NOTE 7 – ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

Zippy Final Make Whole Provision

On June 30, 2026, the Company and Zippy entered into Side Letter Amendment No. 2 to the Series B-3 Preferred Stock Purchase Agreement, as previously amended, to modify the timing and calculation of the Final Make Whole Provision. The amendment replaced the original single settlement date with three separate measurement dates occurring on July 31, 2026, September 30, 2026, and December 31, 2026. The amendment maintains Zippy’s economic protection to receive aggregate proceeds equivalent to $10.50 per share on shares subject to the Final Make Whole Provision and does not increase the Company’s aggregate make-whole obligation.

In April 2026, Zippy sold 467,171 shares of the Company’s common stock that were subject to the Final Make Whole Provision at an average price of $3.78 per share. As a result, the Company paid Zippy approximately $3.2 million during the three months ended June 30, 2026.

As of June 30, 2026, Zippy held 857,141 shares of the Company’s common stock that remain subject to the Final Make Whole Provision, as amended. During the three and six months ended June 30, 2026, the Company recognized a gain of $2.7 million and a loss of $1.2 million, respectively, related to the Final Make Whole Provision, which is included in “Gain (loss) on make whole provision” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.