Note 12. Preferred Stock

Series X Convertible Preferred Stock

Pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and Convertible Promissory Notes, representing an aggregate principal balance of $25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Series X Convertible Preferred Stock has no voting rights prior to the conversion into common stock. While there are generally no voting rights of the Series X Convertible Preferred Stock, there are protective rights regarding the sales of the Company, change of control, etc. The remaining Series X Preferred Stock may convert into common stock only if the Company’s common stock has been delisted from the NYSE American or has been approved for initial listing on the NYSE American or another stock exchange, at a rate of approximately 5.26 shares of common stock for each share of Series X Convertible Preferred Stock.

Other than dividends payable in shares of common stock, Holders of Series X Convertible Preferred Stock will be entitled to receive dividends on shares of Series X Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of common stock.

Upon consummation of the Merger, each holder of Old Catheter Convertible Promissory Notes received, in exchange for discharge of the principal of their Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $608 of principal amount.

All of the Series X Convertible Preferred Stock were converted as follows:

As of  December 31, 2025 and December 31, 2024, the Company had 0 and 12,656 shares of Series X Convertible Preferred Stock outstanding, respectively. 

Series A Convertible Preferred Stock

On January 9, 2023, the Company entered into a Securities Purchase Agreement for a Private Placement with the Investor. Pursuant to the Securities Purchase Agreement, shares of Series A Convertible Preferred Stock were issued, the conversion of which was approved at the Stockholders’ Meeting. After the final conversion on July 23, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

The Series A Convertible Preferred Stock converted into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price was subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock did not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of Series A Convertible Preferred Stock were entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the Series A Convertible Preferred Stock did not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register for resale the shares of common stock issuable upon the conversion of the Series A Convertible Preferred Stock. Those shares of common stock were registered for resale on an effective registration statement on Form S-1.

All of the Series A Convertible Preferred Stock were converted as follows:

Each share of Series A Convertible Preferred Stock was convertible into approximately 3.29 shares of common stock. The common stock was issued pursuant to the exemption contained in Section 3(a)(9) of the Securities Act of 1933, as amended (the “Act”), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. The shares issued have been registered for resale on an effective registration statement on Form S-1.

As of December 31, 2025 and December 31, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

Series B Convertible Preferred Stock

On May 12, 2025, pursuant to the May 2025 PIPE Financing, the Company issued 3,000 shares of Series B Convertible Preferred Stock. Each share of the Series B Convertible Preferred Stock has a par value of $0.0001 and a stated value of $1,000.

Subject to certain ownership limitations as described below, the Series B Convertible Preferred Stock was convertible into an aggregate of 451,126 shares of common stock at the option of the holder. The Series B Convertible Preferred Stock are convertible at a fixed conversion rate determined by dividing the stated value of the Series B Convertible Preferred Stock by the conversion price of $6.65, which approximates 150.38 shares of common stock issuable per share of Series B Convertible Preferred Stock. In the event of a stock dividend, reverse stock split, combination, or reclassification of shares of common stock, the conversion price shall be adjusted based on the number of shares of common stock outstanding immediately before and after such an event. 

The holders could convert all of the Series B Convertible Preferred Stock upon the date stockholder approval was obtained (“Stockholder Approval”). Stockholder Approval was obtained on July 25, 2025.  Prior to Stockholder Approval, the Series B Convertible Stock could only be converted into up to 115,913 shares of common stock (19.99% of the Company’s outstanding common stock on the date of issuance of the Series B Convertible Preferred Stock). Notwithstanding the foregoing, the holders of shares of Series B Convertible Preferred Stock do not have the right to convert any portion of their Series B Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own a number of shares of common stock in excess of 4.99% of the shares of common stock then outstanding (the “Beneficial Ownership Limitation”). At the holder’s option, the holder  may increase the Beneficial Ownership Limitation to 9.99% of the shares of common stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

Holders of Series B Convertible Preferred Stock are entitled to receive dividends and distributions on shares of Series B Convertible Preferred Stock equal to, on an as-if-converted-to-common stock basis, and in the same form as dividends and distributions actually paid on shares of common stock. 

The Series B Convertible Preferred Stockholders do not have a preference upon any liquidation, dissolution, or winding-up of the Company. In the event of certain restructuring or disposal events, then upon any subsequent conversion of the Series B Convertible Preferred Stock, for each convertible share that would have been issuable upon conversion immediately prior to the event, the holders shall receive the number of shares of common stock of the successor entity and any alternate consideration given to common stockholders. The conversion price shall be adjusted to apply to such alternate consideration based on the amount of alternate consideration issuable for one share of common stock. If holders of common stock are given any choice as to the securities, cash, or property received for alternate consideration, the holders of Series B Convertible Preferred Stock shall be given the same choice. 

The Series B Convertible Preferred Stock includes certain contingent payment provisions that should be bifurcated and accounted for as a derivative under ASC 815. The estimated fair value of these embedded derivatives was deemed to be de minimis at issuance and at December 31, 2025.

Except as otherwise required by law, the Series B Convertible Preferred Stock do not have any voting rights. 

Series B Convertible Preferred Stock were converted as follows:

As of   December 31, 2025, the Company had 2,229 shares of Series B Convertible Preferred Stock outstanding.

Series J Convertible Preferred Stock

On December 31, 2025, pursuant to the Exchange Agreement discussed in Note 8, Royalties Payable, the Company issued 9,490 shares of the Company’s newly designated Series J Convertible Preferred Stock, which has a par value of $0.0001 per share and a stated value of $1,000 per share.

Subject to certain limitations described below, the Series J Convertible Preferred Stock is convertible into an aggregate of 6,083,005 shares of common stock at the option of the holder. The Series J Convertible Preferred Stock are convertible at a fixed conversion rate determined by dividing the stated value of the Series J Convertible Preferred Stock by the conversion price of $1.56, which approximates 641.03 shares of common stock issuable per share of Series J Convertible Preferred Stock. In the event of a stock dividend, reverse stock split, combination, or reclassification of shares of common stock, then, the conversion price shall be adjusted based on the number of shares of common stock outstanding immediately before and after such an event. The Company recognized the fair value of the Series J Convertible Preferred Stock of $5.3 million in additional paid-in capital in the consolidated balance sheets.

The conversion of the Series J Convertible Preferred Stock is subject to stockholder approval and Beneficial Ownership Limitations. The holders do not have the right to convert any portion of their Series J Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own a number of shares of common stock in excess of 4.99% of the shares of common stock then outstanding (“Beneficial Ownership Limitation”). At the holder’s option, the holder  may increase the Beneficial Ownership Limitation to 9.99% of the shares of common stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

Holders of Series J Convertible Preferred Stock are entitled to receive dividends and distributions on shares of Series J Convertible Preferred Stock equal to, on an as-if-converted-to-common stock basis, and in the same form as dividends and distributions actually paid on shares of common stock. The holders also have the right to receive dividends when and as declared by the Board of Directors. No dividends have been granted to the Series J Convertible Preferred Stockholders.

The Series J Convertible Preferred Stockholders do not have a preference upon any liquidation, dissolution, or winding-up of the Company. In the event of certain restructuring or disposal events, then upon any subsequent conversion of the Series J Convertible Preferred Stock, for each convertible share that would have been issuable upon conversion immediately prior to the event, the holders shall receive the number of shares of common stock of the successor entity and any alternate consideration given to common stockholders. The conversion price shall be adjusted to apply to such alternate consideration based on the amount of alternate consideration issuable for one share of common stock. If holders of common stock are given any choice as to the securities, cash, or property received for alternate consideration, the holders of Series J Convertible Preferred Stock shall be given the same choice. 

Except as otherwise required by law, the Series J Convertible Preferred Stock do not have any voting rights.

As of   December 31, 2025, the Company had 9,490 shares of Series J Convertible Preferred Stock outstanding.