The Company’s stockholders have authorized 80 million shares of stock, of which 5 million are authorized as preferred stock and 75 million as common stock.

On February 11, 2026, the Company completed an equity transaction with certain investors, pursuant to which the Company sold an aggregate of 1,269,509 shares of its Common Stock and pre-funded warrants to purchase an aggregate of 67,706 shares of Common Stock for gross proceeds of $1.15 million. The warrants can be converted to Common Stock at the option of the holder and there is no expiration date.

On April 7, 2026, the Company entered into securities exchange agreements in a private placement with the holders of the Company’s outstanding Senior Notes, pursuant to which an aggregate of $4.0 million of principal and $316 thousand of accrued and unpaid interest was exchanged for an aggregate of 236,367 shares of the Company’s Series A Convertible preferred stock, par value $0.01 per share (“Series A PS”). The transaction also included the issuance of 27,386 shares of Series A PS to a certain investor for gross proceeds of $500 thousand. The Series A PS issued in the transaction are convertible into up to 5,275,060 shares of the Company’s Common Stock at the option of the holders.

On June 25, 2026, the Company entered into securities purchase agreements with certain purchasers, pursuant to which the Company issued and sold 109,223 shares of the Company’s Series B Convertible Preferred Stock, par value $0.01 per share (“Series B PS) for gross proceeds of $2.25 million. The Series B PS are convertible into up to 2,184,460 shares of the Company’s Common Stock, at the option of the holders.

Preferred Stock

There are a total of 5,000,000 shares of preferred stock authorized, with 400,000 shares designated as Series A Convertible Preferred Stock and 200,000 shares designated as Series B Convertible Preferred Stock. The shares of both series of preferred stock rank senior to the Company’s Common Stock and have the additional characteristics set below.

Dividends – Dividends accrue on each share of preferred stock at the rate of 18.0% per annum on a quarterly basis in arrears, calculated on the liquidation value. Dividends are payable in cash when declared on a bi-annual schedule and the Company’s Board of Directors (“Board”) may permit dividends to accumulate rather than be paid out.

Conversion – Each share of preferred stock is convertible at any time at the holder’s election into shares of Common Stock based on the applicable conversion price, as adjusted, which conversion price is determined based on the liquidation value. In addition, subject to compliance with applicable exchange rules, the Board may elect to convert accrued and unpaid dividends into shares of Common Stock.

Liquidation Preference – Upon any liquidation, dissolution or winding up, preferred stockholders are entitled to receive, before any distribution to junior securities, at the holder’s election, either cash or non-cash consideration valued at fair market value as determined by the Board in good faith, in each case equal to the aggregate liquidation value plus all unpaid accrued and accumulating dividends.

Voting – Each share of preferred stock votes together with the Common Stock as a single class on all matters submitted to stockholders, with each share having a number of votes equal to the number of shares of Common Stock into which it is then convertible.

At June 30, 2026, the Company’s outstanding preferred stock consists of the following:


	Shares Authorized	Shares Outstanding		Conversion Price		Common Stock Equivalent		Liquidation Value		Accrued Dividends
Series A Preferred Stock	400,000		263,753	$	0.9129		5,275,060	$	4,815,616	$	199,485
Series B Preferred Stock	200,000		109,223	$	1.0300		2,184,460	$	2,250,000	$	5,548
Total at June 30, 2026	600,000		372,976				7,459,520	$	7,065,616	$	205,033

Share-based compensation

At June 30, 2026, the Company has reserved 37,594 and 0 shares of common stock issuable upon the exercise of outstanding stock options and unvested stock awards, respectively, under its 2016 Equity Incentive Plan. No shares of Common Stock are reserved for future equity awards under the 2016 Equity Incentive Plan.

Unvested Stock Awards

During the six months ended June 30, 2026 and 2025, the Company expensed $0 and $33 thousand, respectively, related to the stock awards.

Unless otherwise indicated, options issued to employees, members of the Board, and non-employees generally vest over a period of one year to three years and are exercisable for a term of 10 years from the date of issuance. There were no stock options granted during the six months ended June 30, 2026.

There was no intrinsic value for options outstanding or exercisable at June 30, 2026 and December 31, 2025.

The following table summarizes information about options outstanding and exercisable at June 30, 2026:


Weighted ‎average exercise ‎price of outstanding ‎options	Number of ‎options ‎outstanding	Weighted ‎average remaining ‎estimated life ‎(in years)	Number of ‎options ‎exercisable
< $10.00	13,673	7.0	13,673
$20.00 - $50.00	21,440	3.3	21,440
$100.00 - $200.00	931	4.7	931
$200.00 - $300.00	1,550	0.8	1,550
	37,594		37,594

Total share-based compensation on stock-option grants amounted to $5 thousand and $24 thousand for the six months ended June 30, 2026 and 2025, respectively. At June 30, 2026, the balance of unearned share-based compensation to be expensed in future periods related to unvested share-based awards was $0.