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STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY

Note 8 - STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY

 

Equity Transactions

 

For the three months ended March 31, 2026, we did not have any sales transaction for Common Stock under our registration statement on Form S-3 that was declared effective on July 7, 2025.

 

For the three months ended March 31, 2025, we sold 3,809,519 shares of our Common Stock for proceeds of $1,719,556 (net of $62,465 of offering costs) under our registration statement on Form S-3 that was declared effective on June 27, 2022.

 

Series A Preferred Stock

 

On August 4, 2025, we entered into the Exchange Agreements with Hensley & Company, an entity affiliated with Andrew K. McCain, a director of our company, and JC Associates, Inc. (the “Exchange Agreements”). Pursuant to the Exchange Agreements, the holders exchanged certain outstanding convertible notes, as amended from time to time, with aggregate principal and accrued interest of approximately $9,297,894 for an aggregate of 9,297,894 newly authorized shares of Series A Preferred Stock. Upon the closing of the transactions contemplated by the Exchange Agreements, the Exchange Notes were cancelled, and the holders relinquished all rights, powers, privileges, remedies, or interest under such securities. The Series A Preferred Stock was entitled to cumulative dividends at a rate of 10% per annum, accruing daily and compounding quarterly, whether or not declared by the Board of Directors, based on the original issuance price plus any previously accrued and unpaid dividends.

 

On November 6, 2025, Hensley and JC Associates converted all 9,297,894 outstanding shares of Series A Preferred Stock, together with $222,815 in accrued and unpaid dividends, into 9,520,709 shares of Common Stock.

 

 

Series B Preferred Stock

 

On September 24, 2025, we entered into the Purchase Agreement with B. Riley, pursuant to which we may sell up to $15.0 million of shares of our Series B Preferred Stock. Such sales of Series B Preferred Stock by us to B. Riley, if any, will be subject to certain limitations and conditions set forth in the Purchase Agreement, and may occur from time to time, at our sole discretion, over the 18-month period commencing September 24, 2025 and terminating on the earliest of (i) March 24, 2027 and (ii) the date on which B. Riley shall have made payment of the aggregate purchase price equal to $15.0 million. In no event may we issue or sell to B. Riley under the Purchase Agreement shares of our Series B Preferred Stock that are convertible into an aggregate number of shares of Common Stock exceeding a customary 9.99% beneficial ownership limitation.

 

During the year ended December 31, 2025, we issued 2,396 shares of Series B Preferred Stock to B. Riley pursuant to the Purchase Agreement for cash proceeds of $1,774,935 (net of $525,065 of offering costs). Such shares are classified as temporary equity in our company’s consolidated balance sheet, because they are redeemable upon the occurrence of an event that is not solely within the control of our company, and subsequent to issuance their carrying value is adjusted to redemption value. For the three months ended March 31, 2026, we recognized a $14,200 decrease to the carrying value of Series B Preferred Stock to measure it at its redemption value as of March 31, 2026 with a corresponding increase to additional paid-in capital. During the three months ended March 31, 2026, B. Riley converted 303 shares of Series B Preferred Stock into 641,700 shares of Common Stock. As of March 31, 2026, 1,778 shares of Series B Preferred Stock remained outstanding. Refer to Note 1 above regarding discussion about the April 1, 2026 conversion notice submitted by B. Riley regarding the remaining 1,778 shares of Series B Preferred Stock that are outstanding. Any additional future issuances of shares of Series B Preferred Stock to B. Riley pursuant to the Purchase Agreement are subject to certain conditions, including (i) the lowest daily VWAP for each of the five (5) consecutive trading days prior to the put notice date and (ii) the closing sale price on the trading day prior to the put notice date shall equal or exceed 150% of the minimum conversion price then in effect.

 

Warrants

 

The following table summarizes warrant activity for the three months ended March 31, 2026:

 

   Shares  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Life

(in years)

  

Aggregate

Intrinsic

Value

 
Outstanding at December 31, 2025   5,031,281   $1.18    3.92              - 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Expired or cancelled   -    -    -    - 
Outstanding at March 31, 2026   5,031,281   $1.18    3.68    - 
Exercisable at March 31, 2026   5,031,281   $1.18    3.68    -