The warrants were issued during the year ended December 31, 2022 in conjunction with Series A Preferred Stock in satisfaction of outstanding debt. The warrants were not considered indexed to the issuer’s stock pursuant to ASC 815, as the warrants are subject to vesting upon the thirty-six (36) mensiversaries of the issuance date, at a rate of one thirty-sixth (1/36th) per month. At the option of the Company, the Company can return to the holder any cash it previously received from the holder. Upon the occurrence of such return of capital, the vesting schedule recasts based on amount returned and

remaining time period to vest. As this contingency is based on the underlying capital account of the warrant holder it violates the fixed-for-fixed option pricing model. As such, the Company recorded the warrants as liabilities initially measured at fair value with subsequent changes in fair value recognized in earnings each reporting period. 961,256 of the warrants are pre-funded warrants.

The Type 1 warrants are “penny warrants”, meaning they have an exercise price of $0.01 ($0.03 after the Reverse Stock Split). The fair value of these penny warrants was calculated as the Company’s stock price less the exercise price of $0.01 ($0.03 after the Reverse Stock Split) (i.e., intrinsic value). The grant date fair value of the Type 1 Warrants was $692,103. The fair value of the warrants as of June 30, 2026 and December 31, 2025 was $2,968,793 and $1,382,955, respectively.

During the six months ended June 30, 2026, third parties performed professional services for the Company and were issued 5,295 warrants as payment for the services. The measurement of fair value of the warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments.

On May 1, 2026 the Company issued 86,393 warrants to a customer as consideration for entering into a contract. Fifty percent (50%) of the warrant interests provided for herein vest in six equal monthly installments beginning on May 1, 2026. The remaining fifty percent (50%) of the warrant interests vest in eighteen equal monthly installments beginning on November 1, 2026. The measurement of fair value of the Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance. The warrants issued are not redeemable in cash at the choice of the holder, are not mandatorily redeemable into common stock, and are classified as equity instruments. The Company recognizes the fair value of the warrants within equity over the vesting period of the warrants.


	Number of Warrants	Weighted Average Exercise price ($)	Weighted Average Grant-Date Fair Value ($)	Weighted Average Remaining Contractual Life (in Years)
Warrants outstanding as of January 1, 2025	1,439,962	1.02	1.72	2.31
Granted	195,696	9.36	7.83
Exercised	(872,100)	0.27	1.78
Warrants outstanding as of December 31, 2025	763,558	4.20	3.47	2.94
Granted	91,688	23.15	13.41
Exercised	(4,167)	3.00	1.97
Warrants outstanding as of June 30, 2026	851,079	6.23	4.52	2.52
Warrants exercisable as of June 30, 2026	776,434	4.42	3.44	2.50

No warrants were issued during the three and six months ended June 30, 2025. The total fair value of warrants granted during three and six months ended June 30, 2026 amounted to $1,229,733. The Black-Scholes model utilized the following inputs to value the warrants granted:


	June 30, 2026			December 31, 2025
Warrant Valuation Assumptions:
Risk-free interest rate	3.9%	-	4.1%	3.5%	-	3.7%
Expected term (years)	2.92	-	3.00	2.83	-	3.42
Expected volatility	89.0%	-	94.0%	117.0%	-	123.0%
Expected dividend yield			—%			—%