CAPITALIZATION

6 Months Ended

Jun. 30, 2026

NOTE 6: CAPITALIZATION

As of June 30, 2026 and December 31, 2025, the Company had 1,000,000,000 and 200,000,000 shares of common stock authorized, respectively, and 133,242,324 and 2,167,324 shares issued and outstanding, respectively.

As of June 30, 2026 and December 31, 2025, the Company had 5,000,000 shares of preferred stock authorized. As of December 31, 2025, the Company had 300,000 shares of Series AA Preferred Stock and 700,000 shares of Series AAA Preferred Stock issued and outstanding. During the six months ended June 30, 2026, all outstanding Preferred Stock was converted into 111,000,000 shares common stock. As such, there were no shares of Preferred Stock issued and outstanding as of June 30, 2026.

As of June 30, 2026 and December 31, 2025, there were warrants outstanding to purchase an aggregate of 1,788,729 shares of common stock with a weighted average remaining contractual term of 4.0 years as of June 30, 2026.

On February 11, 2026, the Company entered into warrant repricing agreements with certain holders of warrants to purchase an aggregate of 913,638 shares of the Company’s common stock that were issued in financing transactions during 2024 and 2025. Pursuant to these agreements, the exercise price of such warrants was reduced to $1.75 per share. As a condition to the repricing, the participating holders agreed to enter into a voting agreement pursuant to which they agreed to vote all shares of common stock held by them in favor of the proposals that were presented at the Company’s special stockholder meeting scheduled for February 26, 2026. The incremental increase in the fair value of such warrants was $0.4 million, recognized as other expense in the unaudited condensed consolidated statement of operations.

In addition, on February 11, 2026, the Company’s board of directors approved a reduction of the exercise price to $1.75 per share for the remaining warrants and placement agent warrants to purchase an aggregate of 762,787 shares of common stock issued in the same financing transactions. Other than the reduction in the exercise price, all other terms and provisions of the warrants remain unchanged. The incremental increase in the fair value of such warrants was $0.3 million, recognized as a deemed dividend.

The Company used a Black Scholes model to measure the fair value of the modified warrants immediately before and immediately after the modification using the following weighted average assumptions:

Term (in years)	4.4
Volatility	99.7	%
Annual Rate of Dividends	0.0	%
Discount Rate (Equiv. Bond Yield)	3.6	%

Following the warrant repricing, the total outstanding warrants as of June 30, 2026 were exercisable at a weighted average price of $19.57.

On June 1, 2022, the Company entered into an ATM Agreement, which was amended on September 1, 2022 with a sales agent, pursuant to which the Company may offer and sell, from time to time through the sales agent, shares of the Company’s common stock. The issuance and sale of common stock by the Company under the ATM Agreement is being made pursuant to the Company’s effective “shelf” registration statement on Form S-3 filed with the SEC on August 13, 2025 and declared effective on August 20, 2025. During 2025 the Company sold 520,000 shares of the Company’s common stock for aggregate net proceeds of approximately $2.25 million, after deducting issuance expenses in the amount of approximately $0.1 million. The Company’s ability to issue shares under the shelf registration statement on Form S-3 is limited by General Instruction I.B.6 to Form S-3.

On January 16, 2025, the Company completed a private placement offering pursuant to which the Company sold and issued to certain investors an aggregate of 75,335 shares of common stock and warrants to purchase 75,335 shares of common stock (the “January 2025 Warrants”). The shares and January 2025 Warrants were sold on a combined basis for consideration of $29.82 for one share and one January 2025 Warrant. The January 2025 Warrants are immediately exercisable at an exercise price of $26.32 per share and expire five years from the date of issuance. The total net proceeds were approximately $2.0 million, after deducting placement agent and other offering expenses in the amount of approximately $0.25 million. In February 2025, the Company filed a registration statement to register the resale by the investors of the shares of common stock and shares of common stock issuable upon exercise of the January 2025 Warrants. The registration statement was declared effective on February 11, 2025. In addition, in connection with the January 2025 Offering, the Company issued to the placement agent and its designees warrants to purchase an aggregate of 5,268 shares of common stock at an exercise price of $32.90. The placement agent warrants are exercisable six months from the date of issuance and expire on the fifth anniversary of the issue date. On February 11, 2026, the Company reduced the exercise price of the January 2025 Warrants and the placement agent warrants to $1.75 per share as described above.

On February 12, 2025, the Company entered into the SEPA with Yorkville, which provides that, upon the terms and subject to the restrictions and satisfaction of the conditions in the SEPA, Yorkville is committed to purchase up to an aggregate of $20.0 million of the Company’s shares of common stock over a 36-month period. At the Company’s option, the shares of common stock would be purchased by Yorkville from time to time at a price equal to 97% of the lowest of the three daily VWAPs during a three consecutive trading day period commencing on the date that the Company, subject to certain limitations, delivers a notice to Yorkville that the Company is committing Yorkville to purchase such shares of common stock. The Company may also specify a certain minimum acceptable price per share in each advance. The Company will control the timing and amount of sales of the Company’s shares to Yorkville. As consideration for Yorkville’s irrevocable commitment to purchase shares of the Company’s common stock upon the terms of and subject to restrictions and satisfaction of the conditions set forth in the SEPA, upon execution of the SEPA, the Company issued to Yorkville 10,927 shares of common stock as commitment shares. Under the applicable Nasdaq Rules and pursuant to the SEPA, in no event may the Company issue or sell to Yorkville more than 100,830 shares of common stock (the “Exchange Cap”), which is 19.99% of the shares of common stock outstanding immediately prior to the execution of the SEPA, unless (i) the Company obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap, or (ii) the average price of all applicable sales of common stock under the SEPA equals or exceeds $22.882 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) on the trading day immediately preceding the effective date or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the effective date). On February 12, 2025, the Company filed a Form S-1 covering the resale of up to 357,142 shares of common stock comprised of (i) 10,927 commitment shares, and (ii) up to 346,215 shares of common stock reserved for issuance and sale to Yorkville under the SEPA. The Form S-1 was declared effective on February 13, 2025. During 2025, the Company sold and issued 89,902 shares of common stock under the SEPA for aggregate net proceeds of approximately $1.74 million, after deducting offering expenses in the amount of approximately $0.1 million.

Effective March 11, 2026, the Company terminated the SEPA with Yorkville, and the SEPA is no longer in effect.

On December 22, 2025, the Company entered the Purchase Agreement with David E. Lazar pursuant to which the Company agreed to issue and sell an aggregate of 1,000,000 shares of convertible preferred stock, consisting of (i) 300,000 shares of Series AA Convertible Preferred Stock and (ii) 700,000 shares of Series AAA Convertible Preferred Stock (collectively the “Preferred Stock”) at a purchase price of $6.00 per share for gross proceeds of $6.0 million. The transaction closed on December 23, 2025 and on December 23, 2025, the Company filed a Series AA Certificate of Designation and Series AAA Certificate of Designation with the Secretary of State of Delaware designating the rights, preferences and limitations of each of the shares of the Series AA Preferred Stock and the Series AAA Preferred Stock, respectively. Each share of Series AA Preferred Stock was convertible, subject to stockholder approval, into 20 shares of the Company’s common stock, par value $0.01 per share. Each share of Series AAA Preferred Stock is convertible into 150 shares of common stock. Conversion of the Preferred Stock was subject to compliance with Nasdaq Listing Rule 5635, which required stockholder approval for issuances of common stock in excess of 19.99% of the Company’s outstanding shares. Accordingly, the Company agreed to seek stockholder approval for the issuance of the full number of shares of common stock underlying the Preferred Stock. On February 26, 2026, the Company’s stockholders voted to approve, among other things, the issuance of shares of the Company’s common stock issuable upon the conversion of the Series AA Preferred Stock and Series AAA Preferred Stock in accordance with Nasdaq Listing Rules 5635(b) and 5635(d).

The Company determined that the Preferred Stock was not within the scope of ASC 815 as it did not contain any embedded derivatives required to be bifurcated from the Preferred Stock therefore these instruments were equity classified within permanent equity.

In March 2026, all outstanding shares of Preferred Stock were converted to shares of common stock as described above.

On June 17, 2026, the Company entered into the Private Placement pursuant to which the Company agreed to issue and sell an aggregate of 20,000,000 shares of its common stock at a purchase price of $0.60 per share. The aggregate gross proceeds to the Company from the Private Placement were approximately $12.0 million before deducting offering expenses payable by the Company. The Private Placement was conducted directly by the Company, and no commissions or other compensation were paid in connection with it.

Under the June 2026 Purchase Agreement, each Purchaser was granted certain registration rights with respect to the shares of common stock purchased in the Private Placement. The Company is required to prepare and file a registration statement with the SEC covering the resale of such shares of common stock within 90 days following the closing of the Private Placement. The Company agreed to bear all fees and expenses incurred in connection with the registration of the registrable securities. The closing of the Private Placement was subject to customary closing conditions and occurred on the same date.

On June 26, 2026, the Company filed Form S-3 to register an aggregate of up to 18,864,000 shares of common stock consisting of (i) 11,250,000 shares of common stock issued upon the conversion of 75,000 Series AAA Preferred Stock originally issued by the Company on December 22, 2025 pursuant the Purchase Agreement and subsequently transferred pursuant to a secondary share sale agreement dated March 23, 2026 (the “March 2026 SSA”), (ii) 5,550,000 shares of common stock issued upon the conversion of 37,000 Series AAA Preferred Stock originally issued by the Company pursuant to the December 2025 Purchase Agreement, and subsequently transferred to pursuant to the March 2026 SSA, and (iii) 2,064,000 shares of common stock issued upon the conversion of 103,200 shares of Series AA Preferred Stock originally issued by the Company pursuant to the December 2025 Purchase Agreement. The S-3 was declared effective by the SEC on July 17, 2026.