Note 6. Stockholders’ Equity (Deficit)

In connection with the Business Combination, the Company’s certificate of incorporation was amended and restated to designate two classes of stock; preferred and common stock. The certificate of incorporation authorized 1,000,000 shares of preferred stock and 500,000,000 shares of common stock.

Preferred Stock

The Company’s Amended and Restated Certificate of Incorporation provides the Company’s board of directors with the authority to issue up to 1,000,000 shares of $0.0001 par value preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series, by adopting a resolution and filing a certification of designations. Voting powers, designations, powers, preferences and relative, participating, optional, special and other rights will be stated and expressed in such resolutions. There were zero preferred shares outstanding as of June 30, 2026 and December 31, 2025.

On July 2, 2026, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting Convertible Preferred Stock (the “Certificate of Designation”), which sets forth the rights, preferences, and privileges of the Series A Preferred Stock. One hundred sixty thousand (160,000) shares of Series A Preferred Stock were authorized under the Certificate of Designation.

Each share of Series A Preferred Stock will be convertible, at the option of the holder thereof, into 10,000 shares of the Company’s common stock, subject to adjustment. The Series A Preferred Stock may not be converted into shares of the Company’s common stock unless and until the Company’s stockholders approve the issuance of common stock upon conversion of the Series A Preferred Stock in accordance with the applicable Nasdaq listing rules.

Holders of the Series A Preferred Stock shall be entitled to receive dividends, on an as-if convertible basis, of any dividends payable on the Company’s common stock. The Series A Preferred Stock ranks on parity with the common stock. In the event of any voluntary or involuntary liquidation, dissolution, or winding up, or sale of the Company, each holder of Series A Preferred Stock shall be entitled to receive its pro rata portion of an aggregate payment equal to the amount as would be paid on the Company’s common stock issuable upon conversion of the Series A Preferred Stock, determined on an as-converted basis.

Other than those rights provided by law or the Certificate of Designation, the Series A Preferred Stock has no voting rights. The Series A Preferred Stock is not redeemable.

Common Stock

The Company is authorized to issue 500,000,000 shares of common stock, with a par value of $0.0001 per share.

On July 16, 2025, the Company entered into a settlement and release agreement with Alta Partners, LLC (“Alta”), pursuant to which the Company agreed to issue 350,000 shares of its common stock to Alta in exchange for the surrender and cancellation of 1,000,000 Public Warrants held by Alta. On July 16, 2025, the common stock issued to Alta and Public Warrants surrendered by Alta had a fair value of $1,890,000 and $150,000, respectively. As a result of the exchange, the Company recognized a loss of $1,740,000 on the difference in fair value between the common stock and Public Warrants.

On April 30, 2025, the Company settled Iris’ liabilities for $7,000,000 of the deferred underwriting fees incurred prior to the Closing Date for 700,000 shares of common stock to the underwriters in Iris’s initial public offering. On July 1, 2025, the Company issued the shares to the underwriters, which on July 1, 2025 had a fair value of $7,245,000.

On February 6, 2026, the Company entered into a settlement and release agreement with Clear Street (as defined in Note 7), pursuant to which the Company agreed to issue 4,000,000 shares of its common stock to Clear Street in exchange for the surrender and cancellation of 805,377 warrants to purchase shares of common stock held by Clear Street.

On February 18, 2026, the Company completed a “best efforts” public offering of (i) 8,270,000 shares of its common stock, (ii) 5,543,000 Pre-Funded Warrants to purchase up to 5,543,000 shares of common stock and (ii) 20,719,500 Common Stock Warrants to purchase up to 20,719,500 shares of common stock, at a combined public offering price of $0.29 per share (or $0.2899 per Pre-Funded Warrant) and accompanying warrant. Immediately upon closing of the Offering, 4,281,000 Pre-Funded Warrants were exercised and converted into 4,281,000 shares of common stock.

The Company allocated the Offering proceeds between the common stock, Pre-Funded Warrants, Common Stock Warrants and Placement Agent Warrants based on their relative fair values in accordance with ASC 505, Equity. The fair value of the common stock and Pre-Funded Warrants was based on the Company’s closing stock price on the closing date of $0.2449 per share.

The fair value of the Common Stock Warrants and Placement Agent Warrants was estimated using a Black-Scholes option pricing model with the following assumptions:

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The Offering proceeds and related issuance costs were allocated to the common stock, Pre-Funded Warrants, Common Stock Warrants and Placement Agent Warrants as follows:

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The amount allocated to the common stock and Pre-Funded Warrants was recorded in common stock at par value and the excess over par value in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2026. The amounts allocated to the Common Stock Warrants and Placement Agent Warrants were recorded in additional paid-in capital as the Common Stock Warrants and Placement Agent Warrants are equity-classified instruments.

Issuance costs, including placement agent fees, legal fees and accountant related expenses were recorded as reduction to additional paid-in capital in proportion to the allocation of proceeds between the equity instruments issued, as summarized above.

On February 19, 2026, the remaining 1,262,000 Pre-Funded Warrants were exercised for a nominal amount and converted into 1,262,000 shares of common stock.

On May 21, 2026, a holder of the Company’s Common Stock Warrants exercised a total of 750,000 warrants and received 750,000 shares of common stock. The aggregate gross proceeds from the exercise of the Common Stock Warrants was $217,500.

On June 3, 2026, the Company entered into a warrant exercise inducement offer letter with a holder to exercise 10,344,000 of its Existing Warrants at a reduced exercise price of $0.18 per share, in exchange for the Company’s agreement to issue the Inducement Warrants to purchase an aggregate of up to 20,688,000 shares of common stock, consisting of (i) 10,344,000 New Black-Scholes Warrants to purchase up to 10,344,000 shares of common stock at an exercise price per share of $0.18 and (ii) New Change of Control Warrants to purchase up to 10,344,000 shares of common stock at an exercise price per share of $0.18.

The Company allocated the Warrant Inducement proceeds between the common stock, New Black-Scholes Warrants and New Change of Control Warrants based on their relative fair values in accordance with ASC 505, Equity. The fair value of the common stock, New Black-Scholes Warrants and New Change of Control Warrants was estimated using a Black-Scholes option pricing model with the following assumptions:

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The Warrant Inducement proceeds and related issuance costs were allocated to the common stock, New Black-Scholes Warrants and New Change of Control Warrants as follows:

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As of June 30, 2026 and December 31, 2025, there were 55,971,633 and 27,064,633 shares of common stock issued and outstanding, respectively.

Holders of the Company’s common stock are entitled to one vote for each share held of record, on all matters submitted to a vote of stockholders. Additionally, holders of common stock have dividend rights, in the event of a declared dividend declared by the Company’s Board of Directors, and liquidation rights, in the event of an involuntary or voluntary event of liquidation that allow for the Company’s common stockholders to receive all remaining assets of the Company, after payments of debts and other liabilities.

Warrants

As of June 30, 2026, 5,094,623 Public Warrants and 835,555 private placement warrants (together, the “Warrants”) were outstanding. Each Warrant entitles the holder to purchase one share of the Company’s common stock at a price of $11.50 per share. No fractional shares will be issued upon exercise of the Warrants. The Company may elect to redeem the Public Warrants, in whole and not in part at a price of $0.01 per Warrant if (i) 30 days’ prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis.

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As of June 30, 2026, 9,625,500 Common Stock Warrants were outstanding. Each Common Stock Warrant entitles the holder to purchase one and a half shares of the Company’s common stock at a reduced exercise price of $0.18 per share and will expire five years following the date of issuance. No fractional shares will be issued upon exercise of the Common Stock Warrants.

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As of June 30, 2026, 690,650 Placement Agent Warrants were outstanding. Each Placement Agent Warrant entitles the holder to purchase one share of the Company’s common stock at a price of $0.319 per share and will expire five years following the date of issuance. No fractional shares will be issued upon exercise of the Placement Agent Warrants.

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As of June 30, 2026, 20,688,000 Inducement Warrants were outstanding. Each Inducement Warrant entitles the holder to purchase one share of the Company’s common stock at a price of $0.18 per share and will expire five years following the date of issuance. No fractional shares will be issued upon exercise of the Inducement Warrants.