Note 7. Stockholders’ Equity

ATM Offering

On August 30, 2024, the Company entered into an At The Market Offering Agreement (the “Sales Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) with respect to an “at the market” offering program, under which the Company may, from time to time, in its sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of the Company’s common stock. The Sales Agreement provides that Ladenburg will be entitled to compensation for its services equal to 3.0% of the gross proceeds from sales of any shares of common stock pursuant to the Sales Agreement in addition to the reimbursement of certain expenses. The Company has no obligation to sell any shares pursuant to the Sales Agreement and either the Company or Ladenburg may terminate the Sales Agreement in accordance with its terms.

On April 10, 2026, the Company filed a prospectus supplement to increase the maximum number of shares of common stock issuable pursuant to the Sales Agreement, to up to an aggregate of $2,125,000 of shares (the “2026 Increase”). As of June 30, 2026, the Company had sold shares having an aggregate gross sales price of approximately $4,827,743 under the Sales Agreement.

During the three months ended June 30, 2026 and 2025, the Company sold 2,449,681 and 941,192 shares of common stock for net proceeds of approximately $2,364,000 and $1,079,000, respectively, pursuant to the Sales Agreement. During the six months ended June 30, 2026 and 2025, the Company sold 4,821,624 and 1,270,158 shares of common stock for net proceeds of approximately $4,668,000 and $1,512,000, respectively, pursuant to the Sales Agreement.

Committed Equity Facility

On June 30, 2026, the Company entered into a Common Stock Purchase Agreement, amended by a letter agreement dated July 10, 2026 (as amended, the “Purchase Agreement”), and a related Registration Rights Agreement, with Roth Principal Investments, LLC (“Roth Principal Investments”). Pursuant to the July 10, 2026 amendment, Roth Principal Investments agreed to adjust the purchase price discount applicable to certain purchases effected outside of regular trading hours; the terms of the Purchase Agreement are otherwise unchanged, Upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company will have the right, in its sole discretion, to sell to Roth Principal Investments up to $25,000,000 of newly issued shares of common stock, subject to certain conditions and limitations contained in the Purchase Agreement, from time to time during the term of the Purchase Agreement. Sales of common stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to Roth Principal Investments under the Purchase Agreement.

Upon the initial satisfaction of each of the conditions to Roth Principal Investments’ purchase obligation set forth in the Purchase Agreement (the initial satisfaction of such conditions, the “Commencement”, and the date on which the Commencement occurs, the “Commencement Date”), including that a registration statement registering under the Securities Act of 1933, as amended (the “Securities Act”), the resale by Roth Principal Investments of shares of common stock issued to it by the Company under the Purchase Agreement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement (the “Registration Statement”), is declared effective by the SEC, the Company will have the right, but not the obligation, from time to time in its sole discretion for a period of up to 36 months beginning on the Commencement Date, to direct Roth Principal Investments to purchase up to a specified maximum amount of shares of common stock, in one or more Market Open Purchases, Intraday Purchases, Pre-Market Purchases and/or Post-Market Purchases, by timely delivering written notice to Roth Principal Investments for each such Purchase in accordance with the Purchase Agreement on any trading day selected by the Company as the purchase date therefor (the “Purchase Date”), so long as (i) the closing sale price of common stock on the trading day immediately prior to such Purchase Date is not less than a specified threshold price as set forth in the Purchase Agreement and (ii) all shares of common stock subject to all prior Purchases effected by the Company under the Purchase Agreement, including all prior Purchases effected on the same Purchase Date, have been received by Roth Principal Investments at such time and in the manner set forth in the Purchase Agreement.

The Company will control the timing and amount of any sales of common stock to Roth Principal Investments that it may elect, in its sole discretion, to effect from time to time from and after the Commencement Date and during the term of the Purchase Agreement.

In addition, the Company may not issue or sell any shares of common stock to Roth Principal Investments under the Purchase Agreement which, when aggregated with all other shares of common stock then beneficially owned by Roth Principal Investments and its affiliates would result in Roth Principal Investments beneficially owning more than 4.99% of the outstanding shares of common stock.

The Purchase Agreement includes an exchange cap of 3,004,114 shares (the “Exchange Cap”) on the number of shares issuable to Roth Principal Investments, representing 19.99% of the shares of common stock outstanding immediately prior to execution of the Purchase Agreement. The Exchange Cap will not apply if either (i) the Company obtains stockholder approval to issue shares in excess of the Exchange Cap or (ii) the average price per share paid by Roth Principal Investments for all shares purchased under the Purchase Agreement equals or exceeds $0.9853, in each case in accordance with Nasdaq Listing Rule 5635(d). The Company intends to seek stockholder approval to remove the Exchange Cap.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement, other than a prohibition (with certain limited exceptions) on entering into specified “Variable Rate Transactions” (as such term is defined in the Purchase Agreement) during the term of the Purchase Agreement. Such transactions include, among others, the issuance of convertible securities with a conversion or exercise price that is based upon or varies with the trading price of the common stock after the date of issuance, or the Company effecting or entering into an agreement to effect an “equity line of credit” or other substantially similar continuous offering with a third party, in which the Company may offer, issue or sell common stock or any securities exercisable, exchangeable or convertible into common stock at a future determined price.

The Purchase Agreement will automatically terminate on the earliest to occur of (i) the first day of the month following the 36-month anniversary of the Commencement Date, (ii) the date on which Roth Principal Investments shall have purchased from the Company under the Purchase Agreement shares of common stock for an aggregate gross purchase price of $25,000,000, (iii) the date on which the common stock shall have failed to be listed or quoted on Nasdaq or another U.S. national securities exchange identified as an “eligible market” in the Purchase Agreement for a period of one trading day, (iv) the 30th trading day after the date on which a voluntary or involuntary bankruptcy proceeding involving the Company has been commenced that is not discharged or dismissed prior to such 30th trading day, and (v) the date on which a bankruptcy custodian is appointed for all or substantially all of the Company’s property or the Company makes a general assignment for the benefit of its creditors.

As consideration for Roth Principal Investments’ commitment to purchase shares of common stock at the Company’s direction upon the terms and subject to the conditions set forth in the Purchase Agreement, the Company agreed to pay to Roth Principal Investments a cash commitment fee of $500,000 (the “Commitment Fee”). The $500,000 Commitment Fee will be paid over time by Roth Principal Investments withholding cash amounts equal to 10% of the total aggregate purchase price payable by Roth Principal Investments to the Company in connection with each Purchase of shares of common stock effected under the Purchase Agreement, until such time as Roth Principal Investments shall have received from such cash withholdings a total aggregate amount in cash equal to $500,000, representing the entire Commitment Fee payable to Roth Principal Investments pursuant to the Purchase Agreement.

In addition, the Company agreed to reimburse Roth Principal Investments for the reasonable legal fees and disbursements of Roth Principal Investments’ legal counsel in connection with the transactions contemplated by the Purchase Agreement and the Registration Rights Agreement in an amount equal to $100,000, payable upon execution of the Purchase Agreement and Registration Rights Agreement; provided that if the Company terminates the Purchase Agreement within 90 days following the effective date of the Registration Statement, the Company will be obligated to pay Roth Principal Investments, in cash, the amount, if any, by which $500,000 exceeds the aggregate amount of the Commitment Fee withheld by Roth Principal Investments as of the date of termination.

The Company has the right to terminate the Purchase Agreement at any time after Commencement upon 5 trading days’ prior written notice to Roth Principal Investments.

The Company has engaged Digital Offering, LLC, a registered broker-dealer and FINRA member (“Digital Offering”), to be the qualified independent underwriter (“QIU”) in connection with the offering to be registered under the Registration Statement. The Company has agreed to reimburse Roth Principal Investments for the fees and expenses of Digital Offering up to $50,000.

Deferred Equity Facility Costs

The Company incurred fees totaling approximately $290,000 to implement the committed equity facility and file the Registration Statement with the SEC. The fees comprised legal and accounting and the QIU fee. These fees have been recorded as a deferred equity facility costs at June 30,2026 (see Note 1).