Item 4 — Purpose of Transaction
The disclosure regarding the SPA and the Purchase set forth above in Item 3 is incorporated herein by reference. The Issuer has further described the SPA, the Purchase and the Side Letter in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the "SEC") on August 14, 2026. Pursuant to a side letter (the "Side Letter") entered into by Nantahala and the Issuer on August 7, 2026, for so long as Nantahala beneficially owns at least 15% of the outstanding shares of Common Stock (which determination shall be made without regard to the Beneficial Ownership Limitation), until the tenth anniversary of the Purchase, the board of directors (the "Board") of the Issuer shall appoint a Nantahala designee as a member of the Board (and any of its committees), subject to the reasonable agreement of the Issuer and applicable qualification requirements; Nantahala shall have the right to receive certain financial information and information presented to the Board, meet with Issuer management on a quarterly basis and be informed of certain material developments and events, subject to customary confidentiality obligations; and the Issuer shall refrain from taking certain actions without Nantahala's prior written consent, including entering into certain affiliated transactions, increasing the size of the Board, making certain terminations of, or replacing, the Issuer's chief executive officer, declaring certain dividends or distributions, incurring indebtedness in excess of $2,500,000, or adopting or seeking stockholder approval of a rights plan. During the term of the Side Letter, if Nantahala beneficially owns at least 20% of the outstanding shares of Common Stock (which determination shall be made without regard to the Beneficial Ownership Limitation, and which condition was satisfied as of immediately following the Purchase), then the Board shall appoint a second Nantahala designee as a member of the Board, subject to the reasonable agreement of the Issuer and applicable qualification requirements. The Issuer also agreed to use its commercially reasonable efforts to facilitate the voluntary resignation of two current members of the Board within sixty days after the Purchase and to certain other customary terms and conditions relating to Nantahala's designee(s) to the Board. Depending on various factors including, without limitation, the Issuer's financial position and investment strategy, the price levels of the Common Stock, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in communications with the Issuer's management and Board, engaging in discussions with other Issuer investors and others about the Issuer and the Nantahala Investors' investment, making proposals to the Issuer concerning changes to the capitalization, ownership structure, Board structure (including Board composition) or operations of the Issuer, purchasing or selling additional shares of Common Stock or other Issuer securities or engaging in other transactions that may increase or decrease their interest in or economic exposure to shares of Common Stock of the Issuer or other Issuer securities, or changing their intention with respect to any and all matters referred to in Item 4. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis.