NOTE 11 – STOCKHOLDERS’ EQUITY

Common Stock

On March 14, 2025, the Company effectuated a 1-for-250 reverse stock split (the “2025 Reverse Split”). The Company’s stock began trading at the 2025 Reverse Split price effective on the Nasdaq Stock Market on March 17, 2025.

On March 14, 2025, Pearsanta effectuated a 1-for-60 reverse stock split (the “2025 Pearsanta Reverse Split”).  There was no change to the number of authorized shares of Pearsanta’s common stock. All share amounts referenced in this report are adjusted to reflect the 2025 Pearsanta Reverse Split.

On November 3, 2025, the Company effectuated a 1-for-113 reverse stock split (the “November 2025 Reverse Split”). The Company’s stock began trading on a split-adjusted basis effective on the Nasdaq Stock Market on November 3, 2025. There was no change to the number of authorized shares of the Company’s common stock. All share amounts referenced in this report are adjusted to reflect the November 2025 Reverse Split. 

On March 9, 2026, the Company effectuated a 1-for-8 reverse stock split (the “March 2026 Reverse Split”). The Company’s stock began trading on a split-adjusted basis effective on the Nasdaq Stock Market on March 9, 2026. There was no change to the number of authorized shares of the Company’s common stock. All share amounts referenced in this report are adjusted to reflect the March 2026 Reverse Split. 

On May 15, 2026, the Company effectuated a 1-for-27 reverse stock split (the “May 2026 Reverse Split”). The Company’s stock began trading on a split-adjusted basis effective on the Nasdaq Stock Market on May 18, 2026. There was no change to the number of authorized shares of the Company’s common stock. All share amounts referenced in this report are adjusted to reflect the May 2026 Reverse Split. 

At the Market Offering Agreement Amendment & Activity

On October 25, 2024, the Company entered into an amendment to the existing At The Market Offering Agreement (the “ATM”) with H.C. Wainwright & Co., LLC as agent (the “Agent”), pursuant to which the Company may offer and sell, from time to time through the Agent, shares of the Company’s common stock having an aggregate offering price of up to $35,000,000 (the “ATM Shares”).

For the three months ended March 31, 2026, the Company sold 1,857 shares at an average price of $341.21 per share under the ATM. The sale of Shares generated net proceeds of approximately $633,631 after paying fees and expenses.

For the three months ended March 31, 2025, the Company sold 8 shares at an average price of $572,782.79 per share under the ATM. The sale of Shares generated net proceeds of approximately $4,582,262 after paying fees and expenses.

On March 27, 2026, the Company increased the maximum aggregate offering price of the shares of the Company’s Common Stock issuable under the ATM with H.C. Wainwright & Co., dated October 25, 2024, by an additional $36,800,000 or up to $53,398,964, not including the approximately $21,257,000 of shares of common stock sold to date under the ATM, and filed a prospectus supplement.

ELOC Activity

On May 2, 2024, the Company entered into a Common Stock Purchase Agreement (the “ELOC Purchase Agreement”) with an equity line investor (the “ELOC Investor”), pursuant to which the ELOC Investor has agreed to purchase from the Company, at the Company’s direction from time to time, in its sole discretion, from and after the date effective date of the Registration Statement (as defined below) and until the termination of the ELOC Purchase Agreement in accordance with the terms thereof, shares of the Company’s common stock having a total maximum aggregate purchase price of $150,000,000 (the “ELOC Purchase Shares”), upon the terms and subject to the conditions and limitations set forth in the ELOC Purchase Agreement.

During the three months ended March 31, 2026, the Company sold 0 shares under the ELOC Purchase Agreement.

During the three months ended March 31, 2025, the Company sold 35 shares at an average price of $443,700.72 per share under the ELOC Purchase Agreement. The sale of shares generated net proceeds of approximately $15,529,525 after paying fees and expenses.

Preferred Stock

The Company is authorized to issue 3,000,000 shares of preferred stock, par value $0.001 per share. There were 62,762 and 27,752 shares of preferred stock outstanding as of March 31, 2026 and December 31, 2025, respectively.

All series of the Company’s convertible preferred stock include alternate conversion provisions. The Company’s convertible preferred stock also contains floor pricing provisions; the Company has the discretion to issue shares below the floor price.

Series A-1 Convertible Preferred Stock Redemptions

For the three months ended March 31, 2026, the Company redeemed approximately 322 shares of Series A-1 Convertible Preferred Stock for $369,996. As of the date of this report, the Company has an outstanding redemption payable of 356 shares Series A-1 Convertible Preferred Stock of $409,052.

Series A-1 Convertible Preferred Stock Conversions

For the three months ended March 31, 2026, the holders of the Series A-1 Convertible Preferred Stock converted approximately 668 shares of Series A-1 Convertible Preferred Stock for 20,250 shares of common stock.

Stock-Based Compensation

During the three months ended March 31, 2026 and 2025, the Company granted no new options.

The Company recognizes option forfeitures as they occur, as there is insufficient historical data to accurately determine future forfeitures rates.

The following is an analysis of the stock option grant activity under the Plan:

As of March 31, 2026, there were 55 exercisable options; these options had a weighted average exercise price $669,091,001,105.46.

On December 18, 2023, our Board of Directors adopted the Pearsanta, Inc. 2023 Omnibus Equity Incentive Plan (the “Pearsanta 2023 Plan”) and the 2023 Parent Service Provider Equity Incentive Plan (the “Pearsanta Parent 2023 Plan”), collectively (the “Pearsanta Plans”). The Pearsanta Plans provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock and restricted stock units, and other stock-based awards (collectively, the “Pearsanta Awards”). Eligible recipients of Pearsanta Awards include employees, directors or independent contractors of the Company or any affiliate of the Company. The Board of Directors administers the Pearsanta Plans. The Pearsanta 2023 Plan consists of a total of 250,000 shares of Pearsanta common stock, par value $0.001 per share, which may be issued pursuant to Pearsanta Awards granted under the Pearsanta 2023 Plan. The Pearsanta Parent 2023 Plan consists of a total of 155,334 shares of Pearsanta common stock, par value $0.001 per share, which may be issued pursuant to Pearsanta Awards granted under the Pearsanta Parent 2023 Plan. The exercise price per share for the shares to be issued pursuant to an exercise of a stock option will be no less than one hundred percent (100%) of the Fair Market Value (as defined in the Pearsanta Plans) of a share of Common Stock on the date of grant.

During the three months ended March 31, 2026 and 2025, Pearsanta granted no new options under the Pearsanta 2023 Plan.

The following is an analysis of the stock option grant activity under the Pearsanta Plans:

As of March 31, 2026, there were 181,227 exercisable options; these options had a weighted average exercise price $1.19.

The Company recognized stock-based compensation expense related to all options granted and vesting expense of $0 during the three months ended March 31, 2026. The remaining value to be expensed is $0 as of March 31, 2026. The weighted average vesting term is 0 years as of March 31, 2026.

The Company recognized stock-based compensation expense related to all options granted and vesting expense of $0 during the three months ended March 31, 2026.

Warrants

A summary of warrant issuances are as follows:

The Company recognized stock-based compensation expense related to all options granted and vesting expense of $0 during the three months ended March 31, 2026. The remaining value to be expensed is $0 as of March 31, 2026. The weighted average vesting term is 0 years as of March 31, 2026.

Warrant Reprice

The August Exchange Agreement, July 2024 Senior Notes, May PIPE, and May PIPE Placement Agent Warrants, (collectively, the “Repriced Outstanding Warrants”) contain full-ratchet anti-dilution provisions whereby the exercise price is adjusted downward in the event the Company issues equity securities at an effective price lower than the warrants’ then-current exercise price. In certain circumstances, the provisions may also require the issuance of additional warrants and/or additional shares underlying the warrants. Following stockholder approval at the reconvened Special Meeting of Stockholders on February 13, 2026, these provisions became effective. During the period, the Company effectuated conversions of Preferred A-1 with conversion prices below the exercise prices of certain outstanding warrants, which triggered downward repricing adjustments under the warrant agreements. Accordingly, the affected warrants were remeasured at fair value and classified as derivative liabilities.

For the three months ended March 31, 2026, pursuant to the warrant agreements repriced certain of the Company’s warrants originally issued with the Repriced Outstanding Warrants, pursuant to which the Company adjusted the exercise price of the Repriced Outstanding Warrants to lower the exercise price of the Outstanding Warrants to $18.63 per share. A total of 20 warrants were repriced. The reprice of the warrants also resulted in an increase in the amount of shares of common stock issuable upon exercise of such warrants of 698,798 shares. In connection with the warrant reprices, warrants were reclassed to be a derivative liability in the amount of $17,136,777.

The August Exchange Agreement warrants were repriced to $18.63 and the number of shares issuable upon exercise of such warrants was increased by 205,477 shares as a result of the reprice provisions.

The July 2024 Senior Notes warrants were repriced to $18.63 and the number of shares issuable upon exercise of such warrants was increased by 248,568 shares as a result of the reprice provisions.

The May PIPE and May PIPE Placement Agent Warrants were repriced to $18.63 and the number of shares issuable upon exercise of such warrants was increased by 244,753 shares as a result of the reprice provisions.

During the three months ended March 31, 2026, the Company recognized a change in fair value on the warrants of approximately $3,400,000.

For the three months ended March 31, 2026, the fair value of each warrant granted was estimated using the assumption and/or factors in the Black-Scholes Model as follows:

The risk-free interest rate assumption for warrants granted is based upon observed interest rates on the United States Government Bond Equivalent Yield appropriate for the expected term of warrants.

The Company determined the expected volatility assumption for warrants granted using the historical volatility of comparable public companies’ common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future warrant grants, until such time that the Company’s common stock has enough market history to use historical volatility.

The dividend yield assumption for warrants granted is based on the Company’s history and expectation of dividend payouts. The Company has never declared nor paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.

The Company recognizes warrant forfeitures as they occur, as there is insufficient historical data to accurately determine future forfeitures rates.