which was reduced to the floor price of $5.206 (representing 20% of the Nasdaq Minimum Price (post-Reverse Stock Split and post-Adjustment).

Key Factors Affecting Our Results of Operations

Our results of operations and financial performance are significantly dependent on the following factors:

Consumer Demand

~~Although~~Our ~~our~~ sales are primarily generated from dealers, wholesalers, private-label customers, and OEMs ~~focused~~serving on the RV, marine, and ~~home~~industrial ~~energy~~ markets,. ~~the~~Because ~~demand for~~ our ~~products from these customers depends on consumer demand. Our~~ sales are ~~completed~~generally made on a purchase order basis, and ~~most~~ are ~~without~~not ~~firm,~~supported by long-term revenue commitments, orthe ~~sales~~demand ~~arrangements,~~for ~~which~~our weproducts ~~expect~~from these tocustomers ~~continue~~depends ~~going~~on ~~forward.~~consumer ~~Accordingly~~demand, and our ~~growth~~results ~~prospects~~of ~~and~~operations ~~future sales~~ are ~~subject~~ sensitive to ~~risks~~changes ~~and~~in ~~uncertainties~~customer ~~related~~purchasing inpatterns. ~~part~~During the toyear ~~consumer~~ended ~~demand~~December ~~for~~31, ~~our products~~2025, ~~which~~our isrevenue ~~affected~~increased by a71.6% ~~number~~compared ofto ~~factors,~~the ~~including fuel~~prior ~~costs,~~year. ~~discretionary~~This ~~spending,~~increase ~~macroeconomic~~was ~~conditions,~~primarily ~~including~~driven ~~inflation,~~by ~~changes in tariffs and interest rates, geopolitical~~expanded ~~pressures,~~distribution ~~and~~relationships ~~volatility~~ in the RV, ~~marine,~~ and ~~home~~marine ~~energy~~channels, ~~markets.~~increased Inadoption ~~recent~~of ~~years~~our weLiFePO4 ~~have~~battery ~~seen~~platforms aas ~~rise~~customers incontinued transitioning ~~fuel~~from ~~costs,~~traditional ~~higher~~lead-acid ~~interest rates~~systems, ~~and~~growth ~~other changes~~ in ~~macroeconomic~~sales ~~conditions,~~to ~~which~~select ~~have~~OEM ~~resulted~~customers, inand ~~decreased~~contributions ~~consumer~~from ~~spending~~recently ~~decisions and affecting our~~introduced ~~industry~~product aslines, aincluding ~~whole.~~next-generation ~~In addition~~GC2, weGroup ~~expect~~27, ~~escalating~~and ~~tensions~~Edge ~~between~~battery ~~the U~~models.S. ~~and~~The ~~China,~~growth ~~where~~in ~~several~~sales ofalso ~~our~~reflects ~~key~~improved ~~manufacturers~~channel ~~and~~penetration ~~suppliers~~and ~~are~~broader ~~located,~~customer asadoption ~~well as the ongoing risk~~ of ~~new~~higher-capacity orbattery ~~additional~~configurations. ~~tariffs~~While ~~impacting~~macroeconomic ~~lithium-ion~~factors, ~~batteries~~including orinterest ~~related~~rates ~~parts,~~and tofuel ~~increase~~costs, ~~our~~may ~~cost~~influence ofconsumer ~~goods~~demand ~~sold,~~in ~~which~~the ~~could~~RV ~~require~~and usmarine toindustries, ~~increase prices to~~ our ~~customers~~recent orresults ~~result~~reflect inincreased ~~lower~~market ~~gross~~acceptance ~~margins~~of on our products. ~~These conditions have had,~~ and ~~may~~expansion ~~continue~~of ~~to have, a negative effect on~~ our ~~business,~~distribution ~~financial condition, and results of operations~~footprint.

37We have recently added several new distributors and OEM customers in RV and marine markets. These relationships contributed to incremental order volume during 2025 and are expected to support revenue growth in 2026, although the timing and magnitude of future orders will continue to remain subject to customer demand and overall market conditions.

While RV and marine applications have historically driven our revenue, in January 2025, we began shipping orders of our e360 Home Energy Storage Solution, comprised of two LiFePO4 battery storage solutions. Our e360 Home Energy Storage Solutions aim to provide consumers with a cost-effective, low barrier of entry, flexible system to power their homes utilizing solar energy, wind, or grid back-up. The success of our strategy depends on (i) the continued growth of these addressable markets in line with our expectations, and (ii) our ability to successfully enter and maintain a competitive position in the RV, marine, and home energy markets with commercially viable products. We expect to incur significant marketing costs understanding and growing our presence within these markets, and researching and targeting customers in these markets, and our efforts may not be successful in generating sales. If we fail to execute on this growth strategy in accordance with our expectations, our sales growth could be limited to the growth of existing products and existing end markets.

Expion360 has recently added several new distributors and OEM customers in RV and marine markets. Management believes that orders resulting from these new relationships will result in significant new revenue streams in the year ending December 31, 2025. In addition, Expion360 began shipping Home Energy Storage Systems in January 2025.

Manufacturing and Supply Chain

Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells. While we do not have long-term purchase agreements with these manufacturers and ~~our~~generally ~~purchases~~transact ~~are completed~~ on a purchase- order basis, we maintain strong relationships with our manufacturers and cell suppliers, ~~reflected~~ inwhich ~~our~~have ~~ability~~historically enabled us to increase our purchase ~~order~~ volumes ~~(qualifying~~and usqualify for ~~related~~ volume-based discounts). The strength of these relationships, ~~has~~together ~~helped~~with usongoing ~~moderate~~supplier ~~increased~~negotiations and purchasing strategies, have supported our efforts to manage supply-related costs associated with inflation, currency fluctuations, and U.S. government tariffs imposed on our imports, ~~and~~as ~~avoid~~well as to mitigate potential shipment delays. We aim to maintain an appropriate level of inventory to satisfy our ~~expected~~ expected supply requirements. WeWhile we believe we could locate suitable alternative third-party manufacturers to fulfill our requirements if needed, transitioning suppliers could require time and result in additional costs.

Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers that meet our approval and quality standards. ~~and~~Accordingly, aspricing afor ~~result,~~certain weraw ~~may~~materials ~~have~~and ~~limited~~components ~~control~~is ~~over~~influenced ~~the~~by ~~agreed~~market ~~pricing for these raw materials~~ conditions and ~~battery~~supplier ~~components~~negotiations. We estimate that raw material costs account for over half of our cost of goods sold. Lithium, which is extracted from mined ore, is a key raw material used to produce our battery cells and, asfluctuations ain ~~result,~~lithium ~~the~~pricing ~~cost~~can ofaffect our battery ~~cells is dependent on the price and availability of lithium,~~cell ~~which~~costs. ~~may~~From betime ~~volatile~~to ~~and unpredictable and beyond our control. Additionally~~time, ~~availability~~changes ofin ~~the~~ raw ~~materials~~material ~~used~~availability ~~to manufacture our products~~ may beinfluence ~~limited~~pricing atdynamics ~~times, resulting in higher prices and/~~or ~~the~~sourcing ~~need to find alternative suppliers~~strategies. ~~Our~~Certain of our battery cell manufacturers have ~~joint venture~~ factories outside of Asia and have secured sourcing contracts from lithium suppliers in South America and Australia. In addition, we have a secondary source for lithium iron phosphate cells ~~used in our batteries~~ from a supplier in Europe, ~~enabling~~providing usadditional togeographic ~~source~~diversification ~~materials~~and ~~outside~~sourcing ~~of Asia in the event it becomes necessary to do so~~flexibility.

In addition to increased mining and newly located reserves, there is an industry push to provide more efficient ways to extract lithium from mined ore. Another development of the past few years is lithium cell recycling. This process will recapture the raw lithium from the cell for reuse in future cells. However, notwithstanding efforts to improve the sustainability and efficiency of lithium mining, the price of lithium is volatile. We continue to monitor developments that may adversely affect our supply chain.35

38Industry initiatives to expand lithium production capacity and lithium cell recycling may affect long-term supply dynamics. For example, there is an industry push to provide more efficient ways to extract lithium from mined ore. Another development of the past few years is lithium cell recycling, which recaptures raw lithium from the cell for reuse in future cells. However, notwithstanding efforts to improve the sustainability and efficiency of lithium mining, the price of lithium remains subject to market volatility. We continue to monitor developments that may affect our supply chain.

Management expects that products sourced from our Asian third-party manufacturers ~~will~~may be subject to additional tariffs in ~~2025~~2026. We ~~believe~~intend ~~that~~to wemitigate ~~can~~the ~~protect~~potential ~~our~~impact on margins through a combination of supplier ~~concessions~~ negotiations, selective customer price ~~increases~~adjustments, ongoing cost optimization initiatives, and ~~efficiencies~~the ~~gained~~development of lower-cost product configurations designed to improve manufacturing efficiency and overall unit economics as sales volumes ~~continue~~increase. toThe ~~grow~~effectiveness of these measures will depend on market conditions, sales volume, product mix, and future tariff developments.

For additional information regarding supply chain risks, see the section titled “Risk Factors—Our results of operations could be adversely affected by changes in the cost and availability of raw materials ~~and~~our wereliance ~~are dependent~~ on third-party manufacturers and suppliers” and “~~Risk Factors~~—Increases in costs, disruption of supply, or shortage of any of our battery components, such as electronic and mechanical ~~parts, or raw materials used in the~~ ~~production of such~~ parts could harm our business.”

Product and Customer Mix

As of December 31, ~~2024~~ 2025, we sell 1514 models of LiFEPO4 batteries, the Aura 600, and various individual or bundled accessories for battery systems. Our products are sold to ~~different customers (i.e.,~~ dealers, wholesalers, private-label customers, and OEMs, ~~etc.)~~ at differing prices and ~~have~~with varying ~~costs~~cost structures. The average selling price and costs of goods sold for a particular product will vary with changes in the sales channel mix, volume of products sold, and the prices of such products sold relative to other products. While we work with our suppliers to limit price and supply cost increases, our products may see price increases resulting from a rise in supply costs due to currency fluctuations, inflation, and tariffs, which may affect pricing and gross margins. Accessory and OEM sales typically have lower average selling prices and resulting margins relative to other distribution channels. As a result, ~~which~~shifts in customer mix could decrease our margins and negatively affect our growth or require us to increase the prices of our products. However, the benefits of increased sales volumes and broader customer penetration typically has, and may continue to, offset ~~these~~the ~~reductions~~impact of lower-margin product and customer mix. The relative margins of products sold also impact our results of operations. As we introduce new products, we may see a change in product and sales channel mix, which could result in period-to-period fluctuations in our overall gross margin.

Competition

We compete with both traditional lead-acid and lithium-ion battery manufacturers that primarily either import their products and/or components or manufacture their products and/or components under a private label. As we develop new products and expand into new markets, we may experience competition with a broader range of companies. These companies may have more resources than us and be able to allocate more resources to their current and future products. Our competitors may source products or components at lower costs than us, which may require us to evaluate our own costs, lower our product prices, or increase our sales volume to maintain our expected profitability levels.

Research and Development

We ~~anticipate~~continue ~~that~~to ~~additional investments~~ invest in ~~our infrastructure and~~ research and development ~~spending~~to ~~will~~enhance bethe ~~required~~performance, toreliability, ~~scale~~and integration capabilities of our ~~operations~~LiFePO4 ~~and~~battery ~~increase~~systems. ~~productivity,~~Our R&D ~~address~~efforts ~~the~~focus ~~needs~~on ofbattery ~~our~~management ~~customers~~systems, ~~further~~ ~~develop~~thermal ~~and~~management, ~~enhance~~product ~~our~~durability, ~~products~~system ~~and services~~integration, and ~~expand~~application-specific configurations ~~into~~for ~~new~~the ~~geographic~~RV, ~~areas~~marine, industrial, and ~~market~~specialty ~~segments~~vehicle markets.

~~New~~As ~~technologies are rapidly emerging in the markets~~electrification ~~where~~trends weevolve ~~conduct~~across ~~business~~mobile and ~~many~~stationary ~~new~~applications, ~~energy~~customer ~~storage~~requirements ~~technologies~~continue ~~have been introduced over the past several years. Our ability~~ to ~~achieve significant and sustained penetration of key developing markets~~develop, including ~~the~~demand ~~RV,~~for ~~marine,~~improved ~~residential~~ energy ~~storage, and small commercial~~ ~~energy storage markets~~density, ~~will~~communication ~~depend upon our success in developing these and other technologies~~protocols, ~~either~~remote ~~independently,~~monitoring ~~through joint ventures~~capabilities, or ~~through acquisitions, which in each case may require significant capital~~ and ~~commitment~~system-level ofintegration. ~~resources~~Our ~~to research and~~ development. ~~Accordingly, we~~initiatives ~~may~~are ~~need~~ intended to ~~seek~~address ~~additional~~these ~~debt~~evolving requirements and ~~equity~~support ~~financing~~competitiveness towithin ~~fund~~ our ~~research~~core ~~and development efforts and planned growth~~markets.

We also evaluate emerging technologies and broader industry developments that may influence future product design, including advancements in cell chemistry, system architecture, and energy management software. Artificial intelligence (“AI”) and data-driven analytics are increasingly being incorporated into energy management, predictive maintenance, and supply chain optimization across the battery industry. While AI is not currently a primary driver of our product offerings, we monitor developments in this area and assess potential applications that may enhance system diagnostics, performance monitoring, and operational efficiency over time.

Our research and development spending may fluctuate depending on product development cycles, customer requirements, and broader market conditions.

Certifications

We have completed the final requirements to obtain UL Safety Certifications on our new 12V Group 27 100Ah and 132Ah batteries, and on our 12V GC2 battery. Now that these certifications have been completed, all of the batteries produced by us will have a UL Safety Certification, emphasizing our commitment to quality, safety and service for our customers.

Key Line Items

Net Sales

Our revenue is generated from the sale of products consisting primarily of batteries and accessories. We recognize revenue when control of goods or services is transferred to our customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. ~~All~~Our ~~of our~~ sales are primarily within the United States.

Cost of Sales

Our primary cost of sales as a percentage of sales is related to our direct product and landing costs. Direct labor costs consist of payroll costs (including taxes and benefits) of employees directly engaged in assembly activities. Per full absorption cost accounting, overhead related to our cost of sales is added, consisting primarily of warehouse rent and utilities. The costs can increase or decrease based on costs of product and assembly parts (purchased at market pricing), customer supply requirements, and the amount of labor required to assemble a product, along with the allocation of fixed overhead.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses consist primarily of salaries and benefits, legal and professional fees, and sales and marketing costs. Other significant costs include ~~facility and related costs,~~ research and development, software and information technology, insurance, and ~~insurance~~facility and related costs.

Interest and Other Income, net

Interest expense consists of interest costs on loans with interest rates ranging from 3.75% to 10.0% and amortization of convertible note costs. The amortized convertible note costs were $~~667,000~~0 and $0667,000 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Provision for Income Taxes

We are subject to corporate federal and state income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

~~We have adopted the provisions in~~37 ASC 740, Income Taxes, related to accounting for uncertain tax positions, which require recognition of the impact of a tax position in the financial statements if the position is more likely than not to be sustained upon examination and on the technical merits of the position. We have concluded there were no material unrecognized tax benefits as of December 31, 2024 or December 31, 2023.

~~Our~~We ~~practice~~have isadopted tothe provisions ~~recognize~~in ASC ~~interest~~740, ~~and/or~~Income ~~penalties~~ Taxes, related to ~~income~~accounting ~~tax~~for ~~matters~~uncertain ~~as income~~ tax ~~expense.~~positions, Wewhich ~~had~~require norecognition ~~accrual~~of ~~for~~the impact ~~interest~~of ora ~~penalties~~tax onposition ~~our~~in ~~balance~~the ~~sheet~~financial atstatements ~~December~~if ~~31, 2024~~the orposition ~~December~~is ~~31,~~more ~~2023,~~likely ~~and~~than ~~did~~ not ~~recognize~~to ~~any~~be ~~interest~~sustained orupon ~~penalties~~examination inand ~~our~~on the ~~statement~~technical merits of ~~operations for~~ the ~~years~~position. ~~ended~~We ~~December 31,~~have ~~2024~~concluded ~~or 2023, since~~ there ~~are~~were no material unrecognized tax benefits. Weas doof ~~not~~December ~~expect~~31, ~~any~~2025 ~~material~~or ~~change to the amount of unrecognized~~December ~~tax~~31, ~~benefits to occur within the next 12 months~~2024.

Our practice is to recognize interest and/or penalties related to income tax matters as income tax expense. We had no accrual for interest or penalties on our balance sheet at December 31, 2025 or December 31, 2024, and did not recognize any interest or penalties in our statement of operations for the years ended December 31, 2025 or 2024, since there are no material unrecognized tax benefits. We do not expect any material change to the amount of unrecognized tax benefits to occur within the next 12 months.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.

Use of Non-GAAP Financial Measures

We disclose financial measures calculated and presented in accordance with the generally accepted accounting principles in the United States (US “GAAP”); however, we provide certain financial information on a non-GAAP basis (“non-GAAP financial measures”). We provide non-GAAP financial measures to provide information that may assist investors in understanding our results of operations and assessing our prospects for future performance, which consist of adjusted cost of sales. We believe evaluating certain financial and operating measures on an adjusted basis is important as it excludes ~~liquidation~~ costs that are not indicative of our core results of operations and are largely outside of our control. However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with US GAAP.

We calculate our adjusted cost of sales non-GAAP financial measures for current period financial information by excluding the effect of ~~liquidation of~~ ~~non-core~~an ~~product~~adjustment inrelated ~~the consolidated~~to ~~financial~~obsolete ~~statements~~inventory. The information presented on an adjusted cost of sales basis, as we present such information, may not necessarily be comparable to similarly -titled information presented by other companies, and may not be appropriate measures for comparing our performance relative to other companies.

Results of Operations

Year Ended December 31, ~~2024~~2025, Compared to the Year Ended December 31, ~~2023~~2024

The following table sets forth certain operational data as a percentage of sales:

	Fiscal Years Ended December 31,
	Years Ended December 31,
	2024						2023
	2025						2024
	$			% of Net sales			$			% of Net sales
Net sales	$	59,~~624~~651,~~939~~870			100.0	%	$	5,~~981~~624,~~134~~939			100.0	%
Cost of sales		48,~~469~~314,~~711~~472			7986.51			4,~~405~~469,~~611~~711			7379.75
Gross profit		1,~~155~~337,~~228~~398			2013.59			1,~~575~~155,~~523~~228			2620.35
Selling, general, and administrative expenses		712,~~909~~040,~~219~~903			~~140~~124.68			87,~~745~~909,~~135~~219			~~146~~140.26
Loss from operations		(610,~~753~~703,~~991~~505	)		(~~120~~110.19	)		(76,~~169~~753,~~612~~991	)		(~~119~~120.91	)
Other expense - net		6,727,032			119.6			283,369			4.7
Other (income) / expense - net		(4,468,468	)		(46.3	)		6,727,032			119.6
Loss before income taxes		(136,~~481~~235,~~023~~037	)		(~~239~~64.76	)		(713,~~452~~481,~~981~~023	)		(~~124~~239.67	)
Net loss		(136,~~479~~235,~~475~~187	)		(~~239~~64.6	)		(713,~~456~~479,~~274~~475	)		(~~124~~239.76	)

Net Sales

Net sales for the year ended December 31, ~~2024~~2025 ~~decreased~~increased by $~~356~~4.0 million,~~000,~~ or 671.06%, compared to the year ended December 31, ~~2023~~2024. Sales were $59.67 million for the year ended December 31, ~~2024~~2025 and $65.06 million for the year ended December 31, ~~2023~~2024. The year-over-year ~~decrease was primarily attributable to decreases in~~increase ~~the~~reflects ~~consumer~~expansion ~~market,~~of ~~driving~~our ~~decreases~~customer ~~in OEM sales. Our net sales for the three months ended December 31~~base, ~~2024, however,~~ increased ~~by $1.1~~sales ~~million, or 131%, compared~~ to ~~the~~key ~~three months ended December 31~~customers, ~~2023.~~and ~~Sales~~broader ~~were~~adoption ~~$2.0~~of ~~million~~our ~~for~~LiFePO4 ~~the~~battery ~~three~~platforms ~~months ended December~~across ~~31,~~distribution ~~2024~~ and ~~$859,000~~OEM ~~for the three months ended December 31, 2023~~channels.

Cost of Sales

Cost of sales for the year ended December 31, ~~2024~~2025 increased by $643.8 million,~~000,~~ or 186.50%, compared to the year ended December 31, ~~2023~~2024. Cost of sales were $48.53 million for the year ended December 31, ~~2024~~2025 and $4.45 million for the year ended December 31, ~~2023~~2024. Cost of sales as a percentage of sales increased by ~~5.8%~~ ~~in 2024~~6.7 ~~The~~percentage ~~change~~points in ~~cost~~2025, ~~of sales was primarily related~~ to a86.1% ~~decrease~~compared ~~in overall sales, resulting in a decrease in economies of scale pertaining~~ to ~~fixed~~79.5% ~~costs, as well as the liquidation of some non-core product~~ in 2024 ~~increasing our cost of sales above what they would have been without the liquidation~~.

~~During~~Cost of sales for the year ended December 31, ~~2024,~~ we2025 ~~liquidated~~includes ~~some~~a ~~non~~one-~~core~~time ~~product,~~$0.9 ~~which~~million ~~was~~adjustment arelated ~~factor~~to inobsolete ~~reducing~~inventory. ~~leased~~Excluding ~~warehouse~~this adjustment, ~~space.~~which Ifmanagement webelieves ~~had~~is not ~~done~~indicative ~~the~~of ~~liquidation~~ongoing operating performance, cost of sales for the year ended December 31, 2025 ~~2024~~ would have ~~decreased~~increased by $422.9 million,~~000,~~ or 065.98%, compared to the year ended December 31, ~~2023. Cost of sales would have been $4.4 million for the year ended December 31~~2024, ~~2024~~ and ~~$4.4~~cost ~~million for the year ended December 31, 2023. Cost~~ of sales as a percentage of sales would have ~~increased~~decreased by 42.5%7 inpercentage ~~the~~points ~~year~~in ~~ended December 31~~2025, ~~2024~~to 76.8% compared to ~~the~~79.5% ~~prior~~in ~~year~~2024.

The improvement in pre-adjustment cost of sales reflects favorable product mix, including increased sales of higher-margin battery models, as well as a greater proportion of direct-to-consumer sales through our website, while the increase in adjusted cost of sales is primarily due to the adjustment for inventory identified as obsolete or overvalued.

Gross Profit

Our gross profit for the year ended December 31, ~~2024~~2025 ~~decreased~~increased by $~~420~~0.2 million,~~000,~~ or 2615.78%, compared to the year ended December 31, ~~2023~~2024. Gross profit was $1.23 million for the year ended December 31, ~~2024~~2025 and $1.62 million for the year ended December 31, ~~2023~~2024. Gross profit as a percentage of sales decreased by 5 6.87% for the year ended December 31, ~~2024~~2025, to 2013.59% compared to 2620.35% for the year ended December 31, ~~2023~~2024. ~~The~~For ~~decrease in gross profit for~~ the year ended December 31, ~~2024~~2025, ~~was~~a ~~primarily~~significant ~~attributable~~increase toin ~~lower~~net sales ~~volumes~~was ~~due~~somewhat tooffset ~~the~~by ~~slowdown~~an increase in ~~the~~cost RVof ~~industry~~sales, which includes a one-time adjustment for obsolete inventory, resulting in ~~lower~~a ~~economies~~decrease ofin ~~scale~~the ongross ~~our~~profit ~~fixed~~margin. ~~costs~~Gross profit for the year ended December 31, as2025 ~~well~~prior asto the ~~liquidation~~adjustment ofwould ~~non-core~~have ~~product~~been ~~increasing~~$2.2 ~~our~~million, ~~cost~~and as a percent of sales, ~~above~~would ~~what~~have increased by ~~they~~2.7 ~~would~~percentage ~~have~~points, ~~been~~to ~~without~~23.2%, ~~the~~primarily ~~liquidation~~due to a more favorable product mix and an increase in direct-to-consume sales.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses for the year ended December 31, ~~2024~~2025 ~~decreased~~increased by $~~836~~4.1 million,~~000,~~ or 952.62%, compared to the year ended December 31, ~~2023~~2024. Selling, general, and administrative expenses were $712.90 million for the year ended December 31, ~~2024~~2025 and $8.7.9 million for the year ended December 31, ~~2023~~2024. The ~~decrease~~increase in selling, general, and administrative expenses was primarily due to ~~decreases~~increases in salaries ~~legal~~and benefits, including executive severance and ~~professional~~performance-related ~~fees~~bonuses, asincreased ~~well~~stock-based ascompensation expense associated ~~salaries~~with the grant of options and ~~benefits,~~RSUs ~~which~~to ~~was~~executives, ~~partially~~directors, ~~offset~~and bynon-executive anemployees, ~~increase~~and increases in ~~licenses~~legal and professional fees. Selling, ~~due~~general, and administrative expenses as a percentage of net sales decreased to ~~cash~~124.8% ~~premium~~in ~~fees~~the ~~paid~~year ~~when~~ended ~~making~~December ~~repayment~~31, 2025 from on140.6% ~~our~~in ~~convertible~~the ~~note~~year asended ~~well~~December as31, ~~fees~~2024, ~~for~~reflecting ~~exiting~~a ~~the~~partial ~~warehouse~~operating ~~lease~~leverage resulting from higher revenue, despite increased personnel and professional expenses.

Presented in the table below is the composition of selling, general and administrative expenses:

	Fiscal Years Ended December 31,
	Years Ended December 31,
	2024		2023
	2025		2024
Salaries and benefits	$	36,~~260~~417,~~866~~659	$	3,~~681~~260,~~410~~866
Legal and professional		12,~~584~~736,~~589~~199		21,~~034~~584,~~374~~589
Sales and marketing		~~926~~1,~~430~~001,730		~~929~~926,~~220~~430
Rents, maintenance, utilities		449,997		573,652
Research and development		558,882		295,292
Research and development		295,292		397,662
Software, fees, tech support		290,023		274,780
Software, fees, tech support		274,780		234,285
Insurance		273,702		263,930
Insurance		263,930		179,989
Rents, maintenance, utilities		233,843		449,997
Depreciation		155,315		182,825
Travel expenses		199,583		137,298
Travel expenses		137,298		199,845
Depreciation		105,616		155,315
Supplies, office		23,876		58,049
Office Supplies		24,144		23,876
Other		~~536~~199,~~846~~522		~~273~~536,~~824~~846
Total	$	712,~~909~~040,~~219~~903	$	87,~~745~~909,~~135~~219

~~Other Expense~~39

Other ~~expense for the years ended~~(Income) ~~December~~/ 31, 2024 and 2023 was $6.7 million and $283,000, respectively. Other expense for the year ended December 31, 2024 was made up of $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, as well as $977,000 in interest expense and $709,000 in settlement expense. Other expense for the year ended December 31, 2023 was made up almost entirely of settlement expense, with interest income and interest expense offsetting each other at $126,000 and $125,000, respectively.Expense

Other income and expense for the year ended December 31, 2025 was income of $4.5 million and for the year ended December 31, 2024 was expense of $6.7 million. Other income for the year ended December 31, 2025 was mainly due to the reversal of the previously-recognized $4.5 million suspended liability expense associated with the Reverse Stock Split cash true-up provision contained in the Series A Warrants issued in the August 2024 offering. The reversal resulted from the repricing of the warrants in August 2025, as further described in “Note 7, Equity and Debt Financings—Convertible Note Financing.” Other income also included approximately $16,000 in interest income. These amounts were partially offset by $20,000 interest expense and $13,000 loss on sale of property and equipment. Other expense for the year ended December 31, 2024 was made up of $5.0 million in suspended liability expense associated with the Reverse Stock Split cash true-up payment provision in the Series A Warrants, as well as approximately $977,000 in interest expense and $709,000 in settlement expense.

Net Loss

Our net loss for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 was $136.52 million and $713.5 million, respectively. The reduction in the net loss for the year ended December 31, 2025 reflects increased net sales, improved gross margins on inventory sold, notwithstanding the one-time adjustment for obsolete inventory, and the absence of the prior-year warrant-related expense, partially offset by higher selling, general, and administrative expenses. The net loss in the year ended December 31, 2024 was primarily the result of the $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, as well as ~~the~~ increased interest ~~due~~associated towith the 3i Note (as defined in “Note 7, “Equity and Debt Financings~~—Convertible Note Financing~~”) and increased settlement expense.

Liquidity and Capital Resources

Overview

Our operations have been financed primarily through net proceeds from sales of ~~our~~equity ~~common~~securities ~~stock~~ and ~~equity~~issuances ~~and~~of third-party debt ~~financings.~~and working capital loans. As of December 31, ~~2024~~2025 and ~~2023~~2024, our current assets exceeded current liabilities by $26.0 million and $42.30 million, respectively, and we had cash and cash equivalents of $~~548,000~~3.0 million and $30.95 million, respectively.

We generally consider our short-term liquidity requirements to consist of those items that are expected to be incurred within the next 12 months and believe those requirements to consist primarily of funds necessary to pay operating expenses, interest, and principal payments on our debt.

As of December 31, ~~2024~~ 2025, our short-term liquidity requirements included (a) principal debt payments totaling approximately $3231,000 ~~net of amortization~~, (b) lease obligation payments of approximately $~~256~~337,000, including imputed interest, and (c) $5.0.6 million in ~~suspended liability~~accrued ~~expense~~expenses, ~~due~~accounts topayable, ~~the~~and ~~Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public~~other ~~Offering~~current liabilities.

43We generally consider our long-term liquidity requirements to consist of those items that are expected to be incurred beyond the next 12 months. Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenue and profit from operations. We expect to continue to incur additional losses for the foreseeable future, and we may need to raise additional debt or equity financing to expand

We generally consider our long-term liquidity requirements to consist of those items that are expected to be incurred beyond the next 12 months. Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenue and profit from operations. We expect to continue to incur additional losses for the foreseeable future, and we may need to raise additional debt or equity financing to expand our presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish our long-term business plans over the next several years. There can be no assurance as to the availability or terms upon which such financing and capital might be available to us. For the years ended December 31, 2024 and 2023, we sustained recurring losses and negative cash flows from operations. These factors raise substantial doubt about our ability to continue as a going concern within 12 months after the date the financial statements for the year ended December 31, 2024 are issued. However, management is working to address its cash flow challenges, including by raising additional capital, managing inventory levels, identifying alternative supply chain resources, and managing operational expenses. For additional information regarding risks associated with our ability to continue as a going concern, please see the risk factor titled “Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern” in Item 1A, “Risk Factors” of this Annual Report.40

our presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish our long-term business plans over the next several years. There can be no assurance as to the availability or terms upon which such financing and capital might be available to us. For the years ended December 31, 2025 and 2024, we sustained recurring losses and negative cash flows from operations. These factors raise substantial doubt about our ability to continue as a going concern within 12 months after the date the financial statements for the year ended December 31, 2025 are issued. However, management is working to address its cash flow challenges, including by raising additional capital, managing inventory levels, identifying alternative supply chain resources, and managing operational expenses. For additional information regarding risks associated with our ability to continue as a going concern, please see the risk factor titled “Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern” in Item 1A, “Risk Factors” of this Annual Report.

Financing Obligations

As of December 31, ~~2024~~2025, our long-term debt totaled $~~230~~197,000, comprised of $~~143~~139,000 outstanding under a COVID-19 Economic Injury Disaster Loan, and $8458,000 outstanding under vehicle financing arrangements. In August 2025, ~~and~~we repaid an equipment loan ~~for~~with ~~$3,000~~an interest rate of 5.8%. In January 2024, we repaid $62,500 in principal on a stockholder promissory note with an interest rate of 10.0%, and in August 2024, we repaid two shareholder loans with principal of $500,000 and $200,000, respectively, both with interest rates of 10.0%. In February and March 2024, we sold three vehicles including repayment of the related vehicle loans with interest rates of 5.5%-5.9% in the total amount of approximately $88,000, which included principal and interest. In August 2024, we repaid a short-term convertible note for a total of $2.7 million including principal, interest, and fees. This represents reduction of debt by $3.0 million and additional reduction in lease liability of $2.3 million in 2024 and 2025, an overall improvement to our liquidity over the past two years.

Stockholder Promissory Notes

Stockholder promissory notes had an outstanding principal balance of $0 as of December 31, 2024, as they were repaid in August 2024. See Note 6 - Stockholder Promissory Notes for further information on stockholder promissory notes.

Vehicle Financing Arrangements

As of December 31, ~~2024~~ 2025, the Company has three notes payable to GM Financial for vehicles. In ~~addition, in~~ April 2022, the Company secured a commercial line of up to $300,000 to be used to finance vehicle purchases, which was increased to $350,000 in April 2023, renewed in April 2024 and April 2025 for the same amount, and expires in April ~~2025~~ 2026, which we plan to renew again for the same amount. The notes are payable in aggregate monthly installments of approximately $2,560, including interest at rates ranging from 6.1% to 7.3% per annum, mature at various dates from October 2027 to May 2028, and are secured by the related vehicles. ~~Two~~ ~~of the notes are personally guaranteed by a co-founder of the Company. A separate vehicle financing note has been repaid in connection with the sale of the related vehicle.~~ See “Note 5, Long-Term Debt.”

Convertible Note Financing

On December 27, 2023, we entered into a securities purchase agreement with 3i, LP (“3i”) pursuant to which we sold, and 3i purchased, the 3i Note in the aggregate original principal amount of $2,750,000, for gross proceeds of $2.5 million. On August 8, 2024, in connection with the closing of the August 2024 Public Offering, we repaid the 3i Note, and our obligations under the 3i Note were fully satisfied and discharged. Prior to the closing of the August 2024 Public Offering, we had issued 415 shares of common stock (post-Reverse Stock Split) for the payment of $90,839 in interest.

Equity Line of Credit

On December 27, 2023, we entered into the Common Stock Purchase Agreement, pursuant to which we had the right, but not the obligation, to sell to Tumim Stone Capital, LLC (“Tumim”), and Tumim was obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price of newly issued common stock and (b) the Exchange Cap (as defined in the purchase agreement) (the “Equity Line of Credit”). In connection with the August 2024 Public Offering, we mutually agreed with Tumim to terminate the Equity Line of Credit, effective immediately upon the closing of the August 2024 Public Offering. Prior to the closing of the August 2024 Public Offering, we had sold 4,336 shares of common stock (post-Reverse Stock Split) under the Equity Line of Credit for an aggregate amount of $828,491, of which $434,958 was used to repay a portion of the balance under the 3i Note, consisting of $380,042 to the loan principal, $34,204 to interest, and $20,712 as a redemption premium.

Operating Lease Liabilities

Our estimated future obligations consist of total operating lease liabilities. As of December 31, ~~2024~~2025, we had $~~799~~710,000 in total operating lease liabilities, including the current portion.

Other Indebtedness

As of December 31, ~~2024~~ 2025, our long-term debt totaled $~~230~~197,~~170~~000, including the current portion, which consists of $31,~~758~~000.

Cash Flows

The following table shows a summary of our cash flows for the periods presented:

	Years Ended December 31,
	2024			2023
	2025			2024
Net cash used in operating activities	$	(96,~~562~~149,~~545~~263	)	$	(59,~~531~~562,~~232~~545	)
Net cash provided by investing activities	$	~~113~~4,~~408~~250		$	16113,~~578~~408
Net cash provided by financing activities	$	68,~~064~~566,~~004~~544		$	26,~~246~~064,~~108~~004

Cash flows used in operating activities

Our largest source of operating cash is cash ~~collection~~collected from sales of our products. Our primary ~~use~~uses of cash for operating activities ~~are~~include purchases ~~related~~of toinventory, ~~legal~~as ~~and~~well ~~professional fees~~as selling, ~~sales~~general, and ~~marketing~~administrative expenses including salaries and benefits, legal and ~~research~~professional fees, and ~~development~~sales and marketing expenses. In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from sales of our common stock.

We generated negative cash flows from operating activities of $9.6.1 million for the year ended December 31, ~~2024~~2025, compared to negative cash flows of $59.56 million for the corresponding period in ~~2023~~2024. The decrease in cash used in operating activities was primarily attributable to lower net losses and favorable changes in working capital during 2025. Factors affecting operating cash flows during the periods included:

·● For the year ended December 31, ~~2024~~2025, our net loss of $136.52 million ~~was~~adjusted ~~reduced~~for byseveral non-cash ~~transactions~~items, including ~~approximately~~stock-based compensation of $51.02 million, issuance of common stock in ~~suspended~~exchange ~~liability~~for services of $490,000, depreciation of $117,000, non-cash expense ~~due~~related to ~~the~~asset ~~Reverse~~disposals ~~Stock~~of ~~Split~~$21,000, ~~cash~~and ~~true-up~~loss ~~payment~~on ~~provision~~sale inof ~~the~~property ~~Series~~and Aequipment ~~Warrants~~of we$13,000. ~~sold~~These inadjustments also reflect the ~~August~~impact ~~2024~~of ~~Public~~a ~~Offering,~~decrease ~~amortization~~in ofthe ~~convertible~~suspended ~~note~~liability ~~costs~~associated ofwith ~~approximately~~the ~~$667,000,~~cash ~~stock~~true-~~based~~up ~~compensation~~payments ofrelated ~~$617,000,~~to ~~stock-based~~the ~~settlement~~Reverse ofStock ~~$209,000,~~Split ~~and~~provision ~~depreciation~~in ofthe ~~$174,000~~Series A Warrants. For the year ended December 31, ~~2023~~2024, our net loss of $713.5 million ~~was~~included ~~reduced~~several by non-cash ~~transactions~~items, including approximately $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, amortization of convertible note costs of approximately $667,000, stock-based compensation of $~~560~~617,000, stock-based settlement of $~~252~~209,000, and depreciation of $~~206~~174,000.

·● Cash provided /by ~~(used)~~a bydecrease ~~accounts~~in ~~receivable~~inventory for the year ended December 31, 2025 was ($~~458~~2.0 million,~~000)~~ and ~~$162,000~~cash used by an increase in inventory for the ~~years~~year ended December 31, 2024 ~~and~~was ~~2023,~~$1.0 ~~respectively~~million, ~~representing~~while ancash ~~increase~~provided by a decrease in ~~accounts~~prepaid ~~receivable~~inventory for the year ended December 31, ~~2024~~2025 was $1.3 million, and acash ~~decrease~~used by an increase in ~~accounts~~prepaid ~~receivable~~inventory for the year ended December 31, ~~2023~~2024 was $1.4 ~~Sales~~million. ~~are~~These ~~generally~~changes ~~collected~~primarily ~~within~~reflect 30the totiming 45of ~~days.~~significant ~~These~~inventory ~~changes~~purchases ~~are~~and ~~mainly~~advance ~~due~~payments to ~~timing~~suppliers. ~~between~~Turnaround ~~sales~~time ~~being~~for ~~recognized~~receiving ~~and~~inventory ~~payment~~from ~~being~~foreign ~~received~~sources can take up to 120 days, with prepayments required.

·● Cash ~~used for increases in (or~~ provided by ~~decreases~~/ (used in) ~~inventory~~other ~~and~~operating ~~prepaid~~activities ~~inventories~~such ~~were~~as ~~$2.5~~changes ~~million~~in ~~and~~accounts ~~($682,000)~~receivable ~~for the years ended December 31, 2024~~ and ~~2023,~~accounts ~~respectively.~~payable ~~These changes are~~ primarily ~~due~~reflect tonormal ~~the~~ timing ofdifferences ~~significant~~in ~~purchases~~customer collections and ~~prepayments~~vendor ofpayments ~~inventory.~~and ~~Turnaround~~were ~~time~~not ~~for~~significant ~~receiving~~drivers ~~inventory~~of ~~from~~operating ~~foreign~~cash ~~sources~~flows ~~can~~during ~~take~~the upperiods ~~to 120 days, with prepayments required~~presented.

45Cash flows provided by investing activities

Cash ~~flows~~ provided by /investing ~~(used~~activities ~~in)~~was ~~investing activities~~$4,000 for the year ended December 31, 2025 and was related to selling some small vehicles.

Cash ~~provided by investing activities~~ ~~was $113,000 for the year ended December 31, 2024. Cash~~ used for capital purchases of property and equipment for quality assurance and leasehold improvements to our testing lab totaled $19,000 during the year ended December 31, ~~2023~~2024. This was offset by net proceeds of $~~132~~133,000 received for the sale and disposal of property and equipment during the year ended December 31, 2024, which included property and equipment and leasehold improvements related to the warehouse lease terminated in September 2024, as well as the sale of three vehicles.

Cash provided by investing activities was $17,000 for the year ended December 31, 2023. Cash used for capital purchases of property and equipment related to research and development, quality assurance, and logistics equipment was $20,000 during the year ended December 31, 2023. This was offset by net proceeds of $37,000 received for the sale and disposal of property and equipment during the year ended December 31, 2023.

Cash flows provided by financing activities

Cash provided by financing activities was $8.6 million for the year ended December 31, 2025. During that year, we had net proceeds from exercise of warrants totaling $5.7 million, net proceeds from the issuance of common stock totaling $2.9 million, offset by principal payments on long-term debt totaling $33,000.

Cash provided by financing activities was $6.1 million for the year ended December 31, 2024. For the year ended December 31, 2024, we paid down debt principal of $3.6 million, which was offset by net cash proceeds of $9.5 million from issuance of common stock and $185,000 net cash proceeds from exercise of warrants.

Cash provided by financing activities was $2.2 million for the year ended December 31, 2023. For the year ended December 31, 2023, we paid down debt principal of $224,000, which was offset by net cash proceeds of $2.4 million from incurrence of short-term debt and net cash proceeds of $50,000 from the exercise of warrants.42

Critical Accounting Estimates

The above discussion and analysis of our financial condition and results of operations is based upon our financial statements. The preparation of financial statements in conformity with ~~the generally accepted accounting principles in the United States (“~~GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. These estimates involve judgments that are inherently uncertain and subject to change as future events and conditions evolve. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the ~~consolidated~~ financial statements prospectively from the date of the change in the estimate.

~~Critical~~A critical accounting ~~estimates~~estimate ~~are those~~is one that weinvolves ~~consider~~a tosignificant bedegree ~~the~~of ~~most~~judgment ~~important~~or incomplexity ~~portraying our financial condition~~ and ~~results~~where ofa ~~operations~~different ~~and~~assumption ~~also~~could reasonably ~~require~~have ~~the~~a ~~greatest number~~material ofimpact ~~judgments~~on byour ~~management.~~financial ~~Judgments~~condition or ~~uncertainties~~results ~~regarding~~of ~~the~~operations. ~~application~~The ofcritical ~~these~~accounting ~~policies~~estimates ~~may~~below ~~result~~are inthose that ~~materially~~we ~~different amounts~~consider ~~being~~to ~~reported~~be ~~under~~the ~~different~~most ~~conditions~~important orin ~~using~~portraying ~~different~~our ~~assumptions.~~financial Wecondition ~~consider~~and ~~the~~results ~~following~~of ~~policies~~operations toand bealso require the ~~most critical~~greatest innumber ~~understanding~~of ~~the~~ judgments ~~that~~by ~~are involved in preparing the financial statements~~management.

46Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using first-in, first-out method. Net realizable value represents the estimated selling price in the ordinary course of business less reasonably predictable costs of sales.

Although our products have long shelf lives when stored properly, inventory may become obsolete due to technological changes, product redesigns, or shifts in consumer demand. Management regularly evaluates inventory quantities on hand relative to forecasted demand, product life cycles, and market conditions, and records adjustments to the valuation of inventory using the allowance method when necessary.

Leases

We determine if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets represent our right to use an underlying asset during the lease term, and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on our balance sheets. We do not have any finance leases.

We recognize operating lease assets and lease liabilities in the balance sheet on the lease commencement date, based on the present value of the outstanding lease payments over the reasonably certain lease term. The lease term includes the non-cancelable period at the lease commencement date, plus any additional periods covered by an option to extend (or not to terminate) the lease that is reasonably certain to be exercised, or an option to extend (or not to terminate) a lease that is controlled by the lessor.

We discount unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, our incremental borrowing rate.

See “Note 8, Commitments and Contingencies,” to our financial statements within this Annual Report for additional information, including more details of our accounting policy elections and disclosures and remaining minimum operating lease commitments.

Property and Equipment

Property and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related assets as follows:

Vehicles and transportation equipment		5 – 7 years
Office furniture and equipment		3 – 7 years
Manufacturing equipment		3 – 10 years
Manufacturing equipment		3 – 10 years
Office furniture and equipment		3 – 7 years
Warehouse equipment		3 – 10 years
QA equipment		3 – 10 years
Tooling and molds		5 – 10 years

Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.

Useful life is estimated for each item at the time of purchase based on the typical useful life in our experience and best judgment, and remaining useful life of existing assets is evaluated regularly. If an estimated useful life were to be inaccurate, there would not be a material effect on our financials, and the estimated depreciation would be trued up at the time of disposal or impairment. It is our experience that the estimated useful lives of our assets are generally materially accurate.

Leases

We recognize operating lease assets and lease liabilities in the consolidated balance sheets on the lease commencement date, based on the present value of the outstanding lease payments over the reasonably certain lease term. The lease term includes the non-cancelable period at the lease commencement date, plus any additional periods covered by an option to extend (or not to terminate) the lease that is reasonably certain to be exercised, or an option to extend (or not to terminate) a lease that is controlled by the lessor.

We discount unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, our incremental borrowing rate (IBR).

See Note 8, “Commitments and Contingencies,” of our consolidated financial statements within this Annual Report for further information, including more details of our accounting policy elections and disclosures and remaining minimum operating lease commitments.

Revenue Recognition

Our revenue is generated from the sale of products consisting primarily of batteries and accessories. We recognize revenue when control of goods or services is transferred to our customers in an amount that reflects the consideration we are expected to be entitled to in exchange for those goods or services. Revenue is recognized upon shipment or delivery to the customer, as that is when the customer obtains control of the promised goods and our performance obligation is considered satisfied.

Warrants

Warrants are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. See “Note 7~~—Equity~~, Equity and Debt Financings” and “Note 9—, Stockholders’ Equity” in our accompanying ~~consolidated~~ financial statements for ~~information~~ information on the warrants. Changes in assumptions used to estimate fair value could occur from stock pricing volatility depending on our performance and our position in the industry and changes in market interest rates which can result in materially different results.

Stock-Based Compensation

We use the Black-Scholes option-pricing model to determine the fair value of option grants. In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of ~~units~~options, volatility of our ~~future~~stock ~~share~~ price, risk-free interest rates, future dividend yields and estimated forfeitures at the initial grant date. Restricted stock unit awards are valued based on the closing trading price of our common stock on the date of grant. Changes ~~in assumptions used~~ to ~~estimate~~these ~~fair~~assumptions ~~value~~or estimates could ~~occur~~result ~~from stock pricing volatility depending on our performance and our position~~ in ~~the~~significant ~~industry and~~ changes in ~~market~~the ~~interest rates which can result in materially different results~~valuations.

Income Taxes

Effective November 1, 2021, the Company converted from an LLC to a C corporation and, as a result, became subject to corporate federal and state income taxes. Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that will be in effect for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. We believe it is more likely than not that forecasted income, together with future reversals of existing taxable temporary differences, will be sufficient to recover our deferred tax assets. In the event that we determine all, or part of our net deferred tax assets are not realizable in the future, we will record an adjustment to the valuation allowance and a corresponding charge to earnings in the period such determination is made.

The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of US GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and results of operations. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recorded in the ~~consolidated~~ financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). As of December 31, 2024 and 2023, we have not recorded any income tax provision/(benefit) resulting from the CARES Act, mainly due to our history of net operating losses.44

See “Note 11—, Income Taxes” of to our ~~consolidated~~ financial statements within this Annual Report for further information on our income taxes.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by Item 305 of Regulation S-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for by this Item 8 is found in a separate section of this Annual Report starting on page F-1. See the “Index to Financial Statements” on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, for our Company. Consequently, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act as of December 31, ~~2024~~2025. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level as of December 31, ~~2024~~2025.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. “Internal control over financial reporting,” as defined in Rule 13a-15(f) under the Exchange Act, means a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management, with the participation and supervision of our principal executive officer and our principal financial and accounting officer, assessed the effectiveness of our internal control over financial reporting.

In making this assessment, our management used the criteria set forth in Internal Control – Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, ~~2024~~2025.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm due to an exemption established by SEC rules for emerging growth companies.

Changes in Internal Control Over Financial Reporting

During the three months ended December 31, ~~2024~~2025, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

Limitation on Effectiveness of Controls and Procedures

In designing and evaluating our controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In assessing whether our disclosure controls and procedures were effective at a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. There are inherent limitations to the effectiveness of any system of controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 9B. OTHER INFORMATION

Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications

Our directors and officers may enter into trading plans or other arrangements with financial institutions to purchase or sell shares of our common stock, which plans or arrangements are intended to comply with the affirmative defense provisions of Rule 10b5-1 of the Exchange Act or which may represent a non-Rule 10b5-1 trading arrangement, as defined under Item 408(a) of Regulation S-K.

During the three months ended December 31, ~~2024~~2025, none of our directors or officers adopted, terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

Not applicable.

4946

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics, or the Code of Business Conduct and Ethics, which applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Business Conduct and Ethics is available on our website at www.investors.expion360.com in the “Corporate Governance” section of the “Investor Relations” page. In addition, we intend to post on our website all disclosures that are required by law concerning any amendments to, or waivers from, any provision of our Code of Business Conduct and Ethics. The inclusion of our website address in this Annual Report does not include or incorporate by reference the information on the website into this Annual Report.

Insider Trading Policy

We have adopted an Insider Trading Policy governing the purchase, sale and/or other dispositions of our securities by our directors, officers and employees that are reasonably designed to promote compliance with insider trading laws, rules and regulations. The Insider Trading Policy is filed as an exhibit to this Annual Report.

The remaining information required ~~for~~by this item will be included in our definitive proxy statement for our ~~2025~~2026 annual meeting of stockholders (the “~~2025~~ 2026 Proxy Statement"), to be filed with the SEC no later than 120 days after December 31, ~~2024~~2025, and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be included in the ~~2025~~2026 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be included in the ~~2025~~2026 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included in the ~~2025~~2026 Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be included in the ~~2025~~2026 Proxy Statement and is incorporated herein by reference.

5047

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

Our financial statements are listed in the “Index to the Financial Statements,” which appears on page F-1 of this Annual Report.

(a)(2) Financial Statement Schedules

All financial statement schedules are omitted because the information called for is not required or is shown either in the financial statements or the notes thereto.

(a)(3) Exhibits

The following is a list of exhibits filed as part of this Annual Report.

		Incorporated by Reference
Exhibit Number	Description	Form	Exhibit		Filing Date
3.1	Articles of Incorporation of the Company, effective as of November 4, 2021	S-1	3.1		3/31/2022
3.2	Certificate of Amendment of Articles of Incorporation, effective as of October 8, 2024	8-K	3.1		10/7/2024
3.3	Amended and Restated Bylaws of the Company, dated August 21, 2024	8-K	3.1		8/27/2024
4.1	Form of the Company’s Common Stock Certificate	S-1	4.1		3/31/2022
4.2	Form of Representative’s Warrant Agreement	S-1	4.4		3/31/2022
4.3	Form of Senior Secured Promissory Note issued to bridge loan investors	S-1	4.5		3/31/2022
4.4	Description of Capital Stock	-	-		-
4.5	March 2022 Form of ~~Warrant~~Common ~~with~~Stock ~~an Exercise Price of $2.90~~Warrant	10S-K1	10.151		3/3031/~~2023~~2022
4.6	March 2023 Form of Warrant with an Exercise Price of $32.3290	10-K	10.1615		3/30/2023
4.7	March 2023 Form of ~~Convertible~~Warrant ~~Note~~with an Exercise Price of $3.32	810-K	410.116		123/2930/2023
4.8	December 2023 Form of ~~Pre-Funded~~Convertible ~~Warrant~~Note	8-K	4.1		812/929/~~2024~~2023
4.9	August 2024 Form of ~~Series~~Pre-Funded A Warrant	8-K	4.21		8/9/2024
4.10	August 2024 Form of Series BA Warrant	8-K	4.32		8/9/2024
10.1	Form of Common Stock Warrant Issued to Selling Stockholders	S-1	10.1		3/31/2022
4.11	August 2024 Form of Series B Warrant	8-K	4.3		8/9/2024
4.12*	October 2025 Form of Pre-Funded Warrant	8-K	4.1		10/17/2025
4.13*	October 2025 Form of Common Warrant	8-K	4.2		10/17/2025
4.14	January 2025 Form of Pre-Funded Warrant	8-K	4.1		1/3/2025
4.15	January 2025 Form of Common Warrant	8-K	4.2		1/3/2025
10.1†	Non-Employee Director Compensation Policy, effective October 16, 2025	10-Q	10.6		11/13/2025
10.2†	Expion360 Inc. 2021 Incentive Award Plan	S-1	10.2		3/31/2022
10.3†	Amendment to Expion360 Inc. 2021 Incentive Award Plan	10-K	10.3	3/28/2024	~~3/28/2024~~
10.4†	Expion360 Inc. 2021 Employee Stock Purchase Plan	S-1	10.3		3/31/2022
10.5	~~Form~~Commercial Lease of ~~Security~~premises ~~Agreement~~at ~~Issued~~2025 toSW ~~Bridge~~Deerhound ~~Loan~~Avenue ~~Investors~~Redmond, OR	S-1	10.78		3/31/2022
10.6	Commercial Lease of premises at 2045 SW Deerhound Avenue Redmond, OR	S-1	10.8		3/31/2022
10.6*	Underwriting Agreement, dated August 7, 2024, between Expion360 Inc. and Aegis Capital Corp.	8-K	1.1		8/9/2024
10.7	Commercial Lease of premises at 1266 SW Lake Blvd., Redmond, OR	S-1	10.11		3/31/2022
10.7*	At-The-Market Issuance Sales Agreement, dated December 12, 2025, by and between Expion360 Inc. and Aegis Capital Corp.	8-K	10.1		12/15/2025
10.8†	~~Amended and Restated~~ Employment Agreement, between ~~Brian~~Carson ~~Schaffner~~Heagen and Expion360 Inc., dated ~~January~~April 261, ~~2023~~2025	810-KQ	10.21		25/0115/~~2023~~2025
10.9†	Amended and Restated Employment Agreement, between Paul Shoun and Expion360 Inc., dated January 26, 2023	8-K	10.3		2/01/2023
10.10†	Amended and Restated Employment Agreement, between Greg Aydelott and Expion360 Inc., dated January 26, 2023	8-K	10.4		2/01/2023
10.11*	Securities Purchase Agreement, dated December 27, 2023, between Expion360 Inc. and 3i, LP	8-K	10.1		12/29/2023
10.12*	Common Stock Purchase Agreement, dated December 27, 2023, between Expion360 Inc. and Tumim Stone Capital, LLC	8-K	10.2		12/29/2023

5148

10.13*	Registration Rights Agreement, dated December 27, 2023, between Expion360 Inc. and Tumim Stone Capital, LLC	8-K		10.3			12/29/2023
10.9†	Amended and Restated Employment Agreement, by and between the Company and Shawna Bowin, effective September 3, 2025	10-Q	10.1		11/13/2025
10.14*	Underwriting Agreement, dated August 7, 2024, between Expion360 Inc. and Aegis Capital Corp.	8-K		1.1			8/9/2024
10.10*	Form of Securities Purchase Agreement, dated as of January 2, 2025, by and among the Company and the purchasers on the signature pages thereto	8-K	10.1		1/3/2025
21.1	Subsidiaries of the Company	10-K		21.1			3/28/2024
10.11*	Form of Registration Rights Agreement, dated as of January 2, 2025, by and among the Company and the purchasers on the signature pages thereto	8-K	10.2		1/3/2025
19.1	Expion360 Inc. Insider Trading Policy	-			-			-
10.12*	Form of Securities Purchase Agreement, dated October 16, 2025	8-K	10.1		10/17/2025
23.1	Consent of M&K CPAS PLLC	-			-			-
10.13	Severance Agreement, Consulting Agreement and General Release, by and between the Company and Brian Schaffner, dated October 16, 2025	8-K	10.2		10/17/2025
24.1	Power of Attorney (reference is made to the signature page hereto)	-			-			-
10.14	Severance Agreement and General Release, by and between the Company and Paul Shoun, dated October 16, 2025	8-K	10.3		10/17/2025
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-			-			-
10.15*†	Employment Agreement, by and between the Company and Joseph Hammer, October 16, 2025	8-K	10.4		10/17/2025
32.1#	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	-			-			-
10.16†	Form of Indemnification Agreement	-	-		-
97.1	Expion360 Inc. Executive Compensation Clawback Policy	10-K			97.1			3/28/2024
21.1	Subsidiaries of the Company	10-K	21.1		3/28/2024
101.INS	XBRL Instance Document.	-			-			-
19.1	Expion360 Inc. Insider Trading Policy	-		-		-
101.SCH	XBRL Taxonomy Extension Schema Document.	-			-			-
23.1	Consent of M&K CPAS PLLC	-		-		-
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	-			-			-
24.1	Power of Attorney (reference is made to the signature page hereto)	-		-		-
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	-			-			-
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-		-		-
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	-			-			-
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	-		-		-
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	-			-			-
32.1#	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	-		-		-
104	Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).	-			-			-
32.2#	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	-		-		-
97.1	Expion360 Inc. Executive Compensation Clawback Policy	10-K		97.1		3/28/2024
101.INS	XBRL Instance Document.	-		-		-
101.SCH	XBRL Taxonomy Extension Schema Document.	-		-		-
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	-		-		-
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	-		-		-
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	-		-		-
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	-		-		-
104	Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).	-		-		-

† Indicates a management contract or compensatory plan or arrangement.

# This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

	#	The certification shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act, and shall not be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in any such filing.
	*	Certain of the schedules (and similar attachments) to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K under the Securities Act because they do not contain information material to an investment decision and that information is not otherwise disclosed in the exhibit or the disclosure document. The registrant agrees to furnish a copy of all omitted schedules (or similar attachments) to the Commission upon its request.

* The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

ITEM 16. FORM 10-K SUMMARY

None.

5249

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

		Expion360 Inc.
		By:	/s/ ~~Brian~~Joseph ~~Schaffner~~Hammer
			Brian Schaffner
			Joseph Hammer
			Chief Executive Officer and Interim Chief Financial Officer (Principal Executive, Financial and Accounting Officer)
			Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
Date:	March 3116, ~~2025~~2026

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints ~~Brian~~Joseph ~~Schaffner~~Hammer and Shawna Bowin, and each of them, as his or her true and lawful attorneys-in-fact, proxies and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with any exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact, proxies and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies and agents, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name	Title	Date
/s/ Brian Schaffner	Chief Executive Officer, Interim Chief Financial Officer and Director	March 31, 2025
/s/ Joseph Hammer	Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	March 16, 2026
Brian Schaffner	(Principal Executive, Financial and Accounting Officer)
Joseph Hammer
/s/ George Lefevre	Director	March 31, 2025
/s/ Shawna Bowin	Chief Financial Officer (Principal Financial and Accounting Officer)	March 16, 2026
Shawna Bowin
/s/ Scott Burell	Director	March 16, 2026
Scott Burell
/s/ George Lefevre	Director	March 16, 2026
George Lefevre
/s/ Steven M Shum	Director	March 31, 2025
/s/ Tien Q. Nguyen	Director	March 16, 2026
Steven M. Shum
/s/ Tien Q. Nguyen	Director	March 31, 2025
Tien Q. Nguyen
/s/ Paul Shoun	Chief Operating Officer, President and Chairman of the Board of Directors	March 31, 2025
/s/ Brian Schaffner	Director	March 16, 2026
Paul Shoun
Brian Schaffner
/s/ Steven M. Shum	Director	March 16, 2026
Steven M. Shum

5350

Index to ~~Consolidated~~ Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID # 2738)	F-1
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Stockholders’ Equity (Deficit)	F-5
Statements of Cash Flows	F-6
Notes to the Consolidated Financial Statements	F-8
Notes to the Financial Statements	F-8

5451

FINANCIAL INFORMATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Expion360, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Expion360, Inc. (the Company) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related statements of operations ~~and comprehensive loss~~, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, ~~2024~~2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and negative cash flows from operations, and has a net capital deficiency, each of which are ~~raises~~factors that raise substantial doubt about its ability to continue as a going concern. Management’s plans ~~regarding~~to ~~those~~address ~~matters~~these challenges are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

F-1

Critical Audit Matter

The critical audit ~~matters communicated~~matter communicated below ~~are~~is ~~matters~~a matter arising from the current period audit of the financial statements that ~~were~~was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit ~~matters~~matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matters~~matter below, providing separate opinions on the critical audit ~~matters~~matter or on the accounts or disclosures to which ~~they~~it ~~relate~~relates.

Going Concern

Due to ~~the~~factors ~~recurring~~such as the net loss for the year, ~~and~~negative ~~net~~ cash ~~used~~flows infrom ~~operating~~operations, ~~activities~~and the net capital deficiency, the Company evaluated the need ~~for~~to include a going concern qualification in the financial statements. See discussion in Note 2.

Auditing management’s ~~evaluation~~determination regarding the inclusion of a going concern ~~can~~qualification berequires a significant judgement given the fact that the Company uses management estimates onof future revenues and expenses, as well as assumptions about future fundraising activity, which are not able to be substantiated.

To evaluate the appropriateness of the ~~lack of going~~ going concern qualification, we examined and evaluated the financial information, ~~that~~including ~~was the initial cause along with~~ management’s plans to mitigate ~~the~~ the going concern qualification, and ~~managements~~management’s ~~lack of~~ disclosure on going concern.

/s/ M&K CPAS, PLLC

We have served as the Company’s auditor since 2021.

The Woodlands, TX

March 3116, ~~2025~~2026

F-2

Expion360 Inc.

Balance Sheets

	As of December 31, 2024			As of December 31, 2023
	As of December 31, 2025			As of December 31, 2024
Assets
Current Assets
Cash and cash equivalents	$	~~547~~2,~~565~~969,096		$	3547,~~932,698~~565
Accounts receivable, net		~~613~~718,~~022~~964			~~154~~613,~~935~~022
Inventory		42,~~831~~858,~~461~~780			34,~~825~~831,~~390~~461
Prepaid/in-transit inventory		1318,~~612,686~~440			~~163~~1,~~948~~612,686
Prepaid expenses and other current assets		~~236~~179,~~461~~645			~~189~~236,~~418~~461
Total current assets		7,~~841~~044,~~195~~925			87,~~266~~841,~~389~~195
Property and equipment		~~914~~807,~~081~~083			1914,~~348,326~~081
Accumulated depreciation		(~~430~~478,~~191~~861	)		(430,~~295~~191	)
Property and equipment, net		~~483~~328,~~890~~222			~~918~~483,~~031~~890
Other Assets
Operating leases – right-of-use asset		~~754~~666,~~832~~199			2754,~~662,015~~832
Deposits		2732,~~471~~016			5827,~~896~~471
Total other assets		~~782~~698,~~303~~215			2782,~~720,911~~303
Total assets	$	98,~~107~~071,~~388~~362		$	119,~~905~~107,~~331~~388
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	~~338~~403,~~091~~792		$	~~286~~338,~~985~~091
Customer deposits		482,~~474~~978			1748,~~423~~474
Accrued expenses and other current liabilities		~~187~~221,~~464~~863			~~292~~187,~~515~~464
Convertible note		—			2,082,856
Current portion of operating lease liability		337,246			256,153
Current portion of operating lease liability		256,153			522,764
Current portion of long-term debt		31,058			31,758
Current portion of stockholder promissory notes		—			762,500
Suspended liability		—			4,985,948
Current portion of long-term debt		31,758			50,839
Total current liabilities		996,937			5,847,888
Suspended Liability		4,985,948			—
Long-term debt, net of current portion and discount		166,187			198,412
Total current liabilities		5,847,888			4,015,882
Operating lease liability, net of current portion		372,478			542,764
Long-term debt, net of current portion and discount		198,412			298,442
Total liabilities	$	1,535,602		$	6,589,064
Operating lease liability, net of current portion		542,764			2,241,325
Total liabilities	$	6,589,064		$	6,555,649
Stockholders’ equity
Preferred stock, par value $.001; 20,000,000 shares authorized; zero 0 shares issued and outstanding		—			—
Preferred stock, par value $.001; 20,000,000 shares authorized; 0zero shares issued and outstanding		—			—
Common stock, par value $.001; 200,000,000 shares authorized; 2,096,082 and 69,230 issued and outstanding as of December 31, 2024 and 2023, respectively		2,096			69
Common stock, par value $.001; 200,000,000 shares authorized; 9,781,739 and 2,096,082 issued and outstanding as of December 31, 2025 and 2024, respectively		9,782			2,096
Additional paid-in capital		3747,~~091~~336,~~468~~405			2637,~~445~~091,~~378~~468
Accumulated deficit		(3440,~~575~~810,~~240~~427	)		(2134,~~095~~575,~~765~~240	)
Total stockholders’ equity		26,~~518~~535,~~324~~760			52,~~349~~518,~~682~~324
Total liabilities and stockholders’ equity	$	98,~~107~~071,~~388~~362		$	119,~~905~~107,~~331~~388

The accompanying notes are an integral part of these financial statements.

F-3

Expion360 Inc.

Statements of Operations

	For the Years Ended December 31,
	2024			2023
	2025			2024
Net sales	$	59,~~624~~651,~~939~~870		$	5,~~981~~624,~~134~~939
Cost of sales		48,~~469~~314,~~711~~472			4,~~405~~469,~~611~~711
Gross profit		1,~~155~~337,~~228~~398			1,~~575~~155,~~523~~228
Selling, general and administrative		712,~~909~~040,~~219~~903			87,~~745~~909,~~135~~219
Loss from operations		(610,~~753~~703,~~991~~505	)		(76,~~169~~753,~~612~~991	)
Other (Income) / Expense
Other (income) / expense
Interest income		(8616,~~121~~147	)		(~~125~~86,~~854~~121	)
Interest expense		~~976~~20,~~618~~226			~~124~~976,~~511~~618
Loss on sale of property and equipment		~~146~~13,~~760~~353			3146,~~426~~760
Settlement expense		~~709,900~~—			~~281~~709,~~680~~900
Suspended liability expense		4,985,948			—
Suspended liability expense / (income)		(4,485,948	)		4,985,948
Other income		(6,073	)		(394	)
Other (income) / expense		48			(6,073	)
Total other expense		6,727,032			283,369
Total other (income) / expense		(4,468,468	)		6,727,032
Loss before taxes		(136,~~481~~235,~~023~~037	)		(713,~~452~~481,~~981~~023	)
Tax (income) / expense		~~(1,548~~150	)		3(1,~~293~~548	)
Net loss	$	(136,~~479~~235,~~475~~187	)	$	(713,~~456~~479,~~274~~475	)
Net loss per share (basic and diluted)	$	(211.0313	)	$	(~~108~~21.2503	)
Weighted-average number of common shares outstanding		~~641~~5,~~011~~511,875			68641,~~882~~011

The accompanying notes are an integral part of these financial statements.

F-4

Expion360 Inc.

Statements of Stockholders’ ~~Equity (Deficit)~~ ~~for Years Ended December 31, 2024 and 2023~~Equity

	Common Stock				Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount
Balance at December 31, 2022	68,025	$	68	$	25,246,388		$	(13,639,491	)	$	11,606,965
Proceeds received from cashless exercise of warrants	413		—		(24	)		—			(24	)
Proceeds received from cash exercise of warrants	150		—		49,800			—			49,800
Stock issued as a result of litigation settlement	520		1		251,679			—			251,680
Issuance of warrants	—		—		65,046			—			65,046
Issuance of stock options	—		—		371,071			—			371,071
Issuance of RSUs	—		—		124,249			—			124,249
Settlement of vested RSUs	122		—		—			—			—
Issuance of common stock in exchange for short-term loan costs	—		—		337,169			—			337,169
Net loss	—		—		—			(7,456,274	)		(7,456,274	)
Balance at December 31, 2023	69,230	$	69	$	26,445,378		$	(21,095,765	)	$	5,349,682
Stock issued for ELOC	4,336		4		828,487			—			828,491
Proceeds received from cashless exercise of warrants	16		—		(4	)		—			(4	)
Proceeds received from cash exercise of warrants	—		—		26			—			26
Stock issued for interest payment	414		—		90,839			—			90,839
Issuance of stock options	—		—		464,328			—			464,328
Issuance of RSUs	—		—		141,417			—			141,417
Settlement of vested RSUs	525		—		46,889			—			46,889
Settlement of commitment shares	635		1		(1	)		—			—
Stock issued as a result of litigation settlement	1,000		1		208,999			—			209,000
Issuance shares and pre-funded warrants, follow-on offering, net of issuance costs	500,000		500		8,681,190			—			8,681,690
Issuance of shares and pre-funded warrants, net of issuance costs	500,000		500		8,681,190			—			8,681,690
Proceeds from exercise of Series A warrants	14,900		15		77,555			—			77,570
Proceeds from exercise of Series B warrants	1,294,367		1,296		106,575			—			107,871
Shares issued for true-up upon reverse stock split	210,659		210		(210	)		—			—
Shares issued for true-up upon completion of Reverse Stock Split	210,659		210		(210	)		—			—
Net loss	—		—		—			(13,479,475	)		(13,479,475	)
Balance at December 31, 2023	2,096,082	$	2,096	$	37,091,468		$	(34,575,240	)	$	2,518,324
Balance at December 31, 2024	2,096,082	$	2,096	$	37,091,468		$	(34,575,240	)	$	2,518,324
Proceeds received from cash exercise of Series A warrants	4,384,749		4,386		4,927,430			—			4,931,816
Proceeds received from cash exercise of Series B warrants	85,252		85		8,440			—			8,525
Proceeds received from cash exercise of January 2025 warrants	599,193		599		784,344			—			784,943
Issuance of shares and pre-funded warrants, net of issuance cost	1,661,463		1,661		2,872,524			—			2,874,185
Issuance of stock options	—		—		482,804			—			482,804
Issuance and settlement of RSUs	505,000		505		680,345			—			680,850
Issuance of shares in exchange for services	450,000		450		489,050			—			489,500
Net loss	—		—		—			(6,235,187	)		(6,235,187	)
Balance at December 31, 2025	9,781,739	$	9,782	$	47,336,405		$	(40,810,427	)	$	6,535,760

The accompanying notes are an integral part of these financial statements.

F-5

Expion360 Inc.
Statements of Cash Flows

	For the Years Ended December 31,
	2024			2023
	2025			2024
Cash flows from operating activities
Net loss	$	(136,~~479~~235,~~475~~187	)	$	(713,~~456~~479,~~274~~475	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		~~173~~116,~~973~~645			~~205~~173,~~723~~973
Amortization of convertible note costs		~~667,144~~—			—667,144
Loss on sale of property and equipment		~~146~~13,~~760~~353			3146,~~426~~760
Decrease in allowance for doubtful accounts		—			(18,804	)
Stock-based settlement		—			209,000
Stock-based settlement		209,000			251,680
Stock-based compensation		1,163,654			616,632
Stock-based compensation		616,632			560,365
Issuance of common stock in exchange for services		489,500			—
Decrease in right-of-use assets and lease liabilities		(67,778	)		—
Non-cash expense in exchange for asset disposal		21,420			—
Increase in suspended liability		4,985,948			—
(Increase) / Decrease in inventory valuation		903,717			—
Decrease in right-of-use assets and lease liabilities		—			(67,778	)
Increase / (Decrease) in suspended liability		(4,485,948	)		4,985,948
Changes in operating assets and liabilities:
(Increase) / Decrease in accounts receivable		(458,087	)		161,904
Increase in accounts receivable		(105,942	)		(458,087	)
(Increase) / Decrease in inventory		(1,~~006~~068,~~071~~964	)		~~704~~(1,~~746~~006,071	)
Increase in prepaid/in-transit inventory		(1,448,738	)		(22,338	)
(Increase) / Decrease in prepaid/in-transit inventory		1,294,246			(1,448,738	)
Increase in prepaid expenses and other current assets		(47,043	)		(17,626	)
(Increase) / Decrease in prepaid expenses and other current assets		56,816			(47,043	)
Decrease in deposits		31,425			5,005
(Increase) / Decrease in deposits		(4,545	)		31,425
Increase in accounts payable		5165,~~106~~701			5651,~~735~~106
Increase in customer deposits		31,051			17,365
Increase / (Decrease) in customer deposits		(45,496	)		31,051
Increase / (Decrease) in accrued expenses and other current liabilities		21,819			(13,649	)
Increase in accrued expenses and other current liabilities		34,399			21,819
Increase in right-of-use assets and lease liabilities		9,789			30,510
Increase / (Decrease) in right-of-use assets and lease liabilities		(560	)		9,789
Net cash used in operating activities		(9,562,545	)		(5,531,232	)
Decrease in suspended liability		(500,000	)		—
Net cash used in operating activities		(6,149,263	)		(9,562,545	)
Cash flows from investing activities
Purchases of property and equipment		~~(19,203~~—	)		(2019,~~170~~203	)
Net proceeds from sale of property and equipment		~~132~~4,~~611~~250			36132,~~748~~611
Net cash provided by investing activities		~~113~~4,~~408~~250			16113,~~578~~408
Cash flows from financing activities
Proceed from / (Principal payment on) convertible note		(2,750,000	)		2,420,025
Principal payments on convertible note		—			(2,750,000	)
Principal payments on long-term debt		(~~119~~32,~~111~~925	)		(~~161~~119,~~194~~111	)
Principal payments on stockholder promissory notes		~~(762,500~~—	)		(62762,500	)
Proceeds from exercise of warrants		185,434			49,800
Net proceeds from exercise of warrants		5,725,284			185,434
Settlement of fractional shares for cashless warrant exercise		—			(23	)
Net proceeds from issuance of common stock		2,874,185			9,510,181
Net proceeds from issuance of common stock		9,510,181			—
Net cash provided by financing activities		8,566,544			6,064,004
Net cash provided by financing activities		6,064,004			2,246,108
Net change in cash and cash equivalents		2,421,531			(3,385,133	)
Net change in cash and cash equivalents		(3,385,133	)		(3,268,546	)
Cash and cash equivalents, beginning		547,565			3,932,698
Cash and cash equivalents, beginning		3,932,698			7,201,244
Cash and cash equivalents, ending	$	2,969,096		$	547,565
Cash and cash equivalents, ending		547,565			3,932,698

F-6

Expion360 Inc.

Statements of Cash Flows - Continued

	For the Years Ended December 31,
Supplemental disclosure of cash flow information:	~~2024~~2025			~~2023~~2024
Cash paid for interest	$	~~220~~20,~~714~~894		$	~~121~~220,~~894~~714
Cash paid / (received) for franchise taxes	$	~~(258~~150	)	$	~~1,853~~(258	)
Non-cash financing activities:
Acquisition/modification of operating lease right-of-use asset and lease liability	$	—198,216		$	~~(13,993~~—	)
Issuance of common stock for payment on accrued interest	$	~~90,839~~—		$	—90,839
Issuance of common stock for payment on accrued compensation	$	~~36,029~~—		$	—36,029
Issuance of common stock in exchange for short-term loan costs	$	—		$	(337,169	)

The accompanying notes are an integral part of these financial statements.

F-7

NOTES TO THE FINANCIAL STATEMENTS

1. Organization and Nature of Operations

Expion360 Inc. (~~formerly Yozamp Products Company, LLC dba Expion360) (~~the “Company”) was incorporated in the ~~state~~State of Nevada in November 2021. Effective November 1, 2021, the Company converted to a C corporation. ~~Prior~~The toCompany ~~conversion,~~was ~~the~~originally ~~Company~~formed ~~was~~as a limited liability company ~~(“LLC”) with an indefinite life organized~~ in the State of Oregon in June 2016. The LLC elected to be treated as a Subchapter S corporation effective January 1, 2017. Net profits and losses of the LLC and all distributions were allocated among the members in proportion to the ownership units held. The Original LLC Agreement was amended and restated on January 1, 2021 to add additional members and a non-voting class of member units. Upon conversion to a C corporation, all existing LLC members at the time of conversion were issued shares of the Company’s common stock, par value $0.001 per share and became stockholders of the Company.

The Company designs, assembles, manufactures, and ~~distributes~~sells ~~premium~~ lithium iron phosphate (“LiFePO4”) batteries ~~for~~and ~~RV,~~supporting ~~Marine,~~accessories ~~Golf,~~for ~~Industrial~~recreational vehicles (“RVs”), ~~Residential~~marine, and ~~Off-The-Grid~~industrial ~~needs~~applications. The Company’s ~~uses~~ lithium ~~iron~~battery ~~phosphate~~solutions ~~(“LiFePO4”)~~incorporate innovative ~~batteries.~~concepts ~~LiFePO4~~and have been designed to include some of the most dense and minimal-footprint batteries ~~are~~in ~~considered~~the aRV ~~top~~and ~~choice~~marine ~~for~~industries. ~~high~~The Company’s ~~energy~~customers ~~density~~consist of dealers, ~~dependability~~wholesalers, ~~longevity~~private-label customers, and ~~safety,~~original ~~providing~~equipment ~~the~~manufacturers (“OEMs”) ~~ability~~who then sell its products to ~~power~~end ~~anything~~consumers. The Company currently operates in one reportable business segment, ~~anywhere~~Energy Storage (ES).

2. Summary of Significant Accounting Policies

Basis of Presentation

The ~~accompanying~~ audited financial statements and accompanying notes have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) ~~for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”)~~. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

Unless otherwise noted, all references to shares and stockholders in the accompanying financial statements have been restated retroactively, to reflect the equity structure of the C corporation as of the beginning of the first period presented.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the reported results of operations.

Going Concern~~, Liquidity and Capital Resources~~

The Company’s activities are subject to significant risks and uncertainties, including ~~failing~~that it may be unable to secure additional funding before ~~the Company~~ it achieves ~~sustainable~~profitability ~~revenue~~or ~~and~~positive ~~profit~~cash flow from operations. The Company expects to continue to incur ~~additional~~operating losses for the foreseeable future, and ~~the~~will ~~Company may~~ need to raise additional debt or equity financing to fund working capital, purchase inventory, expand its presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish its long-term business plan ~~over the next several years~~. There can be no assurance that asadditional tofinancing ~~the~~will ~~availability~~be oravailable ~~terms~~on ~~upon~~acceptable ~~which~~terms ~~such~~or ~~financing and~~at ~~capital might be available~~all.

Historically, the Company’s operations have been funded through a combination of sales of equity securities, and issuances of third party debt and working capital loans. As presented in the accompanying financial statements, the Company has sustained recurring losses and negative cash flows from operations and has a significant negative stockholders’ equity balance. The Company incurred net losses of $6.2 million and $13.5 million for the years ended December 31, 2025 and 2024, respectively. The Company had negative flows from operating activities of $6.1 million and $9.6 million for the years ended December 31, 2025 and 2024, respectively. In addition, the Company had accumulated deficits of $40.8 million and $34.6 million as of December 31, 2025 and 2024, respectively. The Company has never achieved profitability or positive cash flows from operations, and may not be able to do so for the foreseeable future. These factors raise substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date that the financial statements for the year ended December 31, ~~2024~~ 2025 are issued. However, management is working to address its ~~cash~~operational and ~~flow~~liquidity challenges, including raising additional capital, managing inventory levels, identifying alternative supply chain resources, and managing operational expenses.

F-8

Historically, the Company’s growth has been funded through a combination of sales of equity interests, third party debt, and working capital loans. The Company’s sales for 2024 decreased 6.0% compared to sales for 2023, as the overall RV market experienced a severe slowdown. For the year ended December 31, 2024, we received net proceeds of $9,510,181 from issuance of common stock and an additional $185,434 from exercise of warrants. For the year ended December 31, 2023, we received net proceeds of $2,420,025 from issuing commitment shares in exchange for a short-term convertible note, and $49,777 from warrant exercises. On April 1, 2022, the Company completed an initial public offering and listing of its shares on the Nasdaq Stock Market (IPO).

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

F-8

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. ~~Actual results could vary materially from the estimates that were used.~~ The Company’s significant accounting estimates include the carrying value of ~~accounts receivable and~~ inventory, the depreciable lives of fixed assets, operating lease assets and liabilities, and stock-based compensation and warrant valuation. Management evaluates its estimates and assumptions on an ongoing basis using historical experience, existing and known circumstances, authoritative accounting guidance, and other factors management believes to be reasonable and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the financial statements. Actual results could differ from these estimates, which may result in material effects on the Company’s financial condition, results of operations and liquidity. To the extent there are differences between these estimates and actual results, the Company’s financial statements may be materially impacted.

Future events, including the extent and the duration of the COVID-19-related economic impacts and their effects, cannot be predicted with certainty and, accordingly, the Company’s accounting estimates require the exercise of judgment.Inventory

Inventory is stated at the lower of cost (first in, first out) or net realizable value and consists of batteries and accessories, resale items, components, and related landing costs. As of December 31, 2025 and 2024, the Company had inventory that consisted of finished assemblies totaling $2,269,267 and $4,077,013, respectively, and raw materials (inventory components, parts, and packaging) totaling $589,513 and $754,448, respectively. The valuation of inventory includes fixed production overhead costs based on normal capacity of the assembly warehouse.

The Company periodically reviews its inventory for evidence of slow-moving or obsolete inventory and provides for an allowance when considered necessary. In 2025, the Company wrote off and wrote down $919,730 in obsolete inventory. A portion of the obsolete inventory was sold for scrap or recycled, and a portion has been retained to use in marketing promotions and was either written down to its estimated net realizable value or written off completely. The value of obsolete inventory that remains on the Balance Sheet as of December 31, 2025 is $547,294.

The Company prepays for inventory purchases from foreign suppliers. Prepaid inventory totaled $318,440 and $1,612,686 at December 31, 2025 and 2024, respectively, and included inventory in transit where title had passed to the Company but had not yet been physically received.

Vendor and Foreign Concentrations of Inventory Suppliers

During the years ended December 31, 2025 and 2024, approximately 55% and 82%, respectively, of inventory purchases were made from foreign suppliers in Asia. Any adverse change in either the economic or political conditions abroad could negatively impact the Company’s supply chain. The inability to obtain product to meet sales demand could adversely affect the Company’s results of operations. However, the Company has secured a secondary source for lithium iron phosphate cells used in its batteries from a supplier in Europe, enabling the Company to source materials outside of Asia in the event it becomes necessary to do so.

Cash and Cash Equivalents

The Company considers all cash amounts which are not subject to withdrawal restrictions or penalties, and all highly liquid investments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents balances with high-quality financial institutions located in the United States. Cash accounts are secured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. At times, balances may exceed federally insured limits. ~~Investment accounts are placed in funds consisting of US Treasury-related ultra-short paper, which earned $86,121 and $125,755 during the years ended December 31, 2024 and 2023, respectively.~~ The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to its cash and cash equivalents balances. As of December 31, ~~2024~~2025, ~~cash~~the ~~balances~~Company ~~exceeded~~had ~~FDIC~~investment ~~limits~~accounts bywith a balance of $~~277~~1,~~522~~516,145 ~~and investment accounts~~that ~~totaling~~was ~~$712 are~~ invested in USU.S. ~~Treasury-related~~treasury ~~ultra-short paper~~securities.

F-9

Revenue Recognition

The Company’s revenue is generated from the sale of products consisting primarily of batteries and accessories. The Company recognizes revenue when control of goods is transferred to its customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. To determine revenue recognition, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the performance obligation(s) are satisfied. Revenue is recognized upon shipment or delivery to the customer, as that is when the customer obtains control of the promised goods and the Company’s performance obligation is considered satisfied. As such, accounts receivable is recorded at the time of shipment or will call, when the Company’s right to the consideration becomes unconditional and the Company determines there are no uncertainties regarding payment terms or transfer of control.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, are due within a year or less, and generally do not bear any interest. The Company performs ongoing credit evaluations of its customers and generally requires no collateral. An allowance for uncollectible accounts is recorded to reduce accounts receivable to the estimated amount that will be collected. The allowance is based upon management’s review of the accounts receivable aging and specific identification of potentially uncollectible balances. Recoveries of accounts previously written off and adjustments to the allowance for uncollectible accounts are recorded as adjustments to bad debt expense. There ~~was~~were no allowances ~~allowance~~ for doubtful accounts as of December 31, ~~2024~~2025 or ~~December~~ December 31, ~~2023~~2024, as management believed all outstanding amounts to be fully collectible.

Concentration of Major Customers

A customer is considered a major customer when net revenue attributable to the customer exceeds 10% of total revenue for the period or the outstanding accounts receivable balance exceeds 10% of total accounts receivable balances.

During the year ended December 31, 2025, sales to four customers totaled $5,795,965, or approximately 60% of our total sales, and represented 69% of our outstanding accounts receivable at December 31, 2025. During the year ended December 31, 2024, sales to one customer totaled $726,292, or approximately 14% of our total sales and represented approximately 6% of our outstanding accounts receivable at December 31, 2024. Four other customers had accounts receivable balances totaling $339,111, representing 60% of total accounts receivable as of December 31, 2024. Sales to each of our other customers did not exceed 10% during the respective periods.

Customer Deposits

As of December 31, 2025 ~~2024~~ and ~~December 31~~2024, ~~2023,~~ the Company had customer deposits totaling $482,~~474~~ 978 and $1748,~~423~~474, respectively.

~~F-9~~Leases

~~Inventory~~Contractual arrangements that meet the definition of a lease are classified as an operating lease or finance lease at inception. The Company does not have any finance leases.

~~Inventory~~Operating islease ~~stated at the lower~~ right-of ~~cost~~ -use (~~first~~“ROU”) ~~in, first~~assets ~~out)~~represent orthe ~~net~~Company’s ~~realizable~~right ~~value~~to ~~and~~use ~~consists~~an ofunderlying ~~batteries~~asset ~~and~~during ~~accessories,~~the ~~resale~~lease ~~items~~term, ~~components,~~ and ~~related~~operating ~~landing costs. As~~lease ofliabilities ~~December~~represent ~~31, 2024 and December 31, 2023,~~ the Company’s ~~had~~obligation ~~inventory~~to ~~that~~make ~~consisted~~lease ofpayments ~~finished~~arising ~~assemblies~~from ~~totaling~~the ~~$4,077,013~~lease. ~~and~~Operating ~~$2,967,021, respectively,~~leases ~~and~~are ~~raw~~included ~~materials~~in ROU ~~(inventory components~~assets, ~~parts,~~current ~~and~~operating ~~packaging)~~lease ~~totaling $754~~liabilities,~~448~~ ~~$858,369,~~and ~~respectively.~~long-term ~~The~~operating ~~valuation~~lease ~~of inventory~~liabilities ~~includes fixed production overhead costs based~~ on ~~normal capacity of~~ the ~~assembly~~Balance ~~warehouse~~Sheets.

~~The~~Lease ~~Company~~ROU ~~periodically~~assets and ~~reviews~~lease ~~its~~liabilities ~~inventory~~are ~~for evidence~~initially recognized based on the present value of ~~slow-moving~~the orfuture ~~obsolete~~minimum ~~inventory~~lease ~~and~~payments ~~provides~~over ~~for~~the anlease ~~allowance~~term ~~when~~at commencement ~~considered~~date ~~necessary.~~calculated ~~The~~using the Company’s ~~determined~~incremental ~~that~~borrowing norate (“IBR”) applicable to the lease asset. ~~such~~As ~~reserve~~the ~~was~~implicit ~~necessary~~rates asfor ofthe ~~December~~Company's ~~31,~~operating ~~2024~~leases orare ~~December~~generally 31not determinable, ~~2023.~~the ~~The~~ Company ~~prepays~~uses ~~for~~an ~~inventory~~IBR ~~purchases~~based ~~from~~on ~~foreign~~the ~~suppliers.~~information ~~Prepaid~~available ~~inventory~~at ~~totaled~~the ~~$1,612,686~~respective ~~and~~lease ~~$163,948~~commencement atdates ~~December~~to ~~31,~~determine ~~2024~~the ~~and~~present ~~December~~value ~~31,~~of ~~2023,~~future ~~respectively,~~payments. ~~and~~IBR ~~included~~represents ~~inventory~~the ininterest rate ~~transit~~that ~~where~~the ~~title~~Company ~~had~~would ~~passed~~expect to incur at lease commencement to borrow an amount equal to the ~~Company~~lease ~~but~~payments ~~had~~on ~~not~~a ~~yet~~collateralized ~~been~~basis ~~physically~~with ~~received~~similar terms and payments, in an economic environment where the leased asset is located.

~~Vendor and Foreign Concentrations of Inventory Suppliers~~F-10

~~During~~ROU ~~the~~assets ~~years~~also ~~ended~~include any ~~December~~lease ~~31,~~payments ~~2024~~made ~~and~~at ~~2023, approximately~~or ~~82%~~before ~~and~~lease ~~70%,~~commencement ~~respectively,~~and ofexclude ~~inventory~~any ~~purchases~~lease ~~were~~incentives ~~made~~received. ~~from~~The ~~foreign~~Company’s ~~suppliers~~lease interms ~~Asia.~~may include ~~Any~~options ~~adverse~~to ~~change~~extend inor ~~either~~ terminate the ~~economic~~lease orwhen ~~political~~it ~~conditions~~is ~~abroad~~reasonably ~~could~~certain ~~negatively~~that ~~impact~~ the Company’s ~~supply~~will ~~chain.~~exercise ~~The~~that ~~inability~~option. toLeases ~~obtain product~~with toa ~~meet~~term ~~sales~~of ~~demand~~12 ~~could~~months ~~adversely~~or ~~affect~~less ~~results~~are ofnot ~~operations.~~recognized ~~However,~~on the ~~Company~~Balance ~~has~~Sheets. ~~secured~~The aCompany’s ~~secondary~~leases ~~source~~do ~~for~~not ~~lithium~~contain ~~iron phosphate~~any ~~cells~~residual ~~used~~value inguarantees. Lease ~~its~~expense ~~batteries~~for ~~from~~minimum alease ~~supplier~~payments inis ~~Europe,~~recognized ~~enabling~~on ~~the~~a ~~Company~~straight-line tobasis ~~source~~over ~~materials outside of Asia in~~ the ~~event it~~lease ~~becomes necessary to do so~~term.

The Company accounts for lease and non-lease components as a single lease component for all of its leases.

Property and Equipment

Property and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related assets as follows:

Schedule of estimated useful lives
Vehicles and transportation equipment		5 - 7 years
Manufacturing equipment		3 - 10 years
Office furniture and equipment		3 - 7 years
Warehouse equipment		3 - 10 years
QA equipment		3 - 10 years
Tooling and molds		5 - 10 years

Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.

Betterments, renewals, and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts, and the gain or loss on disposition is recognized in the Statements of Operations.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent

the Company’s obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on the Company’s Balance Sheets. The Company does not have any finance leases.

Lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the lease asset, unless the implicit rate is readily determinable. ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the Company’s Balance Sheet. The Company’s leases do not contain any residual value guarantees. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

F-10

The Company accounts for lease and non-lease components as a single lease component for all its leases.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment. When events or circumstances indicate the carrying value of a long-lived asset may be impaired, the Company estimates the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to assess whether or not a potential impairment exists. If the carrying value exceeds the estimate of future undiscounted cash flows, the impairment is calculated as the excess of the carrying value of the asset over the estimate of its fair value. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved. No long-lived asset impairment was recognized during the years ended December 31, ~~2024~~ 2025 or ~~2023~~2024.

Product Warranties

The Company sells the majority of its products to customers along with conditional repair or replacement warranties. The Company’s branded DCproducts carry ~~mobile~~warranties ~~chargers~~ranging ~~are~~from ~~warrantied~~one ~~for~~year ~~two~~ to up to twelve years from the date of sale, ~~and~~depending ~~its~~on ~~branded~~the ~~VPR~~specific ~~4EVER Classic and Platinum batteries are warrantied at gradually lesser levels over a twelve-year period from date of sale~~product. The Company determines its estimated liability for warranty claims based on the Company’s experience ofwith respect to the ~~amount~~number and value of warranty claims actually made. ~~Management estimates no liability as of December 31~~Historically, ~~2024 and 2023 because, historically,~~ there have been very few claims and the costs ~~for~~associated ~~repairs or~~with ~~replacement~~those ~~parts~~claims have been nominal. ~~It is possible that the Company’s~~Accordingly, ~~estimate~~management ofestimated ~~liability~~no ~~for~~liabilities ~~product~~associated ~~liability~~with warranty claims ~~will~~as ~~change~~of inDecember ~~the~~31. ~~near~~2025 ~~term~~and 2024.

Liability for Refunds

The Company does not have a formal return policy but does accept returns under its warranty policies. Returns have historically been minimal. ~~No refund liability was recognized in the year ended December 31, 2023 or December 31, 2024.~~ Revenue is recorded net of ~~this amount~~returns. Any returns of discontinued product are not added back to inventory and therefore related costs are nominal and not recorded as an asset. No refund liability was recognized in the years ended December 31, 2025 and 2024.

Revenue Recognition

The Company’s revenue is generated from the sale of products consisting primarily of batteries and accessories. The Company recognizes revenue when control of goods or services is transferred to its customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. To determine revenue recognition, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the performance obligation(s) are satisfied. Revenue is recognized upon shipment or delivery to the customer, as that is when the customer obtains control of the promised goods and the Company’s performance obligation is considered satisfied. As such, accounts receivable is recorded at the time of shipment or will call, when the Company’s right to the consideration becomes unconditional and the Company determines there are no uncertainties regarding payment terms or transfer of control.

Concentration of Major Customers

A customer is considered a major customer when net revenue attributable to the customer exceeds 10% of total revenue for the period or outstanding receivable balances exceed 10% of total receivables.

During the year ended December 31, 2024, sales to one customer totaled $726,292, or approximately 14% of our total sales and had 6% of our outstanding accounts receivable at December 31, 2024. Four other customers had accounts receivable balances totaling $339,111, representing 60% of total accounts receivable as of December 31, 2024. Sales to each of our other customers did not exceed 10% during this period. During the year ended December 31, 2023, sales to two customers totaled $1,237,232, or approximately 21% of our total sales, and these customers did not have any outstanding accounts receivable at December 31, 2023. While these customers did not have accounts receivable balances as of December 31, 2023, four other customers had accounts receivable balances totaling $142,255, representing 91% of total accounts receivable as of December 31, 2023. Sales to each of our other customers did not exceed 10% during this period.

F-11

Shipping and Handling Costs

Shipping and handling fees billed to customers ~~are classified on the Statement of Operations as “Net sales” and~~ totaled $9949,~~201~~ 386 and $7099,~~712~~201 for ~~during~~ the years ended December 31, ~~2024~~ 2025 and ~~2023~~2024, respectively, and are included in net sales on the Statement of Operations. Shipping and handling costs for shipping product to customers totaled $~~260~~357,~~946~~ 484 and $~~199~~260,~~288~~946 for ~~during~~ the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, and are ~~classified~~included in selling, general and administrative expense inon the ~~accompanying~~ Statements of Operations.

Advertising and Marketing Costs

The Company expenses advertising and marketing costs as incurred. Advertising and marketing expense totaled $~~926~~1,~~430~~ 001,730 and $~~929~~926,~~220~~ 430 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, and isare included in selling, general and administrative expense inon the ~~accompanying~~ Statements of Operations.

Research and Development

Research and development activities primarily consist of product design and engineering, battery cell evaluation and testing, prototype development, performance validation, certification and compliance testing, and enhancements to existing battery systems and related technologies. Research and development costs are expensed as incurred. Research and development costs charged to expense amounted to $~~295~~558,~~292~~ 882 and $~~397~~295,~~662~~ 292 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, and are included in selling, general and administrative expenses inon the ~~accompanying~~ Statements of Operations.

Income Taxes

~~Effective~~The ~~November 1, 2021, the~~ Company ~~converted~~uses ~~from~~the anasset ~~LLC to a C corporation~~ and, asliability amethod ~~result,~~of ~~became~~accounting ~~subject~~for ~~to corporate federal and state~~ income taxes. ~~Deferred~~Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of exiting assets and liabilities and their respective tax basis. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. The CARES Act provides sweeping tax changes in response to the COVID-19 pandemic. Some of the more significant provisions are removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and JOBS Act. As of December 31, 2024 and December 31, 2023, the Company has not recorded any income tax provision/(benefit) resulting from the CARES Act, mainly due to the Company’s history of net operating losses.

On December 27, 2020, the United States enacted the Consolidated Appropriations Act of 2021 (the “CAA”). The CAA includes provisions extending certain CARES Act provisions and adds coronavirus relief, tax and health extenders. The Company will continue to evaluate the impact of the CAA and its impact on its financial statements in 2024 and beyond.

F-12

Fair Value of Financial Instruments

The Company accounts for its financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurement. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. These inputs include quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. ~~The~~Determining fair value ~~hierarchy~~requires ~~gives~~that ~~the lowest priority to Level 3 inputs. In determining fair value,~~ we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value. The fair value hierarchy gives the lowest priority to Level 3 inputs.

~~The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, short~~F-term revolving loans, stockholder promissory notes, and long-term debt. The fair value of cash and cash equivalents, accounts receivable, accounts payable, and short-term revolving loans approximates their respective carrying values because of the short-term nature of those instruments. The fair value of the stockholder promissory notes, convertible notes, and long-term debt approximates their respective carrying values because the interest rate approximates market rates available to the Company for similar obligations with the same maturities.12

The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. The fair value of cash and cash equivalents, accounts receivable, and accounts payable approximates their respective carrying values because of the short-term nature of those instruments. The fair value of long-term debt approximates their respective carrying values because the interest rate approximates market rates available to the Company for similar obligations with the same maturities.

Basic and Diluted Net Loss Per Share

~~The~~Basic ~~basic~~ net income or loss per share is calculated by dividing ~~the~~ net income or loss by the weighted average number of shares outstanding during the period without consideration of potentially dilutive securities. Diluted earnings or loss per share typically adjusts the basic earnings or loss per share for the potentially dilutive impact of securities (e.~~g., options and warrants).~~

We calculate both the basic and diluted net loss per share using the weighted average number of common shares outstanding during the periods presented. without Inconsideration ~~periods~~ of adilutive ~~net loss position, basic and diluted weighted average common shares are the same~~securities. ~~For~~The ~~the~~Company’s ~~diluted~~potentially ~~earnings~~dilutive ~~per share calculation~~securities, wewhich ~~adjust~~primarily ~~the weighted average number~~ of ~~common shares~~ outstanding ~~to include dilutive stock options,~~ warrants, options ~~unvested~~and restricted stock units ~~and~~(“RSUs”), ~~shares~~were ~~associated with~~excluded in the ~~conversion~~calculation of ~~any~~diluted ~~convertible~~net ~~notes~~loss orper ~~preferred~~share ~~stock,~~as ~~when~~the ~~applicable.~~result would Wehave ~~use~~been ~~the if~~anti-~~converted~~dilutive ~~method~~due ~~for~~to ~~calculating~~the ~~any~~Company's ~~potential dilutive~~net ~~effect~~loss ofposition ~~convertible~~in ~~notes~~each ~~and~~period ~~convertible~~presented. ~~preferred~~As ~~stock~~a onresult, ~~diluted~~the ~~net~~Company’s ~~loss~~basic and diluted earnings per share are equal for the respective periods.

The following shows the amounts used in computing net loss (basic and diluted) per share:

Schedule of net loss per share
	Years Ended December 31,
	2024			2023
	2025			2024
Net loss	$	(136,~~479~~235,~~475~~187	)	$	(713,~~456~~479,~~274~~475	)
Weighted average common shares outstanding – basic and diluted		~~641~~5,~~011~~511,875			68641,~~882~~011
Basic and diluted net loss per share	$	(211.0313	)	$	(~~108~~21.2503	)

As of December 31, 2025 ~~2024~~ and ~~2023~~2024, the Company ~~has~~ had outstanding warrants, and options exercisable for, and ~~restricted~~outstanding ~~stock units (“~~RSUs”) ~~convertible~~that ~~into~~could ~~5,392,395~~be ~~and~~settled 19for,~~167~~ ~~shares~~an aggregate of ~~common stock~~1,773,624 and ~~respectively. The following table sets forth the number of~~ 5,392,395 shares ~~excluded from the computation~~ of ~~diluted~~common ~~loss per share~~stock, ~~as their inclusion would have been anti-dilutive~~respectively.

Schedule of anti-dilutive share
	Years ended December 31,
	2024		2023
Warrants		6,889		8,045
Warrants – Series A		5,286,692		—
Warrants – Series B		87,384		—
Stock options		11,430		10,756
RSUs		—		366
		5,392,395		19,167

The following table sets forth the number of shares excluded from the computation of diluted loss per share for the respective periods, as their inclusion would have been anti-dilutive.

F-13

	Years Ended December 31,
	2025		2024
Warrants		6,639		6,889
Warrants – Series A		901,943		5,286,692
Warrants – Series B		2,132		87,384
Warrants – January 2025		449,193		—
Stock options		214,217		11,430
RSUs		55,000		—
Pre-funded warrants		144,498		—
		1,773,622		5,392,395

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation—Stock Compensation”, which requires compensation costs to be recognized at grant date fair value over the requisite service period of each of the awards. The Company recognizes forfeitures of awards as they occur.

~~The fair value of stock options is determined using the Black~~F-Scholes-Merton option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected dividend yield and expected life. Changes to assumptions could cause significant adjustments to the valuation.13

The fair value of options is determined using the Black-Scholes option-pricing model. In order to calculate the fair value of options, certain assumptions and estimates are made with respect to variables such as the expected life of options, volatility of the stock price, risk-free interest rates, future dividend yields, and estimated forfeitures at the initial grant date. Changes to these assumptions or estimates could cause result in significant changes to the valuations.

New Accounting Pronouncements

In ~~November~~December ~~2023~~2025, the FASB issued ASU ~~2023~~2025-0711, “~~Segment~~ Interim Reporting (Topic ~~280~~270): ~~Improvements~~Narrow-Scope ~~to Reportable Segment Disclosures~~Improvements.” This ASU was issued to ~~clarify~~update ~~reporting requirements for~~guidance ~~public~~on ~~entities~~disclosures that ~~are~~should ~~required~~be toprovided ~~report segment information~~ in ~~accordance~~interim ~~with~~reporting ~~Topic 280, Segment Reporting~~periods. The Company ~~will~~already ~~adopt this~~complies ~~standard~~with ~~effective~~the ~~January~~guidance 1,in ~~2024~~this ASU, ~~but~~so ~~does~~there will ~~not~~be ~~anticipate~~no an impact on ~~the~~its ~~Company’s~~ financial statements or disclosures ~~in this Report, as we currently have one reportable segment~~.

In March 2023, the FASB issued ASU 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” This ASU was issued to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits. ASU 2023-02 is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company will adopt this standard effective January 1, 2024, but does not anticipate an impact on the Company’s financial statements or disclosures.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,” which amends the guidance in Topic 820, Fair Value Measurement, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, the ASU introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years for public business entities. The Company will adopt this standard effective January 1, 2024, but does not anticipate an impact on the Company’s financial statements or disclosures.

In July 2023, the FASB issued ASU 2023-03, amending “Presentation of Financial Statements (Topic 205),” “Income Statement – Reporting Comprehensive Income (Topic 220),” “Distinguishing Liabilities from Equity (Topic 480),” “Equity (Topic 505),” and “Compensation – Stock Compensation (Topic 718).” The company adopted this standard effective December 15, 2023.

Accounting Guidance Issued but Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).” This ASU was issued to improve the disclosures about an entity’s expenses, and require certain types of expenses to be disclosed individually, and is effective for annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its financial ~~statement~~statements or disclosures.

F-14

In March 2024, the FASB issued ASU 2024-02, “Codification Improvements—Amendments to Remove References to the Concepts Statements,” to address suggestions received from stakeholders. The Company is currently evaluating the impact of this standard on its financial statements.

In March 2024, the FASB issued ASU 2024-01, “Compensation—Stock Compensation,” which adds an illustrative example to demonstrate how to apply the guidance in paragraph 718-10-15-3. The Company is currently evaluating the impact of this standard on its financial statements.

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which affects a variety of Topics in the Codification. The company is currently evaluating the impact of this standard on our financial statements.

3. Property and Equipment, Net

Property and equipment consist of the following:

Schedule of property and equipment
	Years Ended December 31,
	2024			2023
	2025			2024
Vehicles and transportation equipment	$	~~406~~299,~~013~~015		$	~~551~~406,~~906~~013
Manufacturing equipment		168,099			~~179~~168,~~274~~099
Office furniture and equipment		153,698			~~188~~153,~~131~~698
Warehouse equipment		72,964			8172,~~164~~964
Leasehold improvements		69,725			~~314~~69,~~819~~725
QA equipment		43,582			3343,~~032~~582
		914,081			1,348,326
		807,083			914,081
Less: accumulated depreciation		(~~430~~478,~~191~~861	)		(430,~~295~~191	)
Property and equipment, net	$	~~483~~328,~~890~~222		$	~~918~~483,~~031~~890

Depreciation expense was $~~173~~116,~~973~~645 and $~~205~~173,~~723~~973 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. There were disposals and sales of fixed assets during the years ended December 31, ~~2024~~2025 and ~~2023~~2024 resulting in ~~the~~ net cash received of $~~132~~4,~~611~~ 250 and $36132,~~748~~611, respectively., Asand athe ~~result~~recognition of ~~disposals~~losses ~~and sales~~ of ~~fixed~~$13,353 ~~assets~~and we$146,760, respectively. ~~recognized~~The ~~losses~~disposals ~~during~~in the year ended December 31, ~~2024~~2025 ~~and~~consisted ~~2023~~of the sale of ~~$146,760~~two ~~and~~small ~~$3,426,~~vehicles ~~respectively.~~and ~~The~~the ~~majority~~exchange of ~~the~~a vehicle for services rendered. The disposals in the year ~~ending~~ended December 31, 2024 ~~were~~primarily ~~for~~related to sales of equipment and leasehold improvements arising ~~when~~from ~~we terminated~~ the ~~lease~~termination of ~~our~~a ~~second warehouse in Redmond, Oregon in order to reduce ongoing monthly expenses~~lease.

F-14

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

Schedule of accrued expenses and other current liabilities
	Years Ended December 31,
	2024		2023
	2025		2024
Accrued salaries and payroll liabilities	$	~~145~~146,~~686~~407	$	~~225~~145,~~685~~686
Rebate liability		—		31,411
Commissions		49,505		30,913
Commissions		30,913		12,608
Deferred income and deposit (sublease)		17,754		4,549
Deferred income and deposit (sublease)		4,549		4,445
Franchise tax		150		150
Accrued interest		~~760~~92		~~2,839~~760
Franchise tax		150		1,840
Other		7,955		5,406
Other		5,406		13,687
Accrued expenses and other current liabilities	$	221,863	$	187,464
Accrued expenses and other current liabilities	$	187,464	$	292,515

F-15

5. Long-Term Debt

Long-term debt consisted of the following at December 31, ~~2024~~2025 and ~~2023~~2024:

Schedule of long term debt payment
	December 31, 2025			December 31, 2024
	December 31, 2024			December 31, 2023
Note payable – bank. Payable in monthly installments of $332, including interest at 5.8% per annum, secured by equipment. This note was repaid in full in August 2025.		—			2,657
Note payable – bank. Payable in monthly installments of $332, including interest at 5.8% per annum, due August 2025, secured by equipment and personally guaranteed by a co-founder.		2,657			6,317
Note payable – credit union. Payable in monthly installments of $508, including interest at 5.45% per annum, , secured by a vehicle. This note was repaid in full in March 2024.		—			—
Note payable – credit union. Payable in monthly installments of $508, including interest at 5.45% per annum, due July 2026, secured by a vehicle and personally guaranteed by a co-founder. This note was paid in full in March 2024.		—			14,196
Note payable – SBA: The Economic Injury Disaster Loan is payable in monthly installments of $731, including interest at 3.75% per annum, matures in May 2050, and is unsecured.		138,853			143,144
Note payable – SBA. Economic Injury Disaster Loan payable in monthly installments of $731, including interest at 3.75% per annum, due May 2050, and personally guaranteed by a co-founder.		143,144			146,926
Notes payable – The Company has acquired six notes payable to GM Financial for vehicles. In April 2022, the Company secured a commercial line up to $300,000 to be used to finance vehicle purchases. The original agreement expired in April 2023 but was renewed for a commercial line up to $350,000 with prevailing GM Financial existing terms each year since. The current agreement expires in April 2026. One note was paid off when the corresponding vehicle was sold in May 2023, two notes were paid off when the corresponding vehicles were sold in February 2024, and three notes remain outstanding as of December 31, 2025. The notes are currently payable in aggregate monthly installments of $2,560, including interest at rates ranging from 6.14% to 7.29% per annum, mature at various dates from October 2027 to May of 2028, and are secured by the related vehicles.		58,392			84,369
Notes payable – The Company has acquired six notes payable to GM Financial for vehicles. In April 2022, the Company secured a commercial line up to $300,000 to be used to finance vehicle purchases. The agreement expired in April 2023 but was renewed for a commercial line up to $350,000 and prevailing GM Financial existing term notes will remain. The new agreement expires in April 2024. One note was paid off when the corresponding vehicle was sold in May 2023, so there are five notes remaining at December 31, 2024. The notes are currently payable in aggregate monthly installments of $4,084, including interest at rates ranging from 5.89% to 7.29% per annum, mature at various dates from October 2027 to May of 2028, and are secured by the related vehicles. Two of the notes are personally guaranteed by a co-founder. Two of the notes were paid in full in February 2024; these notes had a combined principal balance of $72,115 as of December 31, 2024.		84,369			181,842
Total	$	197,245		$	230,170
Total	$	230,170		$	349,281
Less current portion		(31,058	)		(31,758	)
Less current portion		(31,758	)		(50,839	)
Long-term debt, net of unamortized debt discount and current portion	$	166,187		$	198,412
Long-term debt, net of unamortized debt discount and current portion	$	198,412		$	298,442

F-15

Future maturities of long-term debt are as follows:

Schedule of maturities of long-term debt
Years ending December 31,
2025	$	31,758
2026	$	31,058
2026		31,058
2027		30,381
2027		30,590
2028		8,099
2028		8,212
2029		4,002
Thereafter		124,550
2030		4,155
Total	$	230,170
Thereafter		119,550
Total	$	197,245

6. Stockholder Promissory Notes

AsThe ofCompany ~~December 31, 2024 and December 31, 2023, the~~previously ~~Company~~issued ~~had~~unsecured anpromissory ~~outstanding~~notes ~~principal balance of $0 and $762,500 due~~ to certain stockholders ~~under~~(the ~~unsecured~~“Stockholder ~~Promissory~~ Notes ~~Agreements (“Notes~~”). ~~The~~ ~~Notes~~As ~~require~~of ~~monthly interest-only payments at 10% per annum. The Notes would have matured in September 2024 and~~ December ~~2024 as follows: September 2024 - $500~~31,~~000~~ ~~(this~~2025 ~~Note would have matured in August 2023, but in June 2023, an agreement was signed extending the maturity date to August 2024,~~ and ~~in June~~ 2024, ~~an agreement was signed further extending~~ the Company ~~maturity~~had ~~date to September 2024); and December~~no ~~2024~~outstanding -principal ~~$200,000.~~balance Adue ~~note~~pursuant ~~for~~to ~~$62,500~~the ~~that matured in January 2024 was paid in January 2024, and~~ Stockholder Notes ~~for $500~~,~~000~~ ~~that~~which ~~matured in September 2024 and $200,000 that matured in December 2024~~ were ~~both~~fully ~~paid~~repaid in August 2024. ~~As of December 31, 2024, there were no Notes outstanding.~~

~~F-16~~Interest paid to stockholders under the Stockholder Notes totaled $0 and $42,862 during the years ended December 31, 2025 and 2024, respectively. There was no accrued interest under the Stockholder Notes as of December 31, 2025 or 2024.

Interest paid to the stockholders under the Notes totaled $42,862 and $82,508 during the years ended December 31, 2024 and 2023, respectively. There was no accrued interest as of December 31, 2024 or 2023 related to these Notes.

7. Equity and Debt Financings

~~August~~October ~~2024~~2025 ~~Public Offering~~ Private Placement

On ~~August~~October 816, ~~2024~~2025, the Company ~~sold in~~entered ~~the~~into ~~August~~a ~~2024~~securities ~~Public~~purchase ~~Offering,~~agreement (ithe “Purchase Agreement”) ~~33,402,000~~with ~~Common~~two ~~Units,~~institutional ~~(pre-Reverse~~investors ~~Stock~~pursuant to ~~Split),~~which ~~each~~the ~~consisting~~Company ofagreed ~~one~~to ~~share~~sell ofin ~~common~~a ~~stock, two~~private ~~Series~~placement A(the ~~Warrants~~“October ~~and~~2025 ~~one~~Private ~~Series~~Placement”) Ban ~~Warrant,~~aggregate ~~and~~of (iii) 16613,~~598,000~~077 shares ~~Pre-Funded~~of ~~Units~~common ~~(pre-Reverse~~stock, ~~Stock~~and ~~Split~~(ii), ~~each~~a ~~consisting~~pre-funded ofwarrant ~~one~~(the “October 2025 Pre-Funded Warrant,”) ~~two~~to ~~Series~~purchase Aup ~~Warrants~~to 144,498 shares ~~and~~of ~~one~~common ~~Series~~stock. BThe ~~Warrant,~~offering ~~through~~price per share was $1.65 and the ~~Underwriter~~offering price per pre-funded warrant share was $1.649.

InThe ~~addition, the~~ Company ~~granted~~received ~~the~~net ~~Underwriter~~proceeds aof ~~45-day~~approximately ~~option~~$1.1 tomillion ~~purchase~~from ~~additional~~the ~~shares~~October of2025 ~~common~~Private ~~stock~~Placement ~~and/or~~after ~~Pre-Funded~~deducting ~~Warrants~~offering ~~and/or~~expenses ~~Series~~payable Aby ~~Warrants~~the ~~and/or~~Company. ~~Series~~The BCompany ~~Warrants,~~used ~~representing up to 15% of~~ the ~~number~~net ofproceeds ~~the~~from ~~respective securities sold in~~ the ~~August~~offering ~~2024~~to ~~Public~~pay ~~Offering,~~severance ~~solely~~obligations to ~~cover~~ ~~over-allotments,~~certain ifexecutive ~~any.~~officers ~~The~~that ~~Underwriter~~transitioned ~~partially~~concurrent with ~~exercised~~the ~~its~~completion ~~over-allotment~~of ~~option~~the ~~with~~October ~~respect~~2025 toPrivate 15Placement,~~000,000~~ ~~Series A Warrants~~ and ~~7,500,000~~for ~~Series~~working Bcapital ~~Warrants~~and ~~(pre-Reverse~~other ~~Stock~~general ~~Split)~~corporate purposes.

The ~~Common~~October ~~Units~~2025 Pre-Funded ~~were~~Warrant ~~sold~~is atexercisable immediately upon issuance for cash or on a cashless basis at the discretion of the holder. The exercise price of the October 2025 Pre-Funded Warrant is $0.20001 per ~~unit~~share. The number of pre-funded warrant shares that may be issuable is subject to adjustment for stock splits, recapitalizations, and reorganizations. The holder of the October 2025 Pre-Funded ~~Warrants~~Warrant ~~were~~does ~~sold~~not athave any avoting ~~price~~rights, ofbut ~~$0.199~~does ~~per~~have ~~unit~~the ~~(pre-Reverse~~right ~~Stock~~to ~~Split)~~participate in any dividends or distributions made by the Company.

The ~~Pre-Funded~~offer ~~Warrants~~and ~~were immediately~~sale ~~exercisable~~of atthe ansecurities ~~exercise~~in ~~price~~the ofOctober ~~$0.001~~2025 ~~per~~Private ~~share~~Placement ~~(Pre-Reverse~~was ~~Stock~~made ~~Split)~~pursuant ~~and~~to ~~could~~the beexemption ~~exercised~~from atthe ~~any~~registration ~~time~~requirements ~~until~~of ~~all Pre-Funded~~the ~~Warrants~~Securities ~~are~~Act ~~exercised~~of in1933, ~~full.~~as Asamended of(the ~~December~~“Securities 31Act”), ~~2024,~~provided ~~all~~by ~~Pre-Funded~~Section ~~Warrants~~4(a)(2) ~~have~~of ~~been~~the ~~exercised~~Securities Act and Rule 506 promulgated thereunder.

~~Each~~January ~~Series~~2025 A Warrant is exercisable at any time or times beginning on September 30, 2024, which was the first trading day following the Company’s notice to the Series A Warrant holders of stockholder approval received at the Company’s annual meeting of stockholders held on September 27, 2024 (the “2024 Annual Meeting”), and will expire five years from such date. Each Series A Warrant was initially exercisable at an exercise price of $24.00 per share of common stock (post-Reverse Stock Split). The exercise price of the Series A Warrants was subject to reduction on the 11th trading day after the stockholder approval to the greater of the lowest daily volume weighted average price (“VWAP”) during the ten trading day period following the stockholder approval and the floor price of $5.206 (representing 20% of the lower of our common stock’s closing price on The Nasdaq Capital Market on the date that we priced the August 2024 Public ~~Offering (post-Reverse~~ Stock Split) or our common stock’s average closing price on The Nasdaq Capital Market for the five trading days ending on such date (such lower price, without giving effect to such 20% reduction, the “Nasdaq Minimum Price”), and the number of shares issuable upon exercise would be proportionately adjusted such that the aggregate exercise price would remain unchanged. As of September 30, 2024, there would have been 5,301,592 shares of common stock (post-Reverse Stock Split and assuming the Adjustment had occurred on September 30, 2024) issuable upon exercise of the Series A Warrants. Subsequent to September 30, 2024, the exercise price under the Series A Warrants was reduced to the floor price of $5.206 (representing 20% of the Nasdaq Minimum Price, post-Reverse Stock Split), beginning on October 14, 2024, the 11th trading day following stockholder approval. As of December 31, 2024, 14,900 shares of common stock have been issued upon exercise of Series A Warrants and 5,286,692 shares of Common stock remain issuable upon exercise of Series A Warrants.Offering

~~Each~~In ~~Series~~January ~~B Warrant was exercisable~~2025, ~~immediately~~the ~~upon~~Company ~~issuance~~sold atin ana ~~exercise~~public ~~price~~offering of(the ~~$0.10~~“January ~~per~~2025 ~~share~~Public ~~(post-Reverse~~Offering”) ~~Stock Split~~(i). ~~The number of~~ 474,193 shares of common stock, ~~issuable under~~(ii) ~~the~~pre-funded ~~Series~~warrants ~~B Warrants were subject to adjustment using a reset price based on~~ (the ~~weighted average price of common stock over a~~“January ~~rolling~~2025 ~~five~~Pre-~~trading-day~~Funded ~~period between the issuance date of the Class B~~ Warrants”) ~~and the close of trading on the tenth trading day following stockholder approval, subject~~ to ~~certain~~purchase ~~floor prices. As of September 30~~574, ~~2024, 342,588~~ 193 shares of ~~Common~~common stock, ~~(post-Reverse~~which ~~Stock~~were ~~Split) had~~exercised ~~been~~immediately ~~issued~~ upon closing, ~~exercise~~and of(iii) ~~Series~~warrants Bto ~~Warrants~~purchase ~~and there were~~ 1,~~032~~048,~~198~~ 386 shares of ~~Common~~common stock ~~(post-Reverse~~at ~~Stock~~an ~~Split) issuable upon~~ exercise ~~of Series B Warrants based on the reset~~ price of $52.4536 ~~(representing~~per ~~the lowest arithmetic average~~share of (the ~~daily~~“January ~~VWAP~~2025 ~~during~~Warrants”). ~~the~~The 5offering ~~trading~~price ~~day~~per ~~period~~share ~~from~~was ~~September 12, 2024 through September 18, 2024~~$2.48 ~~Effective October 8, 2024, after market close, a reverse stock split occurred~~ and asthe ofoffering ~~November~~price ~~12,~~per ~~2024,~~pre-funded ~~87,384~~warrant ~~shares of common stock remain issuable upon exercise~~share ~~of Series B Warrants using the reset price, which~~ was ~~reduced to the floor price of~~ $52.~~206 (representing 20% of the Nasdaq Minimum Price (post-Reverse Stock Split and post-Adjustment)~~479.

The Company received net proceeds of approximately $1.8 million from the January 2025 Public Offering after deducting offering expenses payable by the Company. The Company used the net proceeds from the offering to pay certain obligations under the Series A Warrants (as defined below), and for working capital and other general corporate purposes.

F-16

The January 2025 Pre-Funded Warrants are exercisable immediately upon issuance for cash or on a cashless basis at the discretion of the holder. The exercise price of the January 2025 Pre-Funded Warrants is $0.001 per share. The number of pre-funded warrant shares that may be issuable is subject to adjustment for stock splits, recapitalizations, and reorganizations. The holders of the January 2025 Pre-Funded Warrants do not have any voting rights, but do have the right to participate in any dividends or distributions made by the Company.

The fair value of the January 2025 Warrants was determined at the date of issuance using the Black-Scholes option-pricing model based on the following estimates and assumptions: a per share price of common stock on date of grant of $2.22; expected dividend yield of 0%; expected volatility of 158.64%; risk-free interest rate of 4.41%; and expected life of five years. The warrants were valued at $2.064 per share, with a total value of $2,163,869.

The offer and sale of the securities in the January 2025 Public Offering was made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-272956), which the Company filed with the SEC on June 27, 2023 and was declared effective on July 10, 2023 (the “Shelf Registration Statement”). The offer and sale of the January 2025 Warrants was made pursuant to a registration statement on Form S-1 (File No. 333-284354), which the Company filed with the SEC on January 17, 2025 and was declared effective on February 11, 2025.

On August 14, 2025, the Company entered into inducement offer letter agreements with certain holders of the January 2025 Warrants, which reduced the exercise price of the January 2025 Warrants from $2.36 per share to $1.31 per share in exchange for the prompt exercise by such holders of the warrants for cash (the “Warrant Inducement”). The difference between the fair value of the warrants immediately prior to and following modification was calculated using the Black-Scholes option-pricing model and treated as a transaction cost, and resulted in $97,746 being netted against the proceeds received from the January 2025 Warrants. As a result of the Warrant Inducement, January 2025 Warrants covering an aggregate of 599,193 shares of common stock were exercised, resulting in net proceeds to the Company of approximately $0.8 million. On August 22, 2025, the Company’s board of directors took action to permanently reduce the exercise price of the January 2025 Warrants from $2.36 per share to $1.31 per share (the “Exercise Price Reduction” and, together with the Warrant Inducement, the “Warrant Adjustments”). As of December 31, 2025, January 2025 Warrants covering an aggregate of 449,193 shares of common stock remained outstanding.

Reverse Stock Split Cash True-Up Payment

On October 8, 2024, the Company effected a 1-for-100 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding shares of common stock, which was approved by the Company’s board of directors on September 27, 2024, following stockholder approval at the Company’s annual meeting of stockholders held on September 27, 2024 (the “2024 Annual Meeting”).

As a result of the lowest daily volume weighted average price (“VWAP”) of the common stock during the five trading days before and after the Reverse Stock Split being below the minimum threshold set forth in the Series A Warrants, a Reverse Stock Split cash true-up payment provision in the Series A Warrants was triggered (the “Cash True-up Payment”). The Cash True-Up Payment was capped at $5.0 million in the aggregate, but the payment was initially suspended in accordance with the terms of the Series A Warrants. See the section titled “—August 2024 Public Offering” for additional information.

During the year ended December 31, 2024, $14,052 of the Cash True-up Payment was relieved in connection with the exercise of certain Series A Warrants, leaving a remaining liability of $4,985,948 as of December 31, 2024.

The Company used $500,000 of the net proceeds from the January 2025 Public Offering to satisfy a portion of the Cash True-up Payment, leaving a remaining liability of $4,485,948.

On August 14, 2025, in connection with the Warrant Inducement, the Company entered into inducement offer letter agreements with certain holders of the Series A Warrants, which reduced the exercise price of the Series A Warrants from $5.206 per share to $1.31 per share in exchange for the prompt exercise by such holders of the warrants for cash. The Warrant Inducement had the effect of eliminating the Cash True-up Payment obligation pursuant to the terms of the Series A Warrants. As a result, the Cash True-up Payment liability of $4,485,948 was no longer payable, and this amount was recorded as a credit to Other income / (expense) on the Statement of Operations. As of December 31, 2025, the Cash True-up Payment liability balance was $0.

F-17

Pursuant to an underwriting agreement by and between the Company and the Underwriter, the Company paid the Underwriter a total cash underwriting discount of $700,000, equal to 7% of gross proceeds received in the August 2024 Public Offering, reimbursement for Underwriter expenses of $100,000, equal to 1% of gross proceeds received, and reimbursement for road show, diligence, legal fees and disbursements of $100,000, equal to 1% of gross proceeds received, as well as $5,000 for investor counsel fee, totaling $905,000 in cash fees deducted from cash proceeds.

On August 8, 2024, the Company issued and sold in a public offering (the “August 2024 Public Offering”) (i) 33,402,000 common units (pre-Reverse Stock Split), each consisting of one share of common stock, two Series A Warrants and one Series B Warrant (collectively, the “Common Units”), and (ii) 16,598,000 pre-funded units (pre-Reverse Stock Split), each consisting of one pre-funded warrant (the “August 2024 Pre-Funded Warrant”), two Series A Warrants, and one Series B Warrant (collectively, the “Pre-Funded Units”). The Common Units were sold at a price of $0.20 per unit and the Pre-Funded Units were sold at a price of $0.199 per unit (pre-Reverse Stock Split).

In addition, the Company granted the underwriter a 45-day option to purchase additional shares of common stock and/or August 2024 Pre-Funded Warrants and/or Series A Warrants and/or Series B Warrants, representing up to 15% of the number of the respective securities sold in the August 2024 Public Offering, solely to cover over-allotments, if any. The underwriter partially exercised its over-allotment option with respect to 15,000,000 Series A Warrants (pre-Reverse Stock Split) and 7,500,000 Series B Warrants (pre-Reverse Stock Split).

The Pre-Funded Warrants were immediately exercisable at an exercise price of $0.001 per share (pre-Reverse Stock Split). As of December 31, 2024, all Pre-Funded Warrants had been exercised.

The Company received net proceeds of approximately $8.7 million from the August 2024 Public Offering after deducting offering expenses payable by the Company. The Company used the net proceeds from the offering to satisfy its obligations pursuant to the 3i Note (as defined below), to satisfy its obligations under the Termination Agreement (as defined below), and for working capital and other general corporate purposes.

Each Series A Warrant became exercisable on September 30, 2024, and will expire five years from such date. Each Series A Warrant was initially exercisable at an exercise price of $24.00 per share of common stock (post-Reverse Stock Split). The exercise price of the Series A Warrants was subsequently reduced to $5.206 (post-Reverse Stock Split) consistent with the terms of the Series A Warrants.

On August 14, 2025, in connection with the Warrant Inducement, the exercise price of the Series A Warrants was further reduced to $1.31 per share. The difference between the fair value of the warrants immediately prior to and following modification was calculated using the Black-Scholes option-pricing model and treated as a transaction cost, and resulted in $1,423,166 being netted against the proceeds received from the Series A Warrants. As a result of the Warrant Inducement, an aggregate of 95,112,212 Series A Warrants were exercised, resulting in the issuance of an aggregate of 4,384,749 shares of common stock, resulting in net proceeds to the Company of $4,918,695.

On August 22, 2025, in connection with the Exercise Price Reduction, the exercise price of all of the outstanding Series A Warrants was reduced from $5.206 per share to $1.31 per share. As of December 31, 2025, Series A Warrants to purchase an aggregate of 901,943 shares of common stock remain outstanding.

Each Series B Warrant was exercisable immediately upon issuance at an exercise price of $0.10 per share (post-Reverse Stock Split). In July 2025, 85,252 shares of common stock were issued upon exercise of Series B Warrants, resulting in net proceeds to the Company of $8,525. As of December 31, 2025, Series B Warrants to purchase an aggregate of 2,132 shares of common stock remain outstanding.

The offer and sale of securities in the August 2024 Public Offering was made pursuant to an effective shelf registration statement on Form S-1 (File No. 333-280996), which the Company initially filed with the SEC on July 25, 2024 and was declared effective on August 6, 2025.

Convertible Note Financing

On December 27, 2023, the Company entered into a securities purchase agreement with 3i, LP (“3i”), pursuant to which the Company ~~sold~~issued and ~~3i purchased~~sold: (i) a senior unsecured convertible note ~~issued~~ in the aggregate principal amount of $2,750,000, with ana 10.0% original issue discount and an interest rate of 9.0% per annum (the “3i Note”), (ii) up to $247,500 in newly issued shares of ~~Common~~common stock ~~(the “Interest Shares”)~~, which ~~may be~~were payable, subject to the fulfillment of certain conditions set forth in the 3i Note, to satisfy interest payments under the 3i Note (the “Interest Shares”), ~~and~~ and (iii) 635 shares of ~~Common~~common stock issued to 3i as consideration for its commitment to purchase the 3i Note (collectively, the “Convertible Note Financing”). The gross proceeds to the Company from the Convertible Note Financing were $2.5 million prior to the payment of legal fees and transaction expenses. The offering of securities in the Convertible Note Financing was made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-272956), which the Company filed with the SEC on June 27, 2023 and was declared effective on July 10, 2023.

On August 8, 2024, in connection with the closing of the August 2024 Public Offering, the Company repaid the 3i Note, and the Company’s obligations under the 3i Note were fully satisfied and discharged. Prior to the closing of the August 2024 Public Offering, the Company had issued 414 shares of common stock (post-Reverse Stock Split) for the payment of $90,839 in interest.

Equity Line of Credit

On December 27, 2023, the Company entered into a common stock purchase agreement with Tumim Stone Capital, LLC (“Tumim”), pursuant to which the Company has the right, but not the obligation, to sell to Tumim, and Tumim is obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price of newly issued Common stock and (b) the Exchange Cap (as defined in the purchase agreement) (the “Equity Line of Credit”). In connection with the Equity Line of Credit, the Company filed a Registration Statement on Form S-1 (File No. 333-276663) with the SEC on January 23, 2024, which was declared effective on February 9, 2024.

In connection with the August 2024 Public Offering, the Company and Tumim mutually agreed to terminate the Equity Line of Credit, effective immediately upon the closing of the August 2024 Public Offering. Prior to the closing of the August 2024 Public Offering, the Company had sold 4,336 shares of common stock (post-Reverse Stock Split) under the Equity Line of Credit for an aggregate amount of $828,491, of which $434,958 was used to repay a portion of the balance under the 3i Note, consisting of $380,042 to the loan principal, $34,204 to interest, and $20,712 as a redemption premium.

Reverse Stock Split True-Up Payment

Effective as of 5:00 p.m. Pacific Time on October 8, 2024 (the “Effective Date”), The Company effected a 1-for-100 reverse stock split of our common stock (the “Reverse Stock Split”), which was approved by the Board on September 27, 2024, following stockholder approval at our annual meeting of stockholders held on September 27, 2024.

F-18

~~During~~The ~~the~~Company received ~~year~~net ~~ended~~proceeds ~~December~~of ~~31,~~approximately ~~2024,~~ $~~14,052~~1.8 ofmillion ~~this~~from ~~liability was relieved in connection with~~ the ~~exercise~~Convertible ofNote ~~Series~~Financing Aafter ~~Warrants,~~deducting ~~leaving~~related aexpenses ~~remaining liability~~payable ofby ~~$4,985,948~~the ~~as of December 31, 2024~~Company. The WeCompany used ~~$500,000 of~~ the net proceeds ~~from~~for ~~the~~working ~~registered~~capital ~~direct offering~~ and ~~warrant private~~other ~~placement~~general ~~that~~corporate ~~closed on January 3, 2025 to satisfy a portion of certain amounts owed to the holders of the Series A Warrants pursuant to the terms thereof~~purposes.

The offer and sale of securities in the Convertible Note Financing was made pursuant to the Shelf Registration Statement.

On August 8, 2024, in connection with the closing of the August 2024 Public Offering, the Company repaid the 3i Note, and the Company’s obligations under the 3i Note were fully satisfied and discharged. Prior to the satisfaction of the amounts owed pursuant to the 3i Note, the Company issued 414 shares of common stock (post-Reverse Stock Split) for the payment of $90,839 in interest.

Equity Line of Credit

On December 27, 2023, the Company entered into a common stock purchase agreement with Tumim Stone Capital, LLC (“Tumim”), pursuant to which the Company had the right, but not the obligation, to sell to Tumim, and Tumim was obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price of newly issued shares of common stock and (b) the Exchange Cap (as defined in the common stock purchase agreement) (the “Equity Line of Credit”).

The offer and sale of shares to Tumim pursuant to the Equity Line of Credit was made pursuant to the exemption from the registration requirements of the Securities Act, provided by Section 4(a)(2) of the Securities Act and Rule 506 promulgated thereunder. The resale of the shares sold to Tumim was registered pursuant to a Registration Statement on Form S-1 (File No. 333-276663) filed with the SEC on January 23, 2024, which was declared effective on February 9, 2024.

In connection with the August 2024 Public Offering, the Company and Tumim mutually agreed to terminate the Equity Line of Credit. Prior to termination, the Company had sold 4,336 shares of common stock under the Equity Line of Credit for an aggregate amount of $828,491, of which $434,958 was used to repay a portion of the Company’s obligations under the 3i Note.

8. Commitments and Contingencies

Operating Leases

The Company leases its warehouses and office space under long-term lease arrangements. ~~None~~All of ~~its~~the Company’s leases ~~include~~are ~~characteristics~~accounted ~~specified~~for inas ~~ASC~~operating leases. ~~842,~~For ~~Leases,~~longer-term lease arrangements that ~~require~~are ~~classification as~~recognized ~~financing~~on ~~leases,~~the ~~and~~Balance ~~accordingly~~Sheets, ~~these~~the ~~leases~~ROU asset and lease liability are ~~accounted~~initially measured ~~for~~at asthe ~~operating~~commencement ~~leases~~date based upon the present values of the lease payments. The Company does not recognize a ~~right-of-use~~ ROU asset and lease liability for short term leases, which have terms of 12 months or less. ~~For~~See ~~longer-term~~“Note ~~lease arrangements that are recognized on the Company’s Balance Sheet~~2, ~~the~~Summary ~~right-~~of~~-use~~ ~~asset~~Significant ~~and~~Accounting ~~lease liability are initially measured at the commencement date based~~Policies—Leases” ~~upon~~for ~~the~~additional ~~present values of the lease payments due under the leases~~information.

~~The~~In ~~implicit~~May ~~interest rates of the Company’s lease arrangements are generally not readily determinable and as such~~2025, the Company ~~applies~~entered aninto ~~incremental~~a ~~borrowing rate~~long-term, ~~which~~non-cancelable isoperating ~~established based~~lease ~~upon~~agreement ~~the~~for ~~information~~warehouse ~~available~~space atnext ~~the~~door ~~lease commencement date,~~ to ~~determine~~ the ~~present~~existing ~~value~~office ofand ~~lease~~warehouse space ~~payments~~in ~~due~~Redmond, ~~under~~Oregon, ~~the~~resulting ~~arrangement. Under~~in ~~ASC 842,~~ the ~~incremental~~Company ~~borrowing~~recognizing ~~rate~~an ~~(“IBR”)~~additional ~~for~~ROU ~~leases~~asset ~~must~~and becorresponding ~~(1)~~lease aliability ~~rate~~ of ~~interest over a similar term~~$198, ~~and (2)~~216, ~~for~~representing anthe ~~amount~~present ~~that~~value isof ~~equal to~~ the lease payments. ~~The~~discounted ~~Company~~using ~~uses~~an ~~both~~IBR ~~the~~of ~~Federal Reserve Economic Data U~~13.S49%. ~~corporate debt effective~~ ~~yield~~The ~~and~~lease ~~the~~expires ~~U.S.~~in ~~Treasury~~April ~~rates~~2028 ~~adjusted~~and ~~for~~provides ~~credit spread as the primary data points~~ for ~~purposes~~one ofthree-year ~~determining~~option ~~the~~to ~~IBR~~renew.

In ~~the~~January ~~first~~and ~~quarter of~~ February 2022, the Company entered into two ~~new~~ long-term, non-cancelable operating lease agreements for office and warehouse space resulting in the Company recognizing an additional ROU asset and corresponding lease liability of $2,348,509, representing the present value of the lease payments discounted using an ~~effective~~IBR ~~interest rate~~ of 8.07% and 8.86%, ~~and corresponding ROU assets of $2,348,509~~ respectively. ~~The~~One ~~leases~~lease ~~expire~~was terminated in ~~December~~September ~~2026~~2024, and ~~December 2028,~~ the ~~latter of~~remaining ~~which~~lease ~~contains~~expires ~~one~~in ~~three-year~~December ~~option to renew~~2026.

In the first quarter of 2021, the Company entered into a long-term, non-cancelable operating lease agreement for office and warehouse space resulting in the Company recognizing an additional lease liability totaling of $1,268,089, representing the present value of the lease payments discounted using an effective interest rate of 7.47% and a corresponding ROU asset of $1,268,089. The lease expires in January 2028 and contains one three-year option to renew.

The Company had another lease that expired in January 2023 and was terminated at that time. The relating right of use asset and lease liability were written off at that time. The company has one further lease that expires in February 2025. The leases generally provide for annual increases based on a fixed amount and generally require the Company to pay real estate taxes, insurance, and repairs.

On September 19, 2024, the Company signed a Termination of Commercial Lease Agreement regarding the lease previously contracted to end in December 2028. The cancelation was effective September 30, 2024. The corresponding ROU asset and lease liability were therefore removed from the Company’s balance sheet effective September 30, 2024.

The following is a summary of total lease costs for the years ending December 31, 2024 and 2023:

Schedule of lease cost
	Years Ended December 31,
	2024			2023
Operating lease cost	$	610,549		$	749,975
Short-term lease costs		1,149			150
Variable lease costs		—			—
Sublease income		(42,804	)		(49,916	)
Total lease costs	$	568,894		$	700,209

F-19

~~The~~In ~~weighted-average~~January ~~remaining~~2021, the ~~lease~~Company ~~term~~entered ~~was~~into ~~2.91 and~~a ~~4.54~~long-term, ~~years~~non-cancelable asoperating oflease ~~December~~agreement ~~31,~~for ~~2024~~office and ~~2023,~~warehouse ~~respectively.~~space ~~The~~resulting ~~weighted~~in ~~average~~the ~~discount~~Company recognizing ~~rate~~an ~~was~~additional ~~7.60%~~ROU asset and ~~8.47%~~lease asliability of ~~December 31~~$1,268,089, ~~2024~~representing ~~and~~the ~~2023,~~present ~~respectively.~~value ~~Operating~~of ~~cash~~the ~~flows~~lease ~~from~~payments ~~the~~discounted ~~operating~~using ~~leases~~an ~~totaled~~IBR ~~$455,690~~of ~~and~~7.47%. The ~~$469,923~~lease ~~for~~expires ~~the~~in ~~years~~January ~~ended~~2028 ~~December 31,~~and ~~2024~~contains ~~and~~one ~~2023,~~three-year ~~respectively~~option to renew.

The ~~total~~Company ~~lease~~had ~~liability~~three additional asleases ofrelating ~~December~~to ~~31,~~office ~~2024~~ and warehouse space that were terminated in January 2023, ~~was~~September ~~$798~~2024,~~917~~ and $2February 2025,~~764,089,~~ respectively. The related ROU assets and lease liabilities were removed from the Balance Sheets at the time of termination.

The ~~following~~Company’s operating isleases agenerally ~~maturity~~provide ~~analysis~~for offixed ~~the~~ annual ~~undiscounted~~ ~~cash~~increases ~~flows~~and ofrequire the ~~operating~~Company ~~lease~~to ~~liabilities~~pay asreal ofestate ~~December 31~~taxes, ~~2024~~insurance, ~~for~~and ~~years ending December 31:~~repairs.

Schedule of future minimum lease payment
	Total
2025	$	307,536
2026		307,632
2027		256,878
2028		21,458
2029		—
Thereafter		—
Total future minimum lease payments		893,504
Less imputed interest		(94,587
Total	$	798,917
Current lease liability	$	256,153
Noncurrent lease liability		542,764
Total	$	798,917

The following is a summary of total lease costs for the years ending December 31, 2025 and 2024:


	Years Ended December 31,
	2025			2024
Operating lease cost	$	359,337		$	610,549
Short-term lease costs		3,652			1,149
Sublease income		(7,169	)		(42,804	)
Total lease costs	$	355,820		$	568,894

The weighted-average remaining lease term was 2.06 and 2.91 years as of December 31, 2025 and 2024, respectively. The weighted-average IBR was 8.99% and 7.60% as of December 31, 2025 and 2024, respectively. Operating cash flows from the operating leases totaled $287,409 and $455,690 for the years ended December 31, 2025 and 2024, respectively.

The total lease liability as of December 31, 2025 and 2024 was $709,724 and $798,917, respectively.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of December 31, 2025, for years ending December 31:


	Total
2026	$	387,742
2027		339,392
2028		49,233
2029		—
Thereafter		—
Total future minimum lease payments		776,367
Less imputed interest		(66,643	)
Total	$	709,724

Current lease liability	$	337,246
Noncurrent lease liability		372,478
Total	$	709,724

Subleases

As of December 31, 2024, the Company ~~subleases~~subleased office and warehouse space under one of its ~~existing~~ operating leases with similar terms as the Company’s lease agreements. ~~Two~~The ~~additional~~Company’s lease and corresponding sublease for that property expired in February 2025 and were not renewed. Two ~~leases~~additional subleases ended in February, 2023. Because the Company iswas not relieved of its primary obligations under the original lease, the Company ~~accounts~~ accounted for the subleases as a lessor. Sublease rental income iswas recorded based on the contractual rental payments, which were ~~are~~ not substantially different from recognition on a straight-line basis over the lease term. ~~and~~Sublease rental income totaled $427,~~804~~ 169 and $4942,~~916~~ 804 during the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. As of December 31, ~~2024~~2025 and ~~2023~~2024, deferred sublease income and a sublease deposit totaled $~~4,549~~ 0 and $4,~~445~~549, respectively, and is included in accrued expenses and other current liabilities on the ~~accompanying~~ Balance Sheets.

The ~~total~~Company ~~future~~has ~~minimum sublease payments are $7,169,~~no ~~all~~subleases ~~due~~as inof ~~the year ending~~ December 31, 2025.

Litigation

The Company may be involved from time to time in litigation or claims arising in the ordinary course of its business. While the ultimate liability, if any, arising from these claims cannot be determined with certainty, the Company believes that the resolution of any such matters will not likely have a material adverse effect on the Company’s financial statements.

On November 22, 2022, the Company received notice of a complaint (the “Complaint”) filed against it in Oregon state court by Ravi Sinha. The Complaint alleged, inter alia, that Mr. Sinha was entitled to 282,284 shares of the Company's common stock, or in the alternative, $300,000 plus interest in connection with services he previously rendered the Company as its chief executive officer. On March 21, 2023, the Company entered into a settlement agreement with Mr. Sinha and the matter has been resolved with $30,000 cash and the issuance of 52,000 shares of common stock at the closing price of $4.84 per share on March 31, 2023, for a total settlement value of $281,680. (see Note 11, Stockholders’ Equity).

F-20

On May 2, 2024, the Company entered into a Settlement and Mutual Release with Alexander Capital L.P. (“Alexander”), pursuant to which the parties resolved certain disputes while not admitting any liability or wrongdoing (the “Settlement Agreement”). We agreed to (i) make a single cash payment of $100,000, (ii) issue 100,000 shares of Common Stock, and (iii) amend certain outstanding warrants to reduce the per share exercise price from $9.10 to $4.50. The shares of Common Stock were issued pursuant to an effective Registration Statement on Form S-3 (File No. 333-272956). The Settlement Agreement also contains other customary provisions, including a mutual release of claims and mutual non-disparagement provision.Litigation

OnThe ~~July~~Company 1,may ~~2024,~~be ~~the~~involved ~~Company~~from ~~entered~~time ~~into a Mutual Termination Agreement with Alexander (the “Termination Agreement”), pursuant~~ to ~~which~~time ~~the parties~~in ~~agreed~~litigation toor ~~terminate~~claims aarising ~~certain provision~~ in ~~that certain underwriting agreement, dated March 31, 2022, between~~ the ~~Company~~ordinary ~~and Alexander,~~course ~~as representative~~ of ~~the~~its ~~underwriters,~~business. ~~which~~While ~~granted Alexander a right of first refusal to act as~~ the ~~Company’s~~ultimate ~~financial advisor~~liability, ~~book-runner,~~if ~~book-running manager~~any, arising ~~manager,~~from ~~placement~~these ~~agent,~~claims orcannot ~~underwriter~~be indetermined ~~connection~~ with ~~any~~certainty, ~~transaction contemplated or consummated by us (~~the ~~“ROFR~~Company ~~Provision”).~~believes Inthat ~~exchange for~~ the ~~termination~~resolution of ~~the~~any ~~ROFR~~such ~~Provision,~~matters ~~and~~are innot ~~connection with the~~reasonably ~~closing~~likely ofhave ~~the~~a ~~2024~~material ~~Public~~adverse ~~Offering,~~effect on the Company’s ~~made~~financial acondition, ~~cash~~operating ~~payment~~results toor ~~Alexander~~cash ~~in the amount of $400,900~~flows.

On May 2, 2024, the Company entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Alexander Capital L.P. (“Alexander”), pursuant to which the parties resolved certain disputes while not admitting any liability or wrongdoing (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company agreed to (i) make a single cash payment of $100,000, (ii) issue 100,000 shares of common stock, and (iii) amend certain outstanding warrants held by Alexander to reduce the per share exercise price from $9.10 to $4.50. The shares of common stock were issued pursuant to the Shelf Registration Statement. The Settlement Agreement also contained other customary provisions, including a mutual release of claims and mutual non-disparagement provision.

On July 1, 2024, the Company entered into a Mutual Termination Agreement (the “Termination Agreement”) with Alexander, pursuant to which the parties agreed to terminate a provision in the Underwriting Agreement, dated March 31, 2022, entered into by and between the Company and Alexander, which granted Alexander a right of first refusal to act as the Company’s financial advisor, placement agent or underwriter in connection with certain financing transactions (the “ROFR Provision”). In exchange for the termination of the ROFR Provision, and in connection with the closing of the August 2024 Public Offering, the Company made a cash payment to Alexander in the amount of $400,900.

Nasdaq Listing Requirement

On September 6, 2024, the Company received a ~~staff~~ determination from The Nasdaq Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) to delist the ~~Company’s~~ common stock from ~~The~~the Nasdaq Capital Market indicating that (i) the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price ~~per share~~ for the ~~Company’s~~ common stock had closed below $1.00 for the previous 30 consecutive ~~business~~ business days, and (ii) the Company iswas subject to ~~the provisions contemplated under~~ Nasdaq Listing Rule 5810(c)(3)(A)(iii) because, as of September 5, 2024, the ~~Company’s~~ common stock had a closing bid price of $0.10 or less for at least ten consecutive trading days (the “September 2024 Staff Determination”).

On September 12, 2024, the Company requested an appeal hearing onwith respect to the September 2024 Staff Determination from athe Nasdaq Hearings Panel (the “Panel”), bywhich ~~filing~~had ~~a hearing request with Nasdaq pursuant to~~ the ~~procedures~~effect ~~set~~of ~~forth in the Nasdaq Listing Rules,~~ staying the delisting of the common stock pending the Panel’s decision.

Upon ~~successful~~ completion of the Reverse Stock Split, the Company received a letter from the ~~Nasdaq~~Staff ~~Office of General Counsel~~ on October 23, 2024, advising the Company that it had regained compliance with the minimum bid price ~~continued listing~~ requirements ~~in Listing Rule 5550(a)(2)~~ and that the Company iswas therefore in compliance with Nasdaq’s listing requirements. Consequently, the scheduled hearing before the Panel on ~~October 24, 2024,~~ was cancelled. ~~The Company’s common stock continues to be listed and traded on The Nasdaq Capital Market.~~

~~See~~On ~~Note~~July 141, –2025, the ~~“Subsequent~~Company ~~Events”~~received a determination from the Staff stating that the bid price of the common stock had closed below the $1.00 minimum inrequired ~~this~~by ~~Quarterly~~Nasdaq ~~Report~~Listing Rule 5550(a)(2) for ~~additional~~the ~~information~~prior ~~about~~30 consecutive business days (the ~~Reverse~~“Minimum ~~Stock~~Bid ~~Split~~Price Requirement”) and the Staff had determined to delist its securities from the Nasdaq ~~Listing~~Capital Market (the “July 2025 Staff Determination”). The Company timely requested and was granted an appeal hearing before the Panel to appeal the July 2025 Staff Determination, which had the effect of staying the delisting of the common stock pending the Panel’s decision. As of August 12, 2025, the common stock had closed above $1.00 for more than ten consecutive trading days. As a result, on August 13, 2025, the Company received a letter from the Staff advising that it had regained compliance with the Minimum Bid Price Requirement, and that it was therefore in compliance with Nasdaq’s listing requirements. Consequently, the appeal hearing before the Panel was cancelled.

9. Stockholders’ Equity

The Company is authorized to issue an aggregate of 220,000,000 shares of capital stock, par value $0.001 per share, consisting of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of December 31, 2024 and December 31, 2023, 2,096,082 and 69,230 shares, respectively, of common stock were issued and outstanding. No shares of preferred stock have been issued.

As of December 31, 2024, of the 50,000,000 Units sold in the August 2024 Public Offering at $0.20 per unit (Pre-Reverse Stock Split), 500,000 shares of common stock (post-Reverse Stock Split) were issued, as all 16,598,000 Pre-Funded Warrants have been exercised.

Prior to the Company’s payoff of the 3i Note in connection with the closing of the August 2024 Public Offering, the Company had issued 414 shares of common stock for the payment of $90,839 in interest. As of December 31, 2024, the Company has sold 4,336 shares of common stock for an aggregate amount of $828,491, of which $434,958 was used to repay a portion of the balance under the 3i Note, consisting of $380,042 to the loan principal, $34,204 to interest and $20,712 as a redemption premium.

F-21

On ~~May~~August 220, ~~2024~~2025, the atCompany received a notification letter (the ~~closing~~“August ~~price~~2025 ofStaff Notice”) from the Staff notifying it that the stockholders’ equity balance reported in the Quarterly Report for the three months ended June 30, 2025 was below the $~~209~~2.005 ~~per~~million required minimum ~~share,~~for continued listing on the ~~Company~~Nasdaq ~~agreed~~Capital toMarket ~~issue~~as set forth in Nasdaq Listing Rule 5550(b)(1). Following the Warrant Adjustments and resulting warrant exercises,~~000~~ ~~shares~~and the elimination of ~~common~~the ~~stock~~Cash ~~valued~~True-up atPayment ~~$209~~liability,~~000~~ asthe ~~well~~Company’s asstockholders’ ~~$100,000~~equity balance inincreased ~~cash~~above asthe ~~part~~required ofthreshold. aOn ~~settlement agreement~~September ~~for~~17, 2025, the Company received a ~~total~~letter ~~value~~from ofthe ~~$309,000~~Staff confirming it had regained compliance with Nasdaq’s listing requirements.

OnSee ~~March~~“Note 3114, ~~2023, at the closing price of $484.00~~ ~~per~~Subsequent ~~share,~~Events” ~~the Company issued 520 shares of common as part of a settlement agreement~~ for aadditional ~~total value of $251,680~~information.

~~On January 16, 2023, at the closing price of $454~~9. ~~per~~Stockholders’ ~~share, the Company issued 79 shares of common stock for stock-based compensation that had been accrued in 2023, for a total value of $36,029.~~Equity

AsThe Company is authorized to issue an aggregate of ~~December~~220,000,000 31shares of capital stock, ~~2024~~par value $0.001 per share, consisting of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of December 31, ~~2023~~2025 and 2024, 9,781,739 and 2,096,082 ~~and~~ ~~69,230~~ shares, respectively, of common stock were issued and outstanding. No shares of preferred stock have been issued.

AStockholders ~~holder of common stock is~~ are entitled to one vote for each share of common stock. The holders of common stock have no conversion, redemption or preemptive rights and shall be entitled to receive dividends when, as, and if declared by the board of directors. Upon dissolution, liquidation, or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, subject to the rights, if any, of the holders of any class or series of capital stock having a preference over the ~~right to participate with~~ common stock with respect to the distribution of assets of the Company upon such dissolution, liquidation, or winding up of the Company, the holders of common stock shall be entitled to receive the remaining assets of the Company available for distribution to its stockholders ratably in proportion to the number of shares of common stock held. Since no shares of preferred stock have been issued, no rights and privileges of preferred stockholders have been defined.

~~Since~~In noNovember 2025, the Company issued 125,000 unregistered shares of ~~preferred~~common stock ~~have~~to ~~been~~a ~~issued,~~vendor in exchange nofor ~~rights~~services rendered, and ~~privileges~~recorded ofa ~~preferred~~$141,250 expense ~~stockholders~~in ~~have~~legal ~~been~~and ~~defined~~professional fees.

~~Initial~~In ~~Public~~October ~~Offering~~2025, the Company issued 400,000 RSUs pursuant to the 2021 Plan (as defined below) that were immediately vested upon issuance and settled for 400,000 shares of common stock, and recorded $600,000 of stock-based compensation expenses. In addition, the Company issued an aggregate of 613,077 shares of common stock pursuant to the October 2025 Private Placement.

OnIn ~~April~~September 12025, ~~2022,~~ the Company ~~completed~~issued ~~an initial~~200,000 ~~public~~unregistered ~~offering (“IPO”). A total of 24,668~~ shares of common stock ~~were~~to ~~sold~~a atvendor ~~$700.00~~in ~~per~~exchange for ~~share~~services inrendered, ~~the~~and ~~IPO~~recorded $242,000 of ~~for~~legal ~~total~~and ~~gross proceeds~~professional offee ~~$17,267,250~~expenses.

In August 2025, 4,384,749 shares of common stock were issued upon exercise of Series A Warrants~~/Options~~ , and 599,193 shares of common stock were issued upon exercise of January 2025 Warrants.

~~During~~In ~~the~~July ~~year ended December 31~~2025, ~~2023~~85, ~~73,000 warrants~~252 ~~exercisable for 730~~ shares ~~at $290.00 per share were exercised using the cashless conversion option which resulted in the issuance~~ of ~~311~~ ~~shares of~~ common stock ~~(post-Reverse~~were ~~Stock~~issued ~~Split).~~upon ~~This~~exercise ~~left~~of ~~78,000 warrants remaining, which expired on November 9, 2024, without~~Series ~~being~~B ~~exercised, and there are no warrants remaining at $290~~Warrants.~~00 per share as of December 31, 2024.~~

~~During~~In ~~the~~April ~~year ended December 31~~2025, ~~2023,~~the Company ~~22,606~~issued ~~warrants~~105,000 ~~exercisable~~RSUs ~~for~~pursuant ~~226~~to ~~shares~~the of2021 ~~common~~Plan ~~stock~~that ~~at $332.00 per share~~ were ~~exercised~~immediately ~~using~~vested and ~~the~~settled ~~cashless~~for ~~conversion option~~105, ~~which resulted in~~000 ~~the issuance of 102~~ shares of common stock, and 15125,000 ~~warrants exercisable for 150~~ shares ~~of common stock at $332.00 per share~~ were ~~exercised on~~granted to a ~~cash~~vendor ~~basis, which resulted~~ in ~~the~~exchange ~~issuance~~for ofservices ~~150 shares of common stock. During the year ended December 31~~rendered, ~~2024, 7,535 warrants~~ ~~exercisable~~and ~~for~~expenses ~~75 shares~~ of ~~common stock at~~ $~~332.00 per share were exercised using the cashless conversion option which resulted~~ 80,850 in ~~the issuance of 16 shares of common~~ stock.-based ~~This~~compensation ~~leaves~~and ~~514~~$106,~~290~~250 in ~~warrants~~legal ~~remaining~~and ~~convertible~~professional ~~into~~fees ~~5,149~~were ~~shares of common stock with an exercise~~recorded ~~price~~for ofthese ~~$332.00~~two ~~per share as of December 31~~transactions, ~~2024~~respectively.

OnIn ~~August~~January 102025, ~~2023,~~ the Company issued ~~25,000~~an ~~warrants to~~aggregate ~~their investor relations firm in accordance with a letter~~ of ~~engagement signed July 22~~1, ~~2022~~048, ~~to purchase 250~~ 386 shares of common stock at anpursuant ~~exercise~~to ~~price of $500.00 per share. The warrants expire two years from~~ the ~~date~~January ~~of grant on August 9,~~ 2025. ~~The fair value of the~~Public ~~warrants was determined at date of issuance using the Black-Scholes option-pricing model and following assumptions: per share price of common stock on date of grant $5~~Offering.20, expected dividend yield of 0%, expected volatility of 88%, risk-free interest rate of 4.82% and expected life based on contractual life of two years. The fair value of $65,045 was recorded as an increase in additional paid-in capital and expensed to Legal and Professional Services.

As part of a settlement agreement on May 2, 2024, the Company agreed to modify the exercise price of 88,803 warrants convertible into 891 shares from $910.00 to $450.00.

F-22

~~8,125,000~~See ~~Series~~“Note ~~B Warrants exercisable for 496~~7,~~232~~ ~~shares~~Equity atand ~~$0.10~~Debt ~~per~~Financings” share were exercised using the cashless conversion option which resulted in the issuance of 215,678 shares of common stock (based on a $5.206 reset price). Another 46,300,000 Series B Warrants were exercised on a cash basis which resulted in the issuance of 1,078,689 shares of common stock (based on a $5.206 reset price). This leaves 3,075,000 Series B warrants remaining, which are exercisable for ~~87,384~~additional ~~shares (post-Adjustment), as of December 31, 2024~~information. In addition, 323,203 Series A Warrants were exercised on a cash basis which resulted in the issuance of 14,900 of common stock. This leaves 114,676,797 Series A Warrants remaining, which are exercisable for 5,286,692 shares of common stock, as of December 31, 2024.

As of December 31, 2024 and December 31, 2023, a total of 687,295 and 772,830 regular warrants to purchase 6,889 and 7,745 shares of common stock, respectively, were issued and outstanding. As of December 31, 2023, a total of 30,000 options, which were not issued under a specified plan, were outstanding. However, all 30,000 non-plan options expired on November 8, 2024, and there are no non-plan options outstanding as of December 31, 2024.Warrants

~~Below~~In isthe aJanuary ~~summary~~2025 Public ofOffering, the Company issued pre-funded warrants, ~~and~~which were immediately exercised for 574,193 shares of common stock ~~options~~at ~~issued~~$2.48 per share, and ~~outstanding~~1,048,386 January 2025 Warrants at an exercise price of $2.36 per share. In August 2025, as part of ~~December~~the Warrant Inducement, the Company issued 599,193 shares of common stock upon exercise of the January 2025 Warrants for a price of $1.31 per share. As of December 31, ~~2024:~~2025, 449,193 of the January 2025 Warrants remain outstanding.

Schedule of various warrants/options issued and outstanding
Number of Warrants			Issuable Shares		Exercise Price per share		Weighted Average Remaining Life (Years)
	3,075,000	(1)		87,384	$	0.10		N/A	(3)
	114,676,797	(2)		5,286,692	$	5.206		4.74
	514,290			5,149	$	332.00		6.89
	88,803			891	$	450.00		2.25
	25,000			250	$	500.00		0.61
	59,202			599	$	910.00		2.25
						118,439,092		5,380,965

In 2024, 8,125,000 Series B Warrants exercisable for 496,232 shares at $0.10 per share were exercised using the cashless conversion option which resulted in the issuance of 215,678 shares of common stock (based on a $5.206 reset price). Another 46,300,000 Series B Warrants were exercised on a cash basis which resulted in the issuance of 1,078,689 shares of common stock (based on a $5.206 reset price). In July 2025, 3,000,000 warrants were exercised on a cash basis, which resulted in the issuance of 85,252 shares. In 2024, 323,203 Series A Warrants were exercised on a cash basis which resulted in the issuance of 14,900 of common stock. In August 2025, as part of the Warrant Inducement, the exercise price of the Series A Warrants was reduced to $1.31 per share, and 4,384,749 shares were issued upon exercise of 95,112,212 warrants. As of December 31, 2025, there were 19,564,585 Series A Warrants exercisable for 901,943 shares and 75,000 Series B Warrants exercisable for 2,132 shares outstanding.

~~(1)~~In ~~Series~~2023, Bthe ~~Warrants~~Company issued ~~are~~25,000 warrants ~~subject~~ to ~~reset~~purchase ~~pricing~~250 shares toof ~~determine~~common ~~the~~stock, ~~number~~at an exercise price of ~~shares~~$500.00 per ~~issuable~~share, to its investor relations firm in accordance with an engagement letter. All 25,000 warrants expired August 9, 2025 without being exercised.

	(2)	Series A Warrants are subject to reset pricing to determine the number of shares issuable.
	(3)	Series B warrants do not have an expiration date.

In 2022, the Company issued 148,005 warrants to purchase 1,490 shares of common stock, at an exercise price of $910.00 per share, with an expiration date of March 31, 2027. As part of a settlement agreement on May 2, 2024, the Company agreed to modify the exercise price of 88,803 warrants convertible into 891 shares from $910.00 to $450.00. As of December 31, 2025, all warrants with an exercise price of $910.00 and $450.00 remain outstanding.

In 2021, the Company issued 559,431 warrants to purchase 5,602 shares of common stock at an exercise price of $332.00 per share, with an expiration date of November 22, 2031. Warrants were exercised during 2023 and 2024, and as of December 31, 2025, there were 514,290 warrants exercisable for 5,149 shares outstanding.

Below is a summary of warrants issued and outstanding as of December 31, 2025:

	Schedule of various warrants/options issued and outstanding
Number of Warrants			Issuable Shares		Exercise Price per Share			Weighted Average Remaining Life (Years)
	75,000	(1)		2,132	$	0.10			N/A	(2)
	449,193			449,193	$	1.31	(3)		4.01
	19,564,585	(4)		901,943	$	1.31	(5)		3.74
	514,290			5,149	$	332.00			5.89
	88,803			891	$	450.00			1.25
	59,202			599	$	910.00			1.25
	20,751,073			1,359,907

	(1)	Reflects Series B Warrants, which are subject to reset pricing to determine the number of shares issuable.
	(2)	Series B Warrants do not have an expiration date.
	(3)	Reflects January 2025 Warrants, which were part of the Warrant Inducement, and their exercise price was reduced from $2.36 to $1.31 per share.
	(4)	Reflects Series A Warrants, which are subject to reset pricing to determine the number of shares issuable.
	(5)	The Series A Warrants were part of the Warrant Inducement, and their exercise price was reduced from $5.206 to $1.31 per share.

F-23

Warrant Inducement and Repricing

On August 14, 2025, the Company entered into an inducement offer letter agreements with certain holders of the Series A Warrants and the January 2025 Warrants, which reduced the exercise price of the Series A Warrants from $5.206 to $1.31 per share, and the January 2025 Warrants from 2.36 to $1.31 per share. The difference between the fair value of the warrants immediately prior to and following modification was treated as a transaction cost, which is netted against proceeds received. The difference in fair value for the Series A Warrants was $1,423,166, and the difference in fair value for the January 2025 Warrants was $97,746. Both were calculated using the Black-Scholes option-pricing model and were based on the following assumptions:

Warrant	Stock Price	Remaining Life (Years)	Volatility	Risk-Free Rate	Dividend
Series A	$2.02	4.12	129.9%	3.78%	—
January 2025	$2.02	4.39	129.9%	3.77%	—

During August 2025, 4,384,749 shares were issued upon exercise of Series A Warrants, and 599,193 shares were issued upon exercise of January 2025 Warrants, and the difference in fair value was netted against the gross proceeds along with other issuance costs.

Equity Plans

As of December 31, 2024, the Company had adopted two stock-based compensation plans, the 2021 Incentive Award Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”).

During the year ended December 31, 2024, the Company granted 161 RSUs, granted 1,045 options, and canceled 100 options (post-Reverse Stock Split) under the 2021 Incentive Award Plan. The compensation costs that have been charged against operations were $581,504 and $495,320 for the years ended December 31, 2024 and 2023.

No shares have been issued to date under the 2021 Employee Stock Purchase Plan.

2021 Incentive Award Plan

The purpose of the ~~Company’s~~ 2021 ~~Incentive Award~~ Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities. Various stock-based awards may be granted under the 2021 ~~Incentive Award~~ Plan to eligible employees, consultants, and non-employee directors~~. The number of shares issued under the 2021 Incentive Award Plan is subject to limits and is adjusted annually. No more than 1~~,~~000,000~~ ~~shares may be issued pursuant to the exercise of incentive stock options. The aggregate share limit will be subject to an annual increase on the first day of each calendar year ending on and~~ including January 1, 2031, by a number of shares equal to the lesser of (i) a number equal to 5% of the aggregate number of shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company's board or committee. As of December 31, 2024, the aggregate number of shares that can be issued under the 2021 Incentive Award Plan is 17,958, of which 11,430 options and ~~649~~ RSUs ~~have been granted~~. The number of shares granted, the exercise price, and the terms will be determined at date of grant; however, the exercise price shall not be less than 100% of the fair value on the grant date (110% for options granted to greater than 10% stockholders, except for options granted to Mr. Yozamp in August 2023, which were at 100%) and the term shall not exceed ten years.

~~F-23~~The number of shares issued under the 2021 Plan is subject to an initial limit and is adjusted annually pursuant to an evergreen provision. No more than 1,000,000 shares may be issued pursuant to the exercise of incentive stock options. The aggregate share limit will be subject to an annual increase on the first day of each calendar year ending on and including January 1, 2031, by a number of shares equal to the lesser of (i) a number equal to 5% of the aggregate number of shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company's board or committee.

The type of award, number of shares subject to the award, exercise price (if any), vesting provisions (if any), and other terms of the awards will be determined at date of grant; however, the exercise price of options shall not be less than 100% of the fair value on the grant date and the term of options shall not exceed ten years. As of December 31, 2025, awards covering an aggregate of 872,762 shares were eligible to be issued under the 2021 Plan, of which 215,079 shares underlying options and 560,649 shares underlying RSUs had been granted. On January 1, 2026, an aggregate of 489,086 shares were added to the plan reserve pursuant to the evergreen provision based on the number of shares outstanding as of December 31, 2025.

During the year ended December 31, 2025, the Company granted RSUs covering an aggregate of 560,000 shares and options covering an aggregate of 203,278 shares, and canceled options covering an aggregate of 104 shares under the 2021 Plan. The stock-based compensation expenses incurred during the years ended December 31, 2025 and 2024 were $1,163,654 and $581,504, respectively.

2021 Employee Stock Purchase Plan

The purpose of the ~~Company’s~~ 2021 ~~Employee~~ESPP ~~Stock Purchase Plan~~ is to assist eligible employees of the Company in acquiring a stock ownership in the Company and to help such employees ~~provide~~ provide for their future security and to encourage them to remain in the employment of the Company. The 2021 ~~Employee~~ESPP ~~Stock Purchase Plan~~ consists of a Section 423 Component and Non-Section 423 Component. The Section 423 Component is intended to qualify as an employee stock purchase plan and also authorizes the grant of options. Options granted under the Non-Section 423 Component shall be granted pursuant to separate offerings containing sub-plans. The Company may make one or more offerings under the 2021 ~~Employee Stock Purchase Plan~~ESPP. The duration and timing of each offering period may be established or changed by the board, but in no event may an offering period exceed 27 months and in no event may the purchase period for the option exceed the duration of the offering period under which it is established. On each exercise date for an offering period, each participant shall automatically be deemed to have exercised the option to purchase the largest number of whole shares which can be purchased under the offering. Option awards are generally granted with an exercise price equal to 85% of the lesser of the fair market value of a share on (a) the applicable grant date and (b) the applicable exercise date, or such other price as designated by the administrator~~, provided that in no event shall the option price be less that the per share par value price~~. The maximum number of shares granted under the 2021 ~~Employee~~ESPP ~~Stock Purchase Plan~~ shall not exceed 25,000 shares.

The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate. Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. The risk-free interest rate is calculated based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The Company has historically not paid dividends and have no foreseeable plans to pay dividends.

The Company has computed the fair value of the 2,455 options granted during the year ended December 31, 2023 using the following assumptions:

Schedule of fair value of assumptions
Expected volatility	105.27	%
Expected dividends	None
Expected term (in years)	6.0
Risk free rate	4.33%

The Company has computed the fair value of the 1,045 options granted during the year ended December 31, 2023 using the following assumptions:

Expected volatility	124.35	%
Expected dividends	None
Expected term (in years)	5.42
Risk free rate	4.08%

F-24

~~The~~As ~~following~~of ~~table~~December ~~summarizes~~31, 2025, ~~the~~an ~~Company’s~~aggregate of 524,051 ~~stock~~shares ~~option~~were ~~activity~~eligible to be issued under the 2021 ESPP. ~~Incentive~~On ~~Award~~January ~~Plan:~~1, 2026, an aggregate of 97,817 shares were added to the plan reserve pursuant to the evergreen provision based on the number of shares outstanding as of December 31, 2025.

Schedule of stock option activity
(in thousands except number of options and per options data)	Number of options		Weighted average exercise price	Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at beginning of period	10,756	$	377.28	—	$	—
Granted	1,045		345.00	—		—
Exercised	—		—	—		—
Canceled	371		444.06	—		—
Outstanding at end of period	11,430	$	372.16	7.36	$	—
Exercisable at end of period	10,463	$	365.88	7.23	$	—

No shares have been issued under the 2021 ESPP.

~~During~~The ~~the~~Company ~~years~~has ~~ended December 31, 2024 and 2023,~~computed the ~~weighted-average grant-date~~ fair value of ~~the~~ options granted toduring ~~employees~~the ~~and~~year ~~non-employees~~ended ~~was $312,873 and $998,915, respectively. Unrecognized compensation expense related to employees and non-employees was $101,970 as of~~ December 31, ~~2024.~~2025 ~~The~~using options granted in May 2022 were vested 100% at time of grant. The options granted in August 2023 began to vest in equal quarterly installments beginning September 30, 2023 and ending June 30, 2026. The options granted in March 2024 were vested 50% at the ~~time~~following ~~of grant, then the remainder continues to vest in 12 equal quarterly installments thereafter, beginning June 30, 2024.~~assumptions:

The following table summarizes the Company’s RSU activity under the 2021 Incentive Award Plan:


Expected volatility	124.35	%
Expected dividends	None
Expected term (in years)	5.42
Risk free rate	4.08%

Schedule of RSU activity
(in thousands except number of options and per options data)	Number of restricted stock awards		Weighted average grant-date fair value
Nonvested at beginning of year	366	$	180,072
Granted	161		73,094
Vested	527		253,166
Forfeited	—		—
Nonvested at end of year	—	$	—

The Company has computed the fair value of options granted during the year ended December 31, 2024 using the following assumptions:

There was no unrecognized compensation cost related to non-vested RSUs as of December 31, 2024.

Expected volatility	124.35	%
Expected dividends	None
Expected term (in years)	5.42
Risk free rate	4.08%

The Company uses the “simplified method” to estimate expected term. Under the simplified method, an option’s expected term is calculated as the time until expiration.

The following table summarizes the option activity under the 2021 Plan during the year ended December 31, 2025:

Schedule of stock option activity
	Number of options		Weighted average exercise price	Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2024	11,430	$	372.16	—	$	—
Granted	203,278		0.78	—		—
Exercised	—		—	—		—
Canceled	104		345.00	—		—
Outstanding at December 31, 2025	214,604	$	20.39	9.41	$	—
Exercisable at December 31, 2025	214,217	$	19.66	9.41	$	—

During the years ended December 31, 2025 and 2024, the weighted-average grant-date fair value of the options granted to employees and non-employees was $197,444 and $312,873, respectively.

The options granted in July 2025 were vested as to 100% of the underlying shares at the time of grant. The options granted in March 2024 vested as to 50% of the underlying shares at the time of grant and the remaining shares are

F-25

subject to vesting in 12 equal consecutive quarterly installments commencing September 30, 2024 such that the option will become fully vested on March 31, 2027.

The following table summarizes the RSU activity under the 2021 Plan during the year ended December 31, 2025:

	Number of RSUs		Weighted average grant-date fair value
Nonvested at December 31, 2024	—	$	—
Granted	560,000		0.18
Vested	15,000		1.17
Forfeited	—		—
Nonvested at December 31, 2025	40,000	$	—

There was no unrecognized compensation cost related to non-vested RSUs as of December 31, 2025.

Common Stock Reserved for Future Issuance

The following is a summary of shares of common stock ~~shares~~ reserved for future issuance as of December 31, ~~2024~~2025:

Schedule of common stock shares reserved for future issuance
Exercise of Warrants			6,639
Exercise of warrants			6,889
Exercise of Stock Options – 2021 Plan			214,217
Exercise of stock options – 2021 Incentive Award Plan			11,430
Exercise of Series A Warrants			901,943
Exercise of restricted stock units – 2021 Incentive Award Plan			—
Exercise of Series B Warrants			2,132
Exercise of Series A warrants			5,286,692
Exercise of January 2025 Warrants			449,193
Exercise of Series B warrants			87,384
Exercise of Pre-Funded Warrants			144,498
Total shares of common stock reserved for future issuances			5,392,395
Settlement of RSUs			55,000
Total shares of common stock reserved for future issuances			1,773,622

10. Segment Reporting

The Company focuses on the design, assembly, manufacturing, and sale of ~~lithium iron phosphate (“~~LiFePO4”) batteries and supporting accessories for ~~recreational vehicles (“~~RVs”), marine, ~~applications~~ and ~~home energy storage products with plans to expand into~~ industrial applications. The WeCompany ~~sell~~sells to wholesalers, distributors, and OEMs, as well as directly to consumers~~, and cannot always determine which application our batteries are ultimately used in~~.

F-25

The accounting policies for this segment aligns with those outlined in the summary of significant accounting policies. The Chief Executive Officer is the Chief Operating Decision Maker (CODM) and assesses the performance of this segment and allocates resources based on net income or loss, which is reflected on the Statements of Operations, and the measure of segment assets is represented as total assets on the Balance Sheet, included in the Financial Statements section of this Annual Report.

The CODM evaluates the net income or loss from our one reportable segment. Net income or loss is also utilized to monitor the difference between budgeted and actual results, offering insights into financial performance and guiding any necessary corrective actions. Additionally, the CODM employs net income or loss for competitive analysis by comparing its financial performance with other competitors in the Energy Storage (ES) space.

The Company does not engage in any intra-entity sales or transfers.

The Company has identified one reportable segment: Energy Storage (ES). This segment generates revenue in North America, and the Company manages its product sales and associated expenses on a total basis.

The accounting policies for this segment align with those outlined in the summary of significant accounting policies. The Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM assesses the performance of this segment and allocates resources based on net income or loss, which is reflected on the Statements of Operations. The measure of segment assets is total assets, which is reflected on the Balance Sheets.

The CODM evaluates the net income or loss from our one reportable segment. Net income or loss is also utilized to monitor the difference between budgeted and actual results. Additionally, the CODM employs net income or loss for competitive analysis by comparing its financial performance with other competitors in the Energy Storage (ES) space.

11. Income Taxes

Our losses before income taxes for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 were generated primarily from U.S. operations.

We have no current or deferred provision for income taxes from continuing operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024.

The significant differences between the U.S. Federal statutory rate and our effective rate for financial reporting purposes are as follows:

Schedule of income before income tax, domestic and foreign
Schedule of significant differences between the U.S. Federal statutory rate and our effective rate
	Years Ended December 31,	~~Years Ended December 31,~~
		2024				2023
	2025				2024
Federal statutory tax rate	(21.0	)	~~(21.0~~%	)	%(21.0	)	~~(21.0~~%	)%
State taxes, net of federal tax benefit	(5.3	)	~~(5.1~~	)	(5.1	)	~~(4.9~~	)
Change in valuation allowance	31.4		~~22.6~~		22.6		~~19.9~~
NQSO Comp – Other	—		~~2.1~~		2.1		~~2.2~~
EQ Comp – Other	—		~~0.0~~		0.0		~~0.0~~
True-up Adjustment			1.5				3.8
Permanent difference	(0.2	)			—
Effective tax rate			—		%		—	%
True-up Adjustment	(4.9	)			1.5
Effective tax rate	—		%		—		%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows for the year ended December 31, ~~2024~~2025 and ~~2023~~2024.

Deferred income tax assets and liabilities consist of the following:

Schedule of components of income tax expense
	As of December 31,
	2024			2023
	2025			2024
Deferred tax assets:
Net Operating Losses	$	68,~~274~~112,~~519~~158		$	36,~~434~~274,~~559~~519
Stock-based compensation		~~170~~528,~~064~~359			~~153~~170,~~692~~064
Depreciation		138,334			61,547
Inventory reserve		143,468			—
Other		256,179			120,072
Depreciation		12,784			138,334
Subtotal		6,839,096			3,769,870
Other		—			256,179
Valuation allowance		(6,839,096	)		(3,769,870	)
Subtotal		8,796,769			6,839,096
Valuation allowance		(8,796,769	)		(6,839,096	)
Deferred tax liabilities:		—			—
Net deferred tax asset	$	—		$	—

~~F-26~~For financial reporting purposes, the Company incurred losses for the years ended December 31, 2025 and 2024 and for each period since inception. Accordingly, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2025, the Company had approximately $30,945,899 of federal and state net operating losses.

For financial reporting purposes, the Company incurred losses for the year ended December 31, 2024 and December 31, 2023 and for each period since inception. Accordingly, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2024, the Company had approximately $29,036,703 of federal and state net operating losses.

Accrued income taxes as of the end of each year as follows:

Schedule of accrued income taxes
	As of December 31,
		As of December 31,
	2025			2024
		2024				2023
Current:
Current:
Federal	$	—		$	—
Federal		$	—			$	—
State Franchise Fees		150			150
State Franchise Fees			150				1,840

A reconciliation between the amount of income tax benefit determined by applying the U.S statutory income tax rate to pre-tax loss is as follows:

Summary of operating loss carryforward
	As of December 31,
	2024			2023
Income tax provision at federal statutory rate	$	(2,839,422	)	$	(1,565,126	)
State taxes		(689,421	)		(361,328	)
Stock-based compensation		278,572			163,170
Penalties and Fines		—			22
Other		196,608			283,876
Valuation allowance		3,053,661			1,479,386
Net deferred tax asset	$	—		$	—

Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The aggregate changes in the balance of gross unrecognized tax benefits, which excludes penalties and interest, for the year ended December 31, 2024 is zero.

The Company is subject to taxation in the United States and Oregon. There are no ongoing examinations by taxing authorities at this time. The Company’s various tax years 2018 through 2024 remain open for examination by various taxing jurisdictions.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2024, the Company has not accrued any penalties or interest related to uncertain tax positions.

In anticipation of an initial public offering, the Company converted from a limited liability company to a C corporation, a taxable entity, effective November 1, 2021.

For the year ended December 31, 2023, the Company accrued $1,840 for state minimum income taxes, and did not accrue federal income taxes due to net losses in 2023. For the year ended December 31, 2024 the Company adjusted the accrual to $150 for state income taxes, as we do not anticipate owing more than the minimum state income taxes for 2024.

Since converting to a C corporation, the Company has incurred losses and consequently recorded no provision for state or federal income taxes for the years ended December 31, 2024 and 2023. The Company maintains a full valuation allowance on all deferred tax assets, as it has concluded that it is more likely than not that these assets will not be realized. As of December 31, 2024 and December 31, 2023, there were no material unrecognized tax benefits included in the accompanying balance sheets that would, if recognized, affect the effective tax rate.

F-27

Schedule of reconciliation
	As of December 31,
	2025					2024
Income tax provision at federal statutory rate	$	(1,309,389	)	21.0	%	$	(2,839,422	)	21.0	%
State taxes		(328,013	)	5.3	%		(689,421	)	5.1	%
Stock-based compensation		—		—	%		278,572		(2.1	)%
Permanent difference		(12,326	)	0.2	%		—		—	%
Other		(307,795	)	4.9	%		196,608		-1.5	%
Change in valuation allowance		1,957,673		(31.4	)%		3,053,661		(22.7	)%
Effective tax	$	150		0.0	%	$	—		—	%

The Company is subject to taxation in the United States and Oregon. There are no ongoing examinations by taxing authorities at this time. The Company’s various tax years 2019 through 2025 remain open for examination by various taxing jurisdictions.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025, the Company has not accrued any penalties or interest related to uncertain tax positions.

In anticipation of an initial public offering, the Company converted from a limited liability company to a C corporation, a taxable entity, effective November 1, 2021.

For the years ended December 31, 2025 and 2024, the Company accrued $150 for state minimum income taxes each year, and did not accrue federal income taxes due to net losses in both years.

Since converting to a C corporation, the Company has incurred losses and consequently recorded no provision for state or federal income taxes for the years ended December 31, 2025 and 2024. The Company maintains a full valuation allowance on all deferred tax assets, as it has concluded that it is more likely than not that these assets will not be realized. As of December 31, 2025 and 2024, there were no material unrecognized tax benefits included in the accompanying balance sheets that would, if recognized, affect the effective tax rate.

12. 401(k) Plan

The Company adopted a 401(k) Plan (“Plan”) for the benefit of its employees. Employees may contribute to the Plan within defined limits as defined by the Internal Revenue Service. Substantially all employees are eligible to participate in the Plan. The Company has the option to make profit -sharing contributions at its discretion. No profit-sharing contributions have been made.

13. Related-Party Transactions

As of December 31, 2025 ~~2023~~and 2024, ~~related~~there were no related-party transactions ~~consisted~~ ofrequiring ~~the~~disclosure ~~Notes~~under ~~(see~~SEC ~~Note~~rules 6,and ~~Stockholder~~no ~~Promissory~~such ~~Notes)~~transactions were contemplated.

As of December 31, 2024, there were no outstanding related-party transactions, as all Stockholder Promissory Notes had been repaid.

14. Subsequent Events

~~January~~The Company evaluated its financial statements for the year ended December 31, 2025 ~~Registered~~for ~~Direct~~subsequent ~~Offering~~events ~~and~~through ~~Warrant~~the date the financial statements were ~~Private~~available ~~Placement~~to be issued. The following subsequent events are noted:

OnDecember ~~January 3,~~ 2025, ~~the Company sold to certain institutional investors, in a registered direct offering, an aggregate of (i) 474,193 shares of common stock; and (ii) 574,193 pre~~At-~~funded warrants (the “January 2025 Pre-Funded Warrants”) to purchase up to 574,193 shares of common stock (the “January 2025 Pre-Funded Warrant Shares”).~~ The ~~offering price per share was $2.48 and the offering price per January 2025 Pre~~-~~Funded Warrant was $2.479. Each January 2025 Pre-Funded Warrant was exercisable for one share of common stock for $0.001 immediately~~Market ~~upon~~Issuance ~~issuance~~Sales and the January 2025 Pre-Funded Warrants were all exercised immediately upon issuance. The number of January 2025 Pre-Funded Warrant Shares are subject to adjustments for stock splits, recapitalizations, and reorganizations. The January 2025 Pre-Funded Warrants were exercised in full on January 3, 2025.Agreement

InOn aDecember ~~concurrent~~12, ~~private placement~~2025 ~~that~~the ~~closed~~Company ~~January~~entered 3,into ~~2025,~~an ~~the~~At-The-Market ~~Company~~Issuance ~~also~~Sales ~~issued~~Agreement. toWe ~~the~~commenced ~~institutional~~sales ~~investors~~under ~~unregistered~~the ~~warrants~~agreement ~~(the~~in “January ~~2025~~2026 ~~Warrants”) to~~and ~~purchase~~have ~~up to~~ sold an aggregate of 1,~~048~~064,~~386~~ 396 shares offor ~~common~~net ~~stock~~proceeds ~~(the “January 2025 Warrant Shares”) at an exercise price~~ of ~~$2.36~~approximately ~~per share~~$932, ~~subject to adjustment for reverse stock splits, recapitalizations, and reorganizations. In connection with the private~~567 ~~placement,~~as ~~the~~of ~~Company~~March ~~filed a registration statement on Form S-1 (File No. 333-284354), which was declared effective by the SEC on February~~ 11, ~~2025, covering the resale of the January 2025 Warrant Shares~~2026.

~~The~~January ~~Company~~2026 ~~received net proceeds of approximately~~Nasdaq ~~$2.2~~Staff ~~million~~Determination from the offering and used approximately $500,000 of the net proceeds to satisfy a portion of certain amounts owed to our Series A Warrant holders pursuant to the terms of the outstanding Series A Warrants.Letter

On January 29, 2026, the Company received a determination from the Staff stating that it did not meet the Minimum Bid Price Requirement and that the Staff had determined to delist its securities from the Nasdaq Capital Market subject to a compliance period. Nasdaq provided the Company with a 180-calendar day compliance period, or until July 28, 2026, to regain compliance with the listing rule. The Company is currently evaluating options to regain compliance and intends to timely regain compliance with the Minimum Bid Price Requirement. Under Nasdaq rules, the Company is currently eligible to conduct a reverse stock split of its common stock to regain compliance if necessary.

F-28

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