Note 9  — Stockholders’ Equity

Series B Preferred Stock

As of March 31, 2026, the Company had 1,620 shares of Series B Convertible Preferred Stock ("Series B Preferred Stock") issued and outstanding. The Series B Preferred Stock is classified within permanent equity and recorded in the accompanying condensed consolidated balance sheets at its carrying value.

Convertible preferred stock consisted of the following as of March 31, 2026:

The holders of the Series B Preferred Stock have the following rights and preferences:

Voting Rights

Holders of the Series B Preferred Stock have no voting rights, except as provided in the Certificate of Designation or as otherwise required under applicable Nevada law.

Conversion Rights

Subject to the beneficial ownership limitations set forth in the Certificate of Designation, holders of the Series B Preferred Stock may convert the outstanding Conversion Amount into shares of the Company's common stock at the applicable Conversion Price. The Conversion Price is, at the option of the holder as adjusted: $1.176 per share, subject to adjustment of the issuance of preferred series C; or the Alternate Conversion Price, which is the greater of: the Floor Price of $0.196 per share (subject to adjustment for preferred series C); and 95% of the lowest volume weighted average price ("VWAP") of the Company's common stock during the seven consecutive trading day period ending on the trading day immediately preceding the delivery of the applicable conversion notice. If a holder elects to convert using the Alternate Conversion Price, the Conversion Amount is multiplied by: 105% if the conversion occurs in connection with a Change of Control; or 125% in all other circumstances.

No holder may convert shares to the extent that, after giving effect to the conversion, the holder and its affiliates would beneficially own more than 4.99% of the Company's outstanding common stock, which percentage may be increased to as much as 9.99% upon prior notice to the Company.

Down-Round Adjustment and Deemed Dividend

The Certificate of Designation contains anti-dilution provisions that require adjustment of the Series B Preferred Stock conversion price upon certain issuances of securities at prices below the then-effective conversion price. On March 4, 2026, the Company issued Series C Preferred Stock with a conversion price below the then-effective conversion price of the Series B Preferred Stock. Accordingly, pursuant to Section 8(a)(ii) of the Certificate of Designation, the conversion price of the Series B Preferred Stock was adjusted to $1.176 per share, equivalent to the stated conversion price of the Series C Preferred Stock.

The Company determined that the reduction in the conversion price provided additional value to the holders of the Series B Preferred Stock and therefore represented a deemed dividend. For the three months ended March 31, 2026, the Company recognized a deemed dividend of approximately $263,000 related to the down-round adjustment.

Because the Company had an accumulated deficit as of March 31, 2026, the deemed dividend was recorded within additional paid-in capital ("APIC"), resulting in no net impact on total stockholders' deficit. The deemed dividend is reflected as an adjustment to net loss available to common stockholders in the computation of basic and diluted net loss per share.

Alternate Conversion Floor Amount

Under the terms of the Certificate of Designation, certain Alternate Conversions may trigger a Conversion Floor Price Condition, requiring the Company either to increase the stated value of the remaining outstanding Series B Preferred Stock by the applicable Alternate Conversion Floor Amount or to pay such amount to the holder in cash. The Company accounts for any Alternate Conversion Floor Amount as a dividend to the holder of the Series B Preferred Stock, whether settled through an increase in the stated value of the preferred stock or through a cash payment.

On February 18, 2026, the holder elected to convert approximately $1.96 million of stated value of the Series B Preferred Stock pursuant to an Alternate Conversion. Because the Alternate Conversion Price was below the applicable Floor Price, a Conversion Floor Price Condition was triggered. The resulting Alternate Conversion Floor Amount was determined to be approximately $2.39 million.

The Company elected to satisfy this obligation by increasing the stated value of the remaining outstanding Series B Preferred Stock. Because the Series B Preferred Stock is classified within permanent equity, the increase in stated value was recorded within APIC. The corresponding deemed dividend of $2,394,580 resulting from the Alternate Conversion Floor Amount was also recorded within APIC. As a result, there was no net impact on total stockholders' deficit.

For the three months ended March 31, 2026, the Company recognized deemed dividends of approximately $2.39 million related to Alternate Conversion Floor Amounts. These deemed dividends are reflected as an adjustment to net loss available to common stockholders in the calculation of basic and diluted net loss per share.

Redemption

The Company may redeem all, but not less than all, of the outstanding Series B Preferred Stock at a redemption price equal to the greater of: The Conversion Amount being redeemed; or The value obtained by multiplying: the applicable Conversion Rate; by the highest Closing Sale Price of the Company's common stock during the period specified in the Certificate of Designation.

Dividends

The Series B Preferred Stock does not accrue or pay cash dividends. However, certain adjustments and Alternate Conversion provisions under the Certificate of Designation may result in deemed dividends that are recognized in accordance with applicable accounting guidance.

Liquidation Preference

Upon a liquidation event, holders of the Series B Preferred Stock are entitled to receive, prior to any distribution to holders of common stock and pari passu with any parity securities, an amount equal to the greater of: 125% of the Conversion Amount; or the amount the holder would have received had the Series B Preferred Stock been converted into common stock immediately prior to the liquidation event.

Series C Preferred Stock

On March 4, 2026, the Company and an institutional investor (the "Investor") entered into a Securities Purchase Agreement (the "SPA") pursuant to which the Company issued 100 shares of its Series C Convertible Preferred Stock, par value $0.0001 per share ("Series C Preferred Stock"), for aggregate gross proceeds of $100,000. On the same date, the Company filed a Certificate of Designation of Rights and Preferences of the Series C Preferred Stock (the "Certificate of Designation") with the Secretary of State of Nevada.

Pursuant to the terms of the Certificate of Designation, conversion of the Series C Preferred Stock into shares of the Company's common stock in excess of the limitations imposed by the rules and regulations of the Nasdaq Capital Market is conditional upon obtaining shareholder approval. Until such approval is obtained, conversion of the Series C Preferred Stock remains subject to the exchange cap provisions set forth in the Certificate of Designation.

In connection with the issuance of the Series C Preferred Stock, the Company incurred direct and incremental issuance costs of $10,000 consisting primarily of legal and professional fees, which reduced the carrying value of the Series C Preferred Stock.

Convertible preferred stock consisted of the following as of March 31, 2026:

Convertible Series C Preferred Stock is classified as permanent equity as a result of there being no redemption features solely within the control of the Company, accordingly this is recorded on the accompanying condensed consolidated balance sheet at its issuance date fair value.

The holders of the Series C Preferred Stock have the following rights and preferences:

Voting

Holders of shares of Series C Preferred Stock generally have no voting rights except as required by Nevada law and with respect to certain protective provisions contained in the Certificate of Designation. The consent of a majority of the outstanding Series C Preferred Stock is required before the Company may, among other things, amend its organizational documents in a manner that adversely affects the Series C Preferred Stock, increase or decrease the authorized number of Series C Preferred Stock, create or authorize any senior or pari passu securities, redeem junior securities, pay dividends on junior securities, issue additional Series C Preferred Stock or otherwise circumvent rights granted to holders of the Series C Preferred Stock.

Conversion Rights

Subject to the Maximum Percentage, holders of outstanding shares of Series C Preferred Stock are entitled to convert any portion of the outstanding and unpaid Conversion Amount thereof into shares of common stock at the Conversion Rate. For such purpose: (i) "Conversion Amount" means the stated value thereof (or $1,000 per share) and any other unpaid amounts owed to such holder under the Transaction Documents; (ii) "Conversion Rate" means the amount determined by dividing (x) such Conversion Amount by (y) the Conversion Price; (iii) "Conversion Price," as of any date of determination and subject to adjustment as provided therein, shall initially be $1.176 per share; and (iv) "Alternate Conversion Price" means the lowest of (a) the applicable Conversion Price in effect on the applicable Conversion Date and (b) the greater of (x) the Floor Price of $0.196 (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) 90% of the lowest volume weighted average price ("VWAP") of the Company's common stock during the ten consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice.

In the event a holder elects to convert the Series C Preferred Stock at the Alternate Conversion Price, the Conversion Amount shall be multiplied by (i) 105% if in connection with a Change of Control or (ii) 125% otherwise.

A holder of Series C Preferred Stock does not have the right to convert any portion of its shares to the extent that, following such conversion, the holder together with its affiliates would beneficially own in excess of 9.99% of the Company's outstanding common stock (the "Maximum Percentage"). The Maximum Percentage may be decreased or increased, not to exceed 9.99%, upon prior notice to the Company as provided in the Certificate of Designation.

Subject to certain exceptions outlined in the Certificate of Designation, including equity issuances under the Company's equity incentive plans and certain strategic acquisitions, if the Company issues common stock or securities convertible into, exercisable for, or exchangeable into common stock at an effective price per share below the then applicable Conversion Price, the Conversion Price of the Series C Preferred Stock shall be reduced to the effective price per share of such issuance.

Redemption

Under the Certificate of Designation, the Company has the right to redeem all, but not less than all, of the then outstanding shares of Series C Preferred Stock at a price equal to the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate applicable to the Conversion Amount being redeemed multiplied by (2) the greatest Closing Sale Price of the Company's common stock on any trading day during the period beginning on the trading day immediately preceding the Company's redemption notice and ending on the trading day immediately prior to the date of redemption payment.

Upon the occurrence of certain bankruptcy-related triggering events specified in the Certificate of Designation, the Company is required to redeem the outstanding Series C Preferred Stock for cash at the redemption price specified in the Certificate of Designation.

Dividends

The Series C Preferred Stock bears no dividends.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, the Series C Preferred Stock ranks junior to any Senior Preferred Stock, pari passu with any Parity Stock and senior to the Company's common stock and other Junior Stock with respect to the distribution of assets. Holders of the Series C Preferred Stock are entitled to receive distributions in accordance with the priorities established in the Certificate of Designation before any distribution is made to holders of Junior Stock.

Series X Preferred Stock Redemption

On January 8, 2026, pursuant to the Redemption Agreement entered into on November 12, 2025, the Company redeemed 200 shares of Series X Preferred Stock from Mr. La Rosa for aggregate consideration of $2,000,000. The Company paid $1,700,000 at closing and recorded a related-party payable of $300,000 which is included in accrued expenses on the condensed consolidated balance sheets as of March 31,2026 for the remaining non-contingent consideration. 

The Redemption Agreement also provides for an additional contingent payment of up to $500,000 upon the satisfaction of specified SEC reporting and listing compliance requirements for four consecutive fiscal quarters. As of March 31, 2026, such conditions had not been satisfied and no liability related to the contingent consideration had been recorded. The redeemed shares were immediately cancelled and returned to the status of authorized but unissued preferred stock.

Common Stock Issuances

For the three months ended March 31, 2026

On February 17, 2026, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 3,500 shares of the Company’s common stock for services rendered. The stock compensation expense for the three months ended March 31, 2026, related to this transaction amounted to $44,450.

For the three months ended  March 31, 2025

On January 17, 2025, the Company issued 50 shares of common stock as an exercise of a prefunded warrant which was part of the securities purchase agreement with an institutional accredited investor, Abri Advisors, Ltd., a corporation organized under the laws of Bermuda, agreed to on November 1, 2024.

On February 5, 2025, the Company issued the CEO an aggregate of 367 unregistered shares of common stock of the Company, par value $0.0001 per share (the “Shares”) as a compensation for the services rendered pursuant to his employment agreement with the Company. The Company issued the Shares to the CEO in reliance on exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), available to the Company under Section 4(a)(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities. The stock compensation expense for the three months ended  March 31, 2025, related to this transaction amounted to $1,160,381.

On February 20, 2025, the Company issued shares pursuant a consulting agreement entered into on January 1, 2025 in which the Company agreed to issue 215 shares of the Company’s common stock for services rendered. The stock compensation expense for the three months ended  March 31, 2025, related to this transaction amounted to $411,062.

On February 20 and 24, 2025, the Company entered into marketing agreements pursuant to which the Company agreed to issue 38 and 25 shares of the Company’s common stock, respectively, for services rendered. The stock compensation expense for the three months ended  March 31, 2025, related to this transaction amounted to $122,570.

On March 10, 2025, the Company issued 5 shares to team leaders pursuant to independent contractor agreements signed in 2024. The stock compensation expense for the three months ended  March 31, 2025, related to this transaction amounted to $8,036.

On March 10, 2025, the Company entered into a marketing agreement pursuant to which the Company agreed to issue 31 shares of the Company’s common stock for services rendered. The stock compensation expense for the three months ended March 31, 2025, related to this transaction amounted to $46,925.

For the three months ended  March 31, 2025, the holder of our Senior Secured promissory notes converted 282 shares of the Company’s common stock as part of their First warrants and principal and interest conversions.

For the three months ended  March 31, 2025, the Company utilized their ATM and sold a total of 931 shares of the Company’s common stock for gross proceeds of $3,023,563 and net proceeds of $2,919,192.

For the three months ended  March 31, 2025, the Company issued 2 shares of the Company’s common stock pursuant to the Restricted Stock Unit (RSU) vesting with a value of $19,454.

Stock Option Awards

For the three-month periods ended  March 31, 2026 and 2025, the Company recorded stock-based compensation for employees and directors awards of $14,066 and $143,904, respectively. The Company did not realize any tax benefits associated with share-based compensation for the three-month periods ended  March 31, 2026 and 2025, as the Company recorded a valuation allowance on all deferred tax assets.

At  March 31, 2026, options outstanding that have vested and are expected to vest are as follows:

Additional information with respect to stock option activity:

The weighted average fair value of stock options granted in the quarter ended  March 31, 2025 and the assumptions used in the Black-Scholes model are set forth in the table below.

As of  March 31, 2026, unrecognized compensation expense related to stock option awards totaled $28,415. As of  December 31, 2025, unrecognized compensation expense related to stock option awards totaled $75,126.

Restricted Stock Units

On February 1, 2025, a Restricted Stock Unit (“RSU”) (prior to subsequent reverse splits) covering 4,000 shares granted to the Company’s Chief Technology Officer (“CTO”) vested. The Company withheld 1,187 shares to cover payroll tax withholding and issued 2,813 shares to the executive. The Company also granted a new RSU to the CTO on February 1, 2025, with the right to vest on the first anniversary of the grant.

For the three-month periods ending  March 31, 2026 and 2025, the Company recorded $51,210 and $21,973, respectively, of share-based compensation expense related to the RSUs. The Company did not realize any tax benefits associated with share-based compensation for the three-month periods ended  March 31, 2026 and 2025, as the Company recorded a valuation allowance on all deferred tax assets.

Acquisition of Noncontrolling Interest 
 

On February 11, 2026, the Company acquired the remaining 49% noncontrolling interest in La Rosa Realty Lakeland LLC for consideration of $350,000, consisting of $150,000 in cash and a $200,000 promissory note. Because the Company retained its controlling financial interest in La Rosa Realty Lakeland LLC both before and after the transaction, the acquisition was accounted for as an equity transaction in accordance with ASC 810-10-45-23, Consolidation, Changes in a Parent's Ownership Interest While Retaining Control. The carrying value of the noncontrolling interest acquired exceeded the consideration transferred by approximately $592,902, which was recorded as an increase to additional paid-in capital. The transaction had no impact on consolidated net loss or earnings per share.