Item 4 — Purpose of Transaction
Investment: The Reporting Persons acquired the Series A Preferred Stock for investment purposes. Under the October 22, 2026 Securities Purchase Agreement, Bubble Holdings agreed to invest up to $20 million, purchasing 15,000 preferred shares for $15 million at the initial closing and potentially another 5,000 shares for $5 million at a deferred closing. Deferred investment: The additional $5 million is generally conditioned on the Issuer achieving 2026 net sales of at least $172.5 million and Adjusted EBITDA of at least negative $3 million, together with certain customary closing conditions. Bubble may waive these financial conditions or elect to close early, in which case they are automatically waived. Board representation: While Bubble and its affiliates hold at least 10,000 preferred shares or 8% of the Issuer's common stock on an as-converted basis, Bubble may designate one director to the Board. The Board was increased to eight directors at the initial closing. Voting restrictions: While Bubble owns at least 5%, it generally has discretion over voting or tendering shares representing up to 20% of the Issuer's common stock. Shares above that threshold must generally be voted or tendered proportionately with other shareholders. Additional proportional voting restrictions apply to director elections while Bubble maintains its board designation right. Standstill and transfer restrictions: While holding at least 5%, Bubble is subject to customary standstill provisions restricting additional acquisitions, takeover proposals, proxy solicitations and efforts to control the Issuer. Its preferred shares and underlying common shares are also generally subject to a 12-month transfer restriction, together with a right of first offer in favor of the Issuer and additional restrictions on certain significant transfers. Preemptive and information rights: While the board-designation ownership threshold is maintained, Bubble has pro rata participation rights in certain future equity issuances and specified information rights. Preferred stock economics: Each Series A preferred share has an original issuance price of $1,000 and is convertible into Class A Shares at an initial conversion price of $1.448 per share, subject to anti-dilution adjustments and an aggregate 14,428,844-share conversion cap. Dividends: Beginning on the relevant contractual commencement date, the preferred shares accrue 6% cumulative annual dividends, compounded quarterly. Dividends may generally be paid in cash or added to the preferred stock's Accreted Value as PIK dividends. Issuer conversion right: From the third anniversary of the initial closing, the Issuer may force conversion if specified conditions are satisfied, including the Class A Shares trading at least 150% of the conversion price for 20 out of 30 consecutive trading days, together with registration and NYSE-listing requirements. Redemption rights: Bubble can require redemption following certain Fundamental Changes and, subject to the agreement, after the fourth anniversary of the initial closing or upon specified excessive indebtedness or significant asset dispositions. The Investor Redemption Price is generally the greater of the Accreted Value and 1.5x the original issuance price, adjusted for certain dividends. Protective rights: While Bubble owns at least 50% of the preferred shares or 8% of the common stock on an as-converted basis, certain significant corporate actions require approval of the preferred holders or, where applicable, Bubble's director designee. These include specified amendments, senior or parity securities issuances, major >$25 million acquisitions or divestitures, certain dividends/repurchases, bankruptcy or liquidation and specified other fundamental actions. Registration rights: The Issuer must register the Class A Shares underlying the preferred stock for resale. Bubble also receives two demand registration rights, customary piggyback rights, up to one underwritten shelf takedown per quarter, and up to two registered block trades per 12-month period.