Note 10: Stockholders’ Equity (Deficit)

Common Stock

The Company has authorized 500,000,000 shares of common stock, par value $0.01; 20,940,597 were issued and outstanding at June 30, 2026.

Issuance of Restricted Common Stock for Series X Preferred Stock Dividends

During the six months ended June 30, 2026, the Company issued 321,479 shares of common stock for dividends payable on its Series X Preferred Stock as discussed in further detail below. The price per share used in determining the number of shares issued was the stock price on the 15^th day of each month to determine the number of shares issuable.

Issuance of Restricted Common Stock for the Redemption of Series A Preferred Stock

During the six months ended June 30, 2026, the Company issued 5,151,063 shares of its restricted common stock for the redemption of Series A shares as discussed in further detail above in Note 9.

Equity Line of Credit

On June 28, 2026, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with an institutional investor (the “Investor”), pursuant to which the Investor is committed to purchase up to $30 million of shares of the Company’s common stock (the “Total Purchase Commitment”). There are no issuances underlying the Equity Line of Credit as of this filing. Moreover, the Company may cancel this facility at any time upon ten (10) days written notice.

In consideration for the Investor’s commitment to purchase shares of common stock under the Purchase Agreement, the Company has issued to the Investor a Convertible Promissory Note in the amount of $600,000 (the “Commitment Note”), which will be executed and become effective upon the use of the credit facility. Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, shares of common stock in an amount up to the Total Purchase Commitment. Sales under the Purchase Agreement will not commence until all of the conditions set forth in the Purchase Agreement have been satisfied, including that the Registration Statement (as defined herein) is declared effective by the Securities and Exchange Commission (the “SEC”) and the final Prospectus in connection therewith is filed. Thereafter, the Company may, subject to the satisfaction of certain additional conditions set forth in the Purchase Agreement, from time to time and in its sole discretion on any trading day that it selects provided, that the closing sale price of the common stock is equal to or greater than $0.01 and that all shares of common stock subject to all prior purchases have been properly delivered to the Investor in accordance with the Purchase Agreement, direct the Investor to purchase up to a number of shares of common stock equal to in the case of a fixed price purchase the lesser of (i) ninety percent (90%) of the average of the VWAP as for the five (5) trading days immediately proceeding the applicable fixed price date for such fixed purchase and (ii) ninety percent (90%) of the lowest sale price of a share of common stock on the applicable fixed purchase date for such fixed purchase during the full trading day on the eligible market on such applicable purchase date. The maximum fixed purchase amount shall be the lesser of (i) $250,000 and (ii) 20 million shares of common stock. In case of a VWAP Purchase, the lower of (i) the VWAP for the applicable VWAP purchase period during the applicable VWAP purchase date for such VWAP purchase, (ii) the lowest traded price of the common stock during the five trading days immediately proceeding the VWAP purchase date and (iii) the closing sale price of the common stock on such applicable VWAP purchase date for such VWAP purchase. The maximum amount for a VWAP purchase shall equal the lesser of (i) $250,000, (ii) thirty percent (30%) of the trading volume of the Company’s common stock on the eligible market during the applicable VWAP purchase period on the applicable VWAP purchase date and (iii) 300 percent (300%) of the number of shares of common stock included in the fixed purchase notice delivered concurrently with such applicable VWAP purchase notice.

The Company will control the timing and amount of any sales of common stock to the Investor. The Purchase Price per share will be equitably adjusted for any reorganization, recapitalization, noncash dividend, stock split or any other similar transaction occurring after the date of the Purchase Agreement.

Notwithstanding the foregoing, the Purchase Agreement prohibits the Company from directing the Investor to purchase any shares of common stock if those shares, when aggregated with all other shares of common stock then beneficially owned by the Investor and its affiliates, would result in the Investor and its affiliates having beneficial ownership at any single point in time of more than 4.99% of the then total outstanding shares of common stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder.

The Purchase Agreement prohibits the Company from entering into any other “equity line of credit,” “at the market offering” or other similar continuous offering in which the Company offers, issues or sells common stock or other equity securities at a future determined price.

The Company may at any time terminate the Purchase Agreement without fee, penalty or cost upon one (1) trading day’s written notice. The Investor may also terminate the Purchase Agreement upon ten (10) trading day’s written notice under certain circumstances set forth in the Purchase Agreement. The Investor may not assign or transfer its rights and obligations under the Purchase Agreement.

Pursuant to the Registration Rights Agreement, the Company agreed to register all shares of common stock issuable to the Investor under the Purchase Agreement (the “Registrable Securities”). The Company agreed to file an initial registration statement (the “Registration Statement”) with the SEC as soon as practicable, but in no event later than the forty-fifth (45th) calendar day after the date of the Registration Rights Agreement. If at any time all Registrable Securities are not covered by the Registration Statement, and if the Company desires to sell additional shares to the Investor under the Purchase Agreement, the Company shall then use its reasonable best efforts to file with the SEC one or more additional registration statements so as to cover all of the Registrable Securities not covered by the Registration Statement. Pursuant to the Registration Rights Agreement, the Company agreed to use its commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing, but in no event later than the earlier of (i) the Sixtieth (60^th) calendar day after the date of the Registration Rights Agreement, and (ii) the third (3rd) business day following the date the Company is notified by the SEC that the Registration Statement will not be reviewed.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Actual sales of shares of common stock to the Investor will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The Investor has covenanted not to cause or engage in, in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock.

As of June 30, 2026, the Company has not issued the $600,000 commitment note to the investor, and no sales of common stock have been made under the purchase agreement.

Other Common stock Issuances

During the six months ended June 30, 2026, the Company issued 375,000 shares to consultants for services performed with a fair value of $51,563 which was recorded as stock-based compensation.

Preferred Stock

We are authorized to issue 100,000,000 shares of Preferred Stock with such rights designations and preferences as determined by our Board of Directors. We have designated 3,000,000 shares of Series A Preferred (see Note 9), 10,000,000 shares of Series D Preferred, 10,000 shares of Series E Preferred, 140,000 shares of Series F Preferred, and 400,000 shares as Series X Preferred Stock.

Series D Preferred Stock

The Series D Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of 100% of the stated value plus accrued but unpaid dividends, accrued dividends at the rate of 6% on $1.05 per share, and converts into common shares at a rate of $0.25 per share. The Series D ranks senior to all other preferred stock of the Company except in relation to the Series X Cumulative Redeemable Perpetual Preferred Stock and the Series A Redeemable Preferred Stock, which ranks Pari passu to the Series D Preferred Stock. Each holder of our Series D Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series D preferred Stock held by such holder. The Company had no shares of Series D Preferred Stock outstanding at June 30, 2026.

Series E Preferred Stock

The number of shares of Series E designated is 10,000 and each share of Series E has a stated value equal to $1,000. Each share of Series E Preferred Stock shall have a par value of $0.01. There are 0 shares of Series E Preferred Stock outstanding at June 30, 2026. No shares of Series E Preferred Stock have ever been issued.

Series F Preferred Stock

The number of shares of Series F Preferred Stock designated is 140,000 and each share of Series F Preferred Stock has par value of $0.01, a liquidation preference of $1,000 and PIK dividends at 12%. The Series F Preferred Stock will rank senior to the Corporation’s Common Stock and on parity with all Preferred Stock of the Corporation with terms specifically providing that such Preferred Stock rank on parity with the Series F Preferred Stock with respect to rights to the distribution of assets upon any liquidation, dissolution or winding up of the Corporation; and (iii) junior to all Preferred Stock of the Corporation with terms specifically providing that such Preferred Stock rank senior to the Series F Preferred Stock with respect to rights to the distribution of assets upon any liquidation, dissolution or winding up of the Company. Holders of shares of the Series F Preferred Stock are entitled to receive payment-in-kind dividends payable only in additional shares of Series F Preferred Stock (“PIK Dividends”) at rate of 12% per annum. There are no shares of Series F shares outstanding as of June 30, 2026.

Series X Preferred Stock

The Company has 51,703 shares of its 10% Series X Cumulative Redeemable Perpetual Preferred Stock (the “Series X Preferred Stock”) outstanding as of June 30, 2026. The Series X Preferred Stock has a par value of $0.01 per share, no stated maturity, a liquidation preference of $25.00 per share, and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company decides to redeem or otherwise repurchase the Series X Preferred Stock. The Series X Preferred Stock will rank senior to all classes of the Company’s common and preferred stock except in relation to the Series A Redeemable Preferred Stock, which ranks Pari passu to the Series X Preferred Stock, and accrues dividends at the rate of 10% on $25.00 per share. The Company reserves the right to pay the dividends in shares of the Company’s common stock at a price equal to the closing stock price on the 15^th of each month. Each one share of the Series X Preferred Stock is entitled to 400 votes on all matters submitted to a vote of our shareholders.

On April 20, 2026, the Company issued additional shares of its Series X Preferred stock whereby each director received $60,000 of Series X Preferred stock as a part of their compensation for FY2026. An aggregate of $180,000 or 7,200 shares of Series X were issued as a result. As of the date of issuance, the shares are fully earned and no additional service is required.

On April 20, 2026, the Company issued additional shares of its Series X Preferred stock whereby a historical shareholder received $60,000, or 2,400 shares of Series X Preferred stock as consideration for consulting services performed. As of the date of issuance, the shares are fully earned and no additional service is required.

The Company accrued dividends in the amount of $32,314, and $12,314 on the Series X Preferred Stock for the three months ended June 30, 2026 and 2025, respectively. The Company accrued dividends in the amount of $58,628 and $24,628 on the Series X Preferred Stock for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, the Company had $32,314 and $26,314 in accrued dividends on the Series X Preferred Stock, respectively.

Warrants

The following table summarizes the warrants outstanding on June 30, 2026, and the related prices for the warrants to purchase shares of the Company’s common stock:

The following table summarizes the transactions involving options to purchase shares of the Company’s common stock:

At June 30, 2026, there was no intrinsic value on the issued or vested warrants.