NOTE 9 – WARRANT LIABILITIES

In 2004, the Company issued warrants to various investors and brokers for the purchase of Series C preferred stock in connection with a private placement (the “Series C Warrants”). The Series C Warrants were subsequently extended and, upon closing of the reverse recapitalization transaction with Ritter, exchanged for warrants to purchase common stock of the Company. On February 27, 2024, these Series C Warrants were repriced as a result of a down-round provision triggered by a Securities Purchase Agreement with Alpha for the purchase of the February 2024 Debentures described below, from an exercise price of $36.50 per share to an exercise price of $13.00 per share, with 16,473 additional ratchet Series C Warrants issued, resulting in 25,586 Series C Warrants outstanding on March 31, 2024, which expired on June 26, 2024, resulting in a gain recorded in the amount of $187,900 . At December 31, 2025 and December 31, 2024 the fair value of these warrants was $0.

On November 20, 2024, the Company closed its private placement transaction resulting in the issuance of newly designated Series A-2 Preferred Stock (see Note 15 – Stockholders Equity). As a result of the issuance of a new class of voting securities, the Company evaluated its equity classified warrants’ respective terms, and concluded that warrants for 68,712 common shares with a weighted average exercise price of $2.00 were required to be reclassified to liabilities, including pre-funded warrants with an exercise price of $0.05 per share. The pre-funded warrants are exercisable upon issuance and will remain exercisable until all the pre-funded warrants are exercised in full. At December 31, 2025, pre-funded warrants for 51,199 common shares remained outstanding. During the years ended December 31, 2025 and 2024 the Company recorded a loss on change in fair value of warrant liabilities of approximately $127,000  and $22,000, respectively for these warrants. At December 31, 2025 and December 31, 2024, the fair value of these warrants was approximately $142,000 and $269,000, respectively.

The following table summarizes the activity in liability classified warrants for the year ended December 31, 2025:

 SCHEDULE OF WARRANTS ACTIVITY

The following table summarizes the activity in liability classified warrants for the year ended December 31, 2024:

The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of December 31, 2025:

 SCHEDULE OF FAIR VALUE OF HIERARCHY FOR WARRANT LIABILITIES

The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of December 31, 2024:

During the year ended December 31, 2024, warrants for 71,026 common shares with a weighted average exercise price of $2.14 and a fair value of $262,259 were reclassified from equity to liabilities, and warrants for 38,315 common shares with a weighted average exercise price of $6.50 and a fair value of $197,456 were reclassified from liabilities to equity. There were no transfers of financial assets or liabilities between category levels for the year ended December 31, 2024.

The value of the warrant liabilities was based on valuations internally generated Black Scholes valuations. Due to the nominal exercise price of the 2024 Pre-Funded Warrants and indefinite term, the Company calculated an implied value of the 2024 Pre-Funded Warrants based on the underlying common stock price on the valuation date, less the exercise price. For volatility, the Company considers comparable public companies as a basis for its expected volatility to calculate the fair value of common stock warrants and transitions to its own volatility as the Company develops sufficient appropriate history as a public company. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected term of the common stock warrant. The Company uses an expected dividend yield of zero based on the fact that the Company has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future. Any significant changes in the inputs may result in significantly higher or lower fair value measurements.

The following are the weighted average and the range of assumptions used in estimating the fair value of warrant liabilities (weighted average calculated based on the number of outstanding warrants on each issuance) as of December 31, 2025 and 2024:

 SCHEDULE OF ASSUMPTIONS OF WARRANT LIABILITIES