Note 13. 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 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.

As of  March 31, 2026 and  December 31, 2025, the Company had no shares of Series X 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, 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 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 Topic 815. The estimated fair value of these embedded derivatives was deemed to be de minimis at issuance and at March 31, 2026.

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

On February 6, 2026, the Company entered into the Letter Agreement described in Note 12, Equity Offerings and agreed to reduce the conversion price of the Series B Convertible Preferred Stock to an alternative price of $1.78 per share. Pursuant to the Letter Agreement, the beneficial ownership limitation for the Series B Convertible Preferred Stock was increased from 4.99% to 9.99%, effective immediately, with the holders waiving any prior notice period requirements. The shares of common stock underlying the Series B Convertible Preferred Stock are subject to the same trading volume restriction provisions described in Note 12, Equity Offerings. In consideration for the reduction in conversion price and subsequent to the exercise of the Series L Warrants described, the holders agreed to convert their Series B Convertible Preferred Stock at the reduced conversion price such that the holders would collectively hold 9.99% of the outstanding shares of the Company’s common stock immediately after giving effect to such conversions and warrant exercises.

The amendment to the Series B Convertible Preferred Stock pursuant to the Letter Agreement was accounted for as an extinguishment. Upon extinguishment, the Company derecognized the original Series B Convertible Preferred Stock at its carrying amount, and recognized the amended Series B Convertible Preferred Stock at fair value. The resulting difference of $1.4 million was recorded as an adjustment to additional paid-in capital and recognized as a deemed dividend.

Series B Convertible Preferred Stock were converted as follows:

As of   March 31, 2026 and December 31, 2025, the Company had 1,632 and 2,229 shares of Series B Convertible Preferred Stock outstanding.

Series C-1 Convertible Preferred Stock

In February and March 2026, pursuant to the February 2026 Private Placement and the March 2026 Private Placement, the Company issued 1,617 shares and 1,853 shares, respectively, of its newly designated Series C-1 Convertible Preferred Stock. Each share of the Series C-1 Convertible Preferred Stock has a par value of $0.0001 and a stated value of $1,000.

Subject to certain limitations described below, the Series C-1 Convertible Preferred Stock is convertible into shares of the Company’s common stock at the option of the holder at an initial conversion price of $1.43 per share, subject to adjustment in certain circumstances as set forth in the Certificate of Designations. Following the date that the registration statement filed pursuant to the related registration rights agreement is first declared effective by the Securities and Exchange Commission (the “Effective Date”), the conversion price is reduced to the lower of (i) the conversion price in effect immediately prior to the Effective Date and (ii) 80% of the lower of (A) the official closing price of the Company’s common stock immediately prior to the applicable date of determination or (B) the five-day volume weighted average price of the Company’s common stock immediately prior to the applicable date of determination (the “Applicable Price”) on the Effective Date. Following the date stockholder approval is obtained under applicable exchange rules (the “Stockholder Approval Date”), the conversion price is further reduced to the lower of (i) the conversion price in effect immediately prior to the Stockholder Approval Date and (ii) 80% of the Applicable Price on the Stockholder Approval Date. In each case, the conversion price is subject to a floor price of $0.35, unless waived by the Company in its sole discretion. In the event of a stock dividend, reverse stock split, stock combination, reclassification or similar event affecting the Company’s common stock, the conversion price shall be adjusted based on the number of shares of common stock outstanding immediately before and after such event. The conversion of the Series C-1 Convertible Preferred Stock is also subject to stockholder approval and certain beneficial ownership limitations. Prior to the Stockholder Approval Date, the Series C-1 Convertible Preferred Stock may only be converted into shares of common stock up to the maximum amount permitted under applicable exchange rules.

Notwithstanding the foregoing, the holders of shares of Series C-1 Convertible Preferred Stock do not have the right to convert any portion of their Series C-1 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 C-1 Convertible Preferred Stock are entitled to receive dividends when and as declared by the Board of Directors, in its sole discretion, on the stated value of such shares. In addition, upon certain rights offerings or other distributions to holders of common stock, the holders of Series C-1 Convertible Preferred Stock are entitled to participate on an as-if-converted-to-common-stock basis, in each case subject to the Beneficial Ownership Limitation and applicable issuance limitations.

Upon any liquidation, dissolution or winding-up of the Company, the holders of Series C-1 Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution to holders of Junior Securities, an amount equal to the stated value of such shares, plus any accrued and unpaid dividends thereon, if any, and any other fees or liquidated damages then due and owing.

In the event of certain fundamental transactions, upon any subsequent conversion of the Series C-1 Convertible Preferred Stock, the holders will be entitled to receive, for each share of common stock that would otherwise have been issuable upon conversion immediately prior to such transaction, the same kind and amount of securities, cash or other property that would have been received by a holder of common stock, and the conversion price will be adjusted accordingly.

The Series C-1 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 March 31, 2026.

Except as otherwise required by law, and subject to certain protective provisions, the Series C-1 Convertible Preferred Stock do not have voting rights. As of March 31, 2026, the Company had 3,470 shares of Series C-1 Convertible Preferred Stock outstanding.

Series J Convertible Preferred Stock

On December 31, 2025, pursuant to the Exchange Agreement discussed in Note 9, 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  March 31, 2026, the Company had 9,490 shares of Series J Convertible Preferred Stock outstanding.