4.  Debt and Equity: Conversion of Convertible Note

On June 20, 2025, the Company issued a $3,000 convertible note to First Finance Ltd. The note accrued interest at 10% per annum and was mandatorily convertible into shares of newly designated Class B Convertible Preferred Stock upon the issuance of Class A Redeemable Preferred Stock (which occurred on July 18, 2025).

On July 21, 2025, the convertible note (together with accrued interest) automatically converted into 3,026 shares of Class B Convertible Preferred Stock. The conversion was recognized in equity with no gain or loss. The conversion ratio was fixed at issuance and qualified for the ASC 815-40 own-equity scope exception.

As of March 31, 2026, there is no outstanding convertible note liability. All Class B Convertible Preferred Stock has been converted or redeemed (see Note 11 – Shareholders’ Equity).

This conversion was a non-cash financing activity and is disclosed in the supplemental cash flow information (in the nine months ended September 30, 2025).