NOTE 19 – EQUITY

Class A Common Stock and Class B Common Stock

The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. The holders of Class A common stock and Class B common stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, the holders of Class A common stock and Class B common stock have identical and equal priority rights per share in liquidation. The Class A common stock and Class B common stock do not have any other contractual participation rights. The holders of Class A common stock are entitled to three votes per share and the holders of Class B common stock are entitled to one-tenth of a vote per share. Each share of Class A common stock may be converted into one share of Class B common stock, at any time, at the option of the holder. Shares of Class A common stock are subject to certain limitations on transferability that do not apply to shares of Class B common stock.

Equity Incentive Plans

In March 2018, the Company established its 2018 Equity Incentive Plan. On January 19, 2022, the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). The 2018 Equity Incentive Plan was suspended and replaced by the 2021 Plan and, following January 19, 2022, no new grants are to be awarded under the 2018 Equity Incentive Plan. Existing grants under the 2018 Equity Incentive Plan were not be impacted by the adoption of the 2021 Plan. Any of the Company’s employees, directors, consultants and other service providers, and those of the Company’s affiliates, are eligible to participate in the 2021 Plan. In accordance with applicable tax rules, only employees (and the employees of parent or subsidiary corporations) are eligible to be granted incentive stock options. The 2021 Plan authorizes stock options (both incentive stock options or non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units and cash or other stock-based awards. On January 19, 2022, the Company filed a Registration Statement on Form S-8 registering 1,919,025 shares of Class B common stock reserved for issuance under the 2021 Plan. On November 28, 2022, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 696,770, which the stockholders approved on January 23, 2023. On January 9, 2025, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 750,000, which the stockholders approved on January 13, 2025.

On January 8, 2026, the Company’s Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 1,000,000, which the stockholders approved on January 12, 2026. The maximum number of shares of Class B common stock that may be issued under the 2021 Plan is 4,365,795 shares. As of April 30, 2026, there were 697,203 shares still available for issuance under the 2021 Plan.

Stock Options

A summary of stock option activity for the Company is as follows:

At April 30, 2026, there were unrecognized compensation costs related to non-vested stock options granted under the 2021 Plan of $498 thousand, which are expected to be recognized over the next 2.9 years.

The determination of the fair value of options granted during the nine months ended April 30, 2026 used the following assumptions and key inputs:

The weighted average fair value per share of stock options granted for the nine months ended April 30, 2026 was $1.02.

Rafael Medical Devices Stock Options

The Rafael Medical Devices 2022 Equity Incentive Plan (the “RMD 2022 Plan”) was created and adopted by Rafael Medical Devices in May 2022. The RMD 2022 Plan allowed for the issuance of up to 10,000 shares of Rafael Medical Devices, Inc. Class B common stock which were to be awarded in the form of incentive stock options or restricted shares.

In connection with the conversion of Rafael Medical Devices from a Delaware corporation to a Delaware limited liability company, Rafael Medical Devices adopted the Rafael Medical Devices, LLC 2023 Equity Incentive Plan (the “RMD 2023 Plan”) in August 2023. The RMD 2023 Plan allows for issuance of up to 46,125 Class A Units of Rafael Medical Devices. There were 16,872 Units available for issuance under the RMD 2023 Plan as of April 30, 2026.

Rafael Medical Devices, LLC records compensation expense for stock-based awards based upon an assessment of the grant date fair value for options using the Black-Scholes model. The expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, characteristics from comparable companies are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The risk-free interest rate is determined by reference to the U.S. Treasury Constant Maturity Treasury rates with remaining maturities similar to the expected term of the options. Expected dividend yield is zero as Rafael Medical Devices, LLC has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.

A summary of option activity for Rafael Medical Devices, LLC is as follows:

At April 30, 2026, the total unrecognized compensation related to stock option awards granted under the RMD 2023 Plan was $78 thousand, which the Company expects to recognize over a weighted average period of approximately 1.3 years.

Cornerstone Stock Options

Cornerstone has outstanding stock options and non-qualified options to purchase Cornerstone’s common stock which were granted under Cornerstone’s 2009 and 2018 Stock Incentive Plans (the “Cornerstone Plans”), as well as additional options issued during a prior capital raise.

At April 30, 2026, there were 1,004,341 options outstanding granted under the Cornerstone Plans that are vested with a weighted average exercise price of $24.17 per share and a weighted average remaining contractual term of 3.4 years. The fair value of outstanding options granted under the Cornerstone Plans assumed during the Cornerstone Acquisition were determined to be de minimis.

In connection with Cornerstone’s 2003 common stock offerings, Cornerstone entered into an option agreement with an individual in connection with identifying investors. The option agreement grants the right to purchase an option (a “Purchase Option”) to purchase 472,000 Class A Options (“Class A Options”), which allows the purchase of 0.25 shares of common stock for each Class A Option at $11.00 per share. In order to secure this Class A Option, a Purchase Option must initially be purchased for $.005 per potential share of Class A options. Upon exercise of each Class A Option, a right is granted to one Class B Option (“Class B Options”), which allow the purchase of 0.25 shares of common stock for each Class B Option at $12.50 per share. The expiration date of the Class A Options is the later of October 29, 2005 or six months from the date the Company’s shares become publicly traded. The Class B Options expire 180 days from the exercise of the Class A Options. In 2003, 625,000 options (the “Cornerstone Common Options”) were granted with an exercise price of $11.00 per share to a 2003 investor. These Cornerstone Common Options are set to expire 180 days following the closing of an IPO, or from the date Cornerstone’s shares become publicly traded. The fair value of the Class A Options, Class B Options and Cornerstone Common Options assumed during the Cornerstone Acquisition were determined to be de minimis.

As part of the Cornerstone Restructuring, Cornerstone increased the available reserve of Cornerstone Common Stock for grant to employees, consultants and other service providers to approximately 10% of Cornerstone’s capital stock following the Cornerstone Restructuring, the Mandatory Common Conversion and the Reverse Stock Split (the “Reserve Increase”) but prior to the issuance of the RPF 6% Top Up Shares or any shares to the holders of the Remaining Series C Convertible Notes after the Closing.

Replacement Warrants

As part of the Merger with Cyclo, all outstanding warrants to purchase Cyclo Common Stock (other than those held by Rafael, which were cancelled, and those which were settled in cash) were automatically converted into warrants to purchase 1,087,100 shares of Rafael Class B common stock, at an adjusted exercise price per share based upon the Exchange Ratio.

The following table presents the number of common stock warrants outstanding:

The following table presents the number of common stock warrants outstanding, their exercise price and expiration dates as of April 30, 2026 (the names below refer to the related Cyclo transaction prior to the Merger):

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three to four years of service.

On January 6, 2025, the Company issued 84,918 shares of Class B restricted stock to the independent non-employee members of its Board of Directors.

On January 13, 2025, the Company issued 270,000 shares of Class B restricted stock to employees of, and consultants to, the Company.

On June 13, 2025, the Company issued 118,596 shares of Class B restricted stock to Howard S. Jonas.

On September 2, 2025, the Company issued 99,429 shares of Class B restricted stock to John Goldberg, former Chief Medical Officer of, and currently a consultant to the Company.

On January 13, 2026, the Company issued 220,000 shares of Class B restricted stock to employees of, and consultants to, the Company.

On January 28, 2026, the Company issued 154,200 shares of Class B restricted stock to independent non-employee members of its Board of Directors.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

At April 30, 2026, there was $527 thousand of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 2.9 years.

A summary of the stock-based compensation expense for the Company’s equity incentive plans is presented below (in thousands):