Note 11 — Series X Preferred Stock Subject to Redemption

Redemption Agreement

In connection with the Purchase Agreement, on November 12, 2025, the Company and Mr. La Rosa entered into a redemption agreement (“Redemption Agreement”), pursuant to which, on the Initial Closing Date, the Company will redeem and immediately cancel and return to the status of “blank check” preferred stock of the Company, a number of Mr. La Rosa’s shares of Series X Preferred Stock such that, immediately after such redemption, he will own shares of Series X Preferred Stock representing not less than 80% of the total voting power of the Company for a redemption price of $2,000,000 which is recognized as a deemed dividend on the statement of operations payable on the Initial Closing Date, and $500,000 contingently payable upon the satisfaction by the Company of its SEC filing requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for four consecutive quarters and certain other four-quarter requirements set forth therein. Mr. La Rosa’s remaining shares of Series X Preferred Stock will be redeemed by the Company at a subsequent time determined by the Board or otherwise as set forth in the Redemption Agreement as described below, in each case for no additional consideration. These redemptions of the Series X Preferred Stock are conditioned upon stockholders’ approval and effectiveness of the Certificate of Amendment (as defined below). 

The parties also agreed that in the event that the Company receives any notice from a prospective investor (including the Investors) that such prospective investor would provide, or commit to provide, equity or debt financing to the Company but for the existence of any then outstanding shares of Series X Preferred Stock, the Company will, within twenty-four (24) hours following receipt of such notice, redeem all remaining issued and outstanding shares of Series X Preferred Stock for no additional consideration.

In addition, under the Redemption Agreement, Mr. La Rosa agreed, subject to certain customary exceptions, not to sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any of his shares of the Series X Preferred Stock during the term of the Redemption Agreement, without the consent of the Lead Buyer.

On December 22, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation, pursuant to which effective as of December 26, 2026 the shares of the Series X Preferred Stock may be redeemed from time to time and at any time in whole or in part upon such terms and conditions as may be approved by the Board of Directors and agreed to by the holder(s) thereof. As a result, the Company reassessed the classification of the Series X Preferred Stock after the modification, in relation to the potential redeemability of the shares and the permanent equity versus temporary equity classification and determined the Series X Preferred Stock should be reclassified to temporary equity as of the effective date of the amendment.