NOTE 14—SUBSEQUENT EVENTS

The Company has evaluated all events or transactions that occurred after September 30, 2024 through November 7, 2024, which is the date that the condensed consolidated financial statements were available to be issued. During this period, there were no material subsequent events requiring recognition or disclosure, other than those described below.

Bankruptcy

As previously disclosed, on October 1, 2024 the Company and its direct domestic subsidiaries filed voluntary petitions for relief (the "Bankruptcy Petitions") under chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Company will continue to operate its businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In addition, the Company filed a motion seeking approval for certain procedures relating to the marketing and auction (if necessary) of all or some of the Company's assets, including approval of an Asset Purchase Agreement (as previously defined) and certain bidding procedures for the sale of the Transferred Assets (as previously defined) and other assets (the "Bidding Procedures"). The Asset Purchase Agreement includes customary representations and warranties and various customary covenants under the circumstances that are subject to certain limitations, including, without limitation, a break-up fee, expense reimbursement and the right to designate executory contracts and unexpired leases to assume or reject.

On October 17, 2024, the Bankruptcy Court entered an order, which, among other things, approved the Bidding Procedures and the designation of Sonendo as the “stalking horse” bidder.

On November 4, 2024, the Company commenced the auction for the sale of the Transferred Assets (the “Auction”) pursuant to the Bidding Procedures. Following the completion of the Auction, the Company announced that the bid submitted by MegaGen Implant Co., LTD (“MegaGen”) was the successful bid (the “Successful Bid”), and the bid submitted by Sonendo was the backup bid. The Successful Bid is subject to entry into definitive documentation between the Company and MegaGen. A hearing to consider approval of the results of the Auction is scheduled to take place on November 12, 2024.

OTCQB Delisting

On October 2, 2024, the Company received notice from OTC Markets Group, Inc. (the “OTC”) that the Company no longer meets the Standards for Continued Eligibility for OTCQB as per the OTCQB Standards, Section 2.3(5). The Company’s shares of common stock commenced trading on the Pink Market platform operated by the OTC at the market open on October 3, 2024 under the “BIOLQ” ticker symbol. Existing stockholders will find the securities quoted on the OTC Pink Market and freely tradable without any further action needed.