v3.26.1
Preferred Stock and Private Placement Offering of Common Stock
3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
Preferred Stock and Private Placement Offering of Common Stock

Note 8. Preferred Stock and Private Placement Offering of Common Stock

 

Issuance of Common Stock and Warrants in a Private Placement Offering

 

On December 26, 2025, the Company accepted subscription agreements from two accredited investors for the purchase of $499,998 of the Company’s common stock and warrants in a private placement offering. Pursuant to the subscription agreements, the Company issued an aggregate of 1,666,663 shares of common stock, par value $0.0001 per share, at a purchase price of $0.30 per share, together with an aggregate of 416,666 warrants to purchase shares of common stock. Each warrant is exercisable at an exercise price of $0.60 per share and expires on December 31, 2030.

 

Issuance of Series A Preferred Stock

 

The shares of Series A Preferred Stock have a stated value of $0.25 per share and are initially convertible into shares of common stock at a price of $0.05 per share (subject to adjustment upon the occurrence of certain events). The Series A Preferred Stock does not accrue dividends and ranks prior to the common stock upon a liquidation of the Company. The Series A Preferred Stock votes on all matters brought before the shareholders together with the common stock as a single class and each share of Series A Preferred Stock has a number of votes, initially 5, equal to the number of shares of common stock into which it is convertible as of the record date for any vote.

 

Issuance of Series A-2 Preferred Stock

 

The shares of Series A-2 Preferred Stock have a stated value of $0.16 per share and are convertible into shares of common stock at a price of $0.16 per share (subject to adjustment upon the occurrence of certain events). The rights of holders of the Company’s common stock with respect to the payment of dividends and upon liquidation are junior in right of payment to holders of the Series A-2 Convertible Preferred Shares. The rights of the holders of the Company’s Series A-2 Preferred Shares are pari passu to the rights of the holders of the Company’s Series A Preferred Shares currently outstanding.

 

Holders of the Series A-2 Convertible Preferred Stock will vote on an as converted basis with the holders of the Company’s common stock and Series A Preferred Stock as to all matters to be voted on by the holders of the common stock. Each Series A-2 Preferred Share shall be entitled to a number of votes equal to five times the number of shares of common stock into which it is then convertible on the applicable record date.

 

Holders of the Series A-2 Convertible Preferred Stock are entitled to receive cumulative dividends at an annual rate of 7% and payable annually in cash or shares of common stock at the election of the Company in accordance with the Series A-2 Convertible Stock agreement. As of December 31, 2025, the holders of the Series A-2 Preferred Stock had received 94,339 shares of common stock in satisfaction of dividends accrued through December 31, 2025.