Risk Factors Update Summary

• Our 2022 Loan Agreements may limit our flexibility in financing and operations, adversely affecting our financial condition. This includes a repayment of $15 million under the 2022 Term Loan Agreement.
• The issuance of 280,000 shares of Redeemable Convertible Preferred Stock may dilute existing common stock ownership significantly.
• We have defaulted under our 2022 Loan Agreements with MidCap, increasing the risk of additional defaults. This could significantly impact our working capital needs and financial condition.
• Holders of Redeemable Convertible Preferred Stock own approximately 81% of common stock on an as-converted basis, influencing company decisions.
• We incurred a net loss of $47.5 million for the year ended December 31, 2023, compared to $48.5 million in 2022. This trend raises concerns about our ongoing viability.
• The Redeemable Convertible Preferred Stock has a cumulative dividend rate of 8% per annum, compounding quarterly, impacting financial obligations.
• Our accumulated deficit increased from $113.7 million to $161.5 million as of December 31, 2023, indicating worsening financial health and potential challenges in raising future capital.
• The conversion of Redeemable Convertible Preferred Stock could lead to significant market price volatility for common stock, affecting investor confidence.
• We may need to raise additional capital to fund our continuing operations, which may not be available on acceptable terms or at all, potentially causing significant operational restrictions.
• The holders of Redeemable Convertible Preferred Stock have preferential rights that could limit common stockholders' returns during liquidation events.