8. Stockholders’ Equity

The Company’s common stock and preferred stock consist of the following at March 31, 2026 and December 31, 2025. There was a 2-for-1 stock split of common and preferred shares on August 31, 2025. In addition, in connection with the Company’s IPO which closed on May 18, 2026, the Company effected a 3.57-for-1 stock split of the Company’s common stock on May 14, 2026, the effective date of the registration statement used in connection with the IPO. The impact of these stock splits have been retroactively applied to all periods presented within the accompanying condensed financial statements, including all earnings per share calculations.

 Schedule of Stockholders’ Equity

Common Stock

Preferred Stock

Prepaid Equity Issuance Costs

The Company has recorded $607,903 and $291,536 of costs incurred in connection with its IPO as a prepaid expense on the accompanying condensed balance sheets as of March 31, 2026 and December 31, 2025, respectively. Of these costs, $217,983 and $135,133 remains in accounts payable as of March 31, 2026 and December 31, 2025, respectively. These costs consist primarily of legal and professional fees that are directly attributable to the equity offering which was completed in May 2026.

In accordance with ASC 340-10, incremental costs directly associated with a planned equity offering are deferred and recorded as an asset when it is probable that the offering will occur. Upon completion of the IPO, these deferred costs were reclassified from prepaid expenses and recorded as a reduction of the gross proceeds received, reflected within additional paid-in capital (APIC) in stockholders’ equity. No amortization or expense is recognized during the deferral period.

Series A Preferred Stock Financing

In August 2025, the Company completed a Series A preferred stock financing, issuing 611,299 shares of Series A preferred stock, with a par value of $0.001 per share, at a price of $6.54627 per share, resulting in total gross proceeds of $4,001,728. Also, in connection with the Series A financing, the Company issued common stock warrants to Series A investors and to certain existing preferred stockholders. These warrants are exercisable for an aggregate of 893,393 shares of common stock at an exercise price of $0.003 per share. Because the Series A preferred shares were issued together with the Company’s Series A Warrants (as defined below) as part of a bundled financing arrangement, the Company allocated the total Series A proceeds between the preferred shares and the warrants using the relative fair value method. Based on this allocation approach, the Company assigned $3,396,563 of the Series A proceeds to the Series A preferred shares, with the remainder allocated to the equity-classified Series A Warrants.

In connection with the Series A financing, the Company effected a 2 for 1 forward stock split of its common stock and preferred stock on August 31, 2025. As a result of the stock split, each share of common and preferred stock outstanding at the time of the split was split into two shares, and the number of shares of common stock reserved for issuance under the Company’s equity incentive plan and upon the exercise or conversion of outstanding equity awards and other equity linked securities was proportionately increased.

In addition to the Series A financing discussed above, in November 2025, the Company completed a rebalancing of its common stock, whereby one individual surrendered 1,148,055 shares of common stock to the Company, at which time the Company immediately cancelled and retired the shares. The Company also issued 574,027 shares of common stock each to two stockholders (for total shares issued of 1,148,055) at a purchase price of $0.26 per share. Of each stockholder’s shares, 466,396 are considered fully vested at the time of grant, while the remaining shares vest evenly on a monthly basis following the date of grant with all shares becoming fully vested on July 15, 2026.

In connection with the transactions above, the Company also modified its Certificate of Incorporation during 2025 to increase its authorized common stock shares to 13,969,410 and its authorized preferred stock shares to 1,318,836, of which 516,298 shares are designated as Series Seed 1 shares, 115,038 shares are designated as Series Seed 2 shares, and 687,500 shares are designated as Series A shares. Additionally, the Company modified its 2022 Equity Incentive Plan, first increasing the common stock shares reserved under the plan to 2,447,046 but then subsequently decreasing it to 1,298,991 shares.

Holders of common stock are entitled to one vote per share and to receive dividends when and if declared by the Board of Directors, subject to the rights of any preferred stock then outstanding. No dividends had been declared or paid on common stock during the three month periods ended March 31, 2026 or 2025.

The preferred stock were convertible into common stock at the option of the holder at any time after issuance at an initial conversion ratio of one-for-one, subject to adjustment for stock dividends, stock splits, combinations and other recapitalizations and for certain dilutive issuances, as set forth in the Company’s Amended and Restated Certificate of Incorporation.

Each share of preferred stock was to automatically convert into common stock upon the closing of the sale of shares of the Company’s common stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act at a per share price of at least five times the Series Seed-1 original issue price and resulting in at least $50,000,000 of gross proceeds to the Company, in connection with which the common stock is listed for trading on a national securities exchange approved by the Board of Directors, including the preferred director. Preferred stock was to also automatically convert into common stock upon the date and time, or the occurrence of an event, specified by vote or written consent of the “Requisite Holders,” defined as the holders of at least 63 percent of the outstanding shares of Series Seed-1 preferred stock.

Holders of preferred stock were entitled to receive, out of any funds legally available therefor and only when, as and if declared by the Board of Directors, noncumulative dividends at the rate of 8 percent of the applicable original issue price per share, prior and in preference to any declaration or payment of any other dividends on shares of capital stock other than dividends on common stock payable solely in additional shares of common stock. In addition, if the Company declared or paid any dividends or other distributions on the common stock or on any class or series of stock that is convertible into common stock, the holders of preferred stock were entitled to receive an additional dividend or distribution on an as-converted basis, such that they would have received the same dividend or distribution they would have received if all shares of preferred stock had been converted into common stock.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a deemed liquidation event as defined in the Amended and Restated Certificate of Incorporation, the holders of preferred stock were entitled to receive, prior and in preference to any distribution to the holders of common stock, an amount per share equal to the greater of (i) one times the applicable original issue price per share plus any declared but unpaid dividends, or (ii) the amount that would have been payable with respect to such share if all shares of preferred stock were converted into common stock immediately prior to such event. If, upon such liquidation, dissolution, winding up or deemed liquidation event, the assets or proceeds available for distribution were insufficient to permit the full payment of such amounts, the available assets and proceeds would have been distributed among the holders of preferred stock on a pro rata basis in proportion to the full preferential amounts to which they were entitled. After payment in full of the amounts that would have been required to be distributed to the holders of preferred stock, the remaining assets of the Company, if any, would have been distributed among the holders of common stock on a pro rata basis. The preferred stock ranked senior to the common stock with respect to dividend rights and rights on liquidation. The liquidation value of Series Seed 1 preferred stock was $3,231,354 as of March 31, 2026 and December 31, 2025. The liquidation value of the Series Seed 2 was $599,992 as of March 31, 2026 and December 31, 2025. The liquidation value of the Series A preferred stock was $4,001,728 as of March 31, 2026 and December 31, 2025. Combined liquidation value of all preferred stock as of March 31, 2026 and December 31, 2025 was $7,833,074.

All classes of preferred stock voted together with the common stock on an as-converted basis and, so long as any preferred stock remained outstanding, had certain protective rights that required the written consent or affirmative vote of the Requisite Holders, voting as a separate class, for specified significant corporate actions. These actions included, among other things, (i) any liquidation, dissolution or winding up of the Company or any merger, consolidation or other deemed liquidation event, (ii) amending the Amended and Restated Certificate of Incorporation or bylaws in a manner that adversely affected the powers, preferences or rights of the preferred stock, (iii) creating, authorizing or issuing any new class or series of capital stock that was senior to or on parity with the preferred stock, or changing the authorized number of shares of common stock or preferred stock, (iv) declaring or paying dividends or making other distributions on, or purchasing or redeeming, shares of capital stock other than as expressly permitted, (v) adopting or materially amending equity compensation plans or issuing equity or equity-linked awards outside such plans without Board approval including the preferred director, (vi) incurring indebtedness for borrowed money above specified thresholds or granting certain liens, (vii) entering into certain related party transactions, and (viii) changing the authorized size of the Board of Directors or altering the director election structure.

Additional Paid-in Capital

Additional paid-in capital primarily reflects amounts received from founders and investors in excess of the par value of the Company’s common and preferred stock.

Warrants

Description of Warrants

In connection with the Company’s Series A financing completed in August 2025, the Company issued warrants to select stockholders to purchase an aggregate of 893,393 shares of common stock (the “Series A Warrants”). The Series A Warrants have an exercise price of $0.003 per share, are exercisable upon vesting (as described below), and expire ten years from the issuance date, unless earlier terminated pursuant to a change in control as defined in the warrant agreements. The Series A Warrants vest upon the earlier of: 1) the Company achieving a public market capitalization of at least $100 million, or 2) a determination by the Company’s Board of Directors that the Company’s enterprise value is at least $100 million.

All Series A Warrants were issued in connection with the Series A closing on August 31, 2025, which represents the common grant and measurement date for valuation purposes.

The Company evaluated the Series A Warrants under ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Management concluded that the Series A Warrants are: 1) indexed to the Company’s own stock, and 2) meet all conditions for equity classification, including that settlement is in a fixed number of shares and does not require cash settlement. Accordingly, the Series A Warrants are classified as equity and recorded within additional paid-in capital on the statement of stockholders’ equity. As equity-classified instruments, the Series A Warrants are not subsequently remeasured.

Because the Series A Warrants are equity-classified and were issued together with the Company’s Series A preferred stock in a bundled financing, the Company allocated a portion of the Series A proceeds to the Series A Warrants using the relative fair value method, with the offset recorded as a reduction to proceeds attributed to the Series A preferred stock. The fair value of the Series A Warrants was determined utilizing a backsolve option pricing model based on the Series A transaction price along with a Monte Carlo simulation which accounted for the Series A Warrants as market-conditioned awards based on the $100 million market capitalization or enterprise value vesting condition.

The grant-date fair value of the Series A Warrants was determined as follows:

As a result, a fair value of $605,165 was assigned to the Series A Warrants under the relative fair value method for purposes of allocating the total $4,001,728 Series A financing proceeds.

Warrant Activity

The following table summarizes warrant activity for the three months ended March 31, 2026:

 Summary of Warrant Activity

With the warrants being issued in connection with the Series A Financing in August 2025, there was no warrant activity for the three-month period ended March 31, 2025. All warrants outstanding at March 31, 2026 and December 31, 2025 were unexercised and unvested.

Significant Estimates and Judgments

The valuation of the Series A Warrants required the use of significant assumptions, including expected volatility, risk-free interest rate, and the probability of achieving the market-based vesting condition.

 Schedule Of Valuation Performed Using Assumptions

Key assumptions used in the valuation included: