11. Stockholders’ Equity: Equity Offerings and Warrants

During the quarterly period ended June 30, 2026, the Company completed two equity offerings under its effective shelf registration statement on Form S-3 (Registration Statement No. 333-292781), as described below. Public Ventures LLC (doing business as MDB Capital) acted as underwriter for the underwritten public offering and as placement agent for the registered direct offering. The summary of the offerings is presented in the table below:

 Schedule of Offerings

Underwritten public offering

On June 9, 2026, the Company closed an underwritten public offering of units at a public offering price of $18.00 per unit, each unit consisting of two shares of common stock and one warrant to purchase one share of common stock (the “Investor Warrants”). Including the underwriter’s subsequent exercise of the over-allotment option, which closed on June 17, 2026, and which the Company accounts for as part of the same offering, the Company issued an aggregate of 661,150 shares of common stock and 330,575 Investor Warrants to purchase up to 330,575 shares. Aggregate gross proceeds were $5,950,350 and net proceeds were $5,280,941. As additional underwriting compensation, the Company issued warrants to purchase 99,172 shares of common stock (the “Underwriter Warrants”).

Registered direct offering

On June 30, 2026, the Company closed a registered direct offering of 71,110 shares of common stock and 35,555 Investor Warrants to purchase up to 35,555 shares, for gross proceeds of $639,990 and net proceeds of $580,206. In connection with the offering, as additional compensation to the placement agent, the Company issued a placement agent warrant to purchase 10,666 shares of common stock (together with the Underwriter Warrants, the “Compensation Warrants”).

Warrant terms

Investor Warrants.

The Investor Warrants have an exercise price of $11.24 per share, become exercisable on June 5, 2027, and expire on June 5, 2031. On or after they become exercisable, the Company may call the Investor Warrants for $0.01 per warrant if the closing price of the common stock equals or exceeds 200% of the per-share offering price for 20 trading days within any 30 consecutive trading-day period, subject to specified conditions. If, before June 5, 2027, the Company issues shares of common stock (or securities convertible into common stock), other than under a Board-approved equity incentive plan, at a price below the per-share offering price, the exercise price of the Investor Warrants will reset to $0.001 per share; this one-time reset is available only to original purchasers that have continuously held the shares acquired in the offering. Upon a fundamental transaction, holders are entitled to receive the same consideration as holders of common stock and, in certain transactions within the Company’s control, a cash payment based on the Black-Scholes value of the warrants.  

Compensation Warrants.

The Compensation Warrants have an exercise price of $11.24 per share and five-year terms; the Compensation Warrants become exercisable on December 30, 2026, and expire on June 30, 2031. The Compensation Warrants were issued as consideration for capital-raising services.

Classification and accounting

The Company evaluated the Investor Warrants and the Compensation Warrants under ASC 480 and ASC 815-40. The Investor Warrants were determined to be liability-classified because, upon the occurrence of certain Fundamental Transactions, the holders may require the Company or a successor entity to purchase the Warrants for cash based on their Black-Scholes Value. Accordingly, the Investor Warrants are recognized as warrant liabilities at fair value and are remeasured at fair value at each reporting date, with changes in fair value recognized in the statements of operations.

The Compensation Warrants were determined to be equity-classified and are recorded within stockholders’ equity. The gross proceeds from each offering were allocated between the Common Stock and the Investor Warrants based on their relative fair values.

The fair value of the Investor Warrants was estimated using the Black-Scholes option-pricing model with the following assumptions: expected volatility of approximately 81% (derived from a study of comparable public companies), a risk-free interest rate of 4.25%, an expected term of approximately 5.0 years, and no expected dividends.

The Company measures the Investor Warrant liability at fair value on a recurring basis. The following tables present its classification within the fair value hierarchy, the Level 3 inputs used to measure it, and a reconciliation of its beginning and ending fair value (ASC 820-10-50).

The following table summarizes the Company’s fair value hierarchy for the Investor Warrant liability, its only recurring fair value measurement, as of the dates presented:

Schedule of Fair Value Hierarchy for Investor Warrant Liability Recurring Fair Value Measurement

The Company estimated the fair value of the Investor Warrants using the Black-Scholes option-pricing model at issuance, using the following Level 3 inputs:

 Fair Value Measurement Inputs and Valuation Techniques

The Company remeasured the Investor Warrant liability as of June 30, 2026 using the following Level 3 inputs:

The following table provides a roll-forward of the fair value of the Investor Warrant liability for the period:

Schedule of fair value of Investor Warrant liability

Down-round feature

The Investor Warrants contain a down-round feature (the exercise-price reset described above). Because the Investor Warrants are classified as a liability and remeasured to fair value each reporting period, the reset is a contractual term of the fair-valued instrument, and its effect is reflected automatically in each period’s Black-Scholes remeasurement rather than through a separate analysis under ASU 2017-11 or a deemed-dividend calculation under ASC 260 (that framework applies only to equity-classified warrants). No qualifying issuance occurred during the period.

Subsequent measurement of the Investor Warrant liability

The Investor Warrant liability is remeasured to fair value at each reporting date, with the change in fair value recognized in earnings. The Investor Warrants issued in the underwritten public offering (base close, June 9, 2026, and over-allotment, June 17, 2026) were outstanding at the Company’s June 30, 2026 balance sheet date and were remeasured as of that date using the Black-Scholes pricing model. The Investor Warrants issued in the registered direct offering were issued on June 30, 2026, coinciding with the balance sheet date, and required no separate remeasurement. As a result of this remeasurement, the warrant liability decreased to $1,902,612 as of June 30, 2026