Note 5. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 20,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), of which 10,000 shares have been designated as Series A Convertible Preferred Stock, 10,000 shares have been designated as Series B Convertible Preferred Stock, 600,000 shares have been designated as Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and 4,285,714 shares have been designated as Series D Preferred Stock.

Series C Preferred Stock

The Series C Preferred Stock was originally issued at $25.00 per share. An amendment to, or waiver of rights in, the Series C Preferred Stock certificate of designation requires the approval of holders of a majority of the outstanding shares of Series C Preferred Stock and FRV (so long as FRV owns at least 71,000 shares of Series C Preferred Stock).

At July 31, 2026 and April 30, 2026, there were 380,440 shares of Series C Preferred Stock outstanding.

Holders of the Series C Preferred Stock are entitled to receive dividends at an annual rate of $1.50 per share of Series C Preferred Stock, shall accrue and are payable out of funds legally available, are payable only when and if declared by the board of directors, and are noncumulative. No dividends have been declared to date. The holders of the shares of Series C Preferred Stock have voting rights equal to an equivalent number of shares of Common Stock into which it is convertible and vote together as one class with Common Stock.

Each share of Series C Preferred Stock is convertible, at the option of the holder at any time, into such number of fully paid and non-assessable shares of Common Stock determined by dividing the original issue price of $25.00 by the conversion price for such series in effect at the time of conversion for the Series C Preferred Stock. The conversion price for the Series C Preferred Stock is subject to adjustment in accordance with conversion provisions contained in the Company's certificate of formation, as amended, including as a result of the Proposed Transaction and the private placement with Fortitude.

At July 31, 2026, the outstanding shares of Series C Preferred Stock were convertible into 295,141 shares of Common Stock at a conversion price of $32.22 per share.

Series D Preferred Stock

On March 10, 2025, the Company entered into a selling agency agreement (the “Placement Agent Agreement”) with Digital offering LLC (“Digital Offering”) to act as sole placement agent (the “Placement Agent”) on a “best efforts” offering of up to 4,285,714 Units, with each Unit consisting of (a) one share of the Company's Series D Preferred Stock and (b) one warrant to purchase one share of the Company's Common Stock, for a total of 4,285,714 shares of the Company's Series D Preferred Stock and warrants to purchase up to an aggregate of 4,285,714 shares of Common Stock (collectively, the “Offering”), pursuant to certain subscription agreements with certain investors, upon which each investor must complete a Subscription Agreement and submit the applicable subscription price as set forth therein. The offering price is $3.50 per Unit, for a maximum offering amount of $15.0 million worth of Units. Each warrant is exercisable at any time from the date of issuance through the third anniversary from the date of issuance, unless earlier redeemed and is exercisable to purchase one share of Common Stock at $5.00 per share, subject to customary adjustment.

Pursuant to the Placement Agent Agreement, the Placement Agent is entitled to receive from each closing of the Offering (i) a cash fee of 7% of the gross proceeds received by the Company from such closing, (ii) warrants (the “Agent Unit Warrants”) to purchase 3% of the total number of Units sold by the Company at such closing (the “Agent Units”) at an exercise price of $4.375 per Agent Unit Warrant, with each Agent Unit consisting of one share of Series D Preferred Stock (the “Agent Preferred Shares”) and one Warrant (the “Agent Warrants” and the shares of Common Stock underlying such Agent Warrants, the “Agent Warrant Shares”), and (iii) reimbursement of certain of its out-of-pocket expenses. Digital Offering is acting on a “reasonable best efforts” basis, in connection with the Offering and is under no obligation to purchase any of the Units or arrange for the sale of any specific number or dollar amount of shares of the Units.

On February 10, 2025, in connection with the Series D Preferred Stock Offering, the Company’s Board of Directors adopted a Certificate of Designations of Series D Preferred Stock, which was filed with the Secretary of State of the state of Texas (the “Texas Secretary of State”) on May 21, 2025, to create, out of the Company’s authorized but unissued preferred stock, the Series D Preferred Stock (the “Certificate of Designations of Series D Preferred Stock”). On May 28, 2025, the Company was notified by the Texas Secretary of State that the Company’s Certificate of Designations of Series D Preferred Stock was made effective as of the filing date.

The Series D Preferred Stock has an initial stated value of $3.50 per share which is equal to the price per Unit, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events. The Series D Preferred Stock ranks, as to dividend rights and rights upon the Company’s liquidation, dissolution, or winding up, senior to all classes or series of the Company’s Common Stock. The terms of the Series D Preferred Stock do not limit the Company's ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or junior in rank to the shares of the Company's Series D Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up.

Holders of the Series D Preferred Stock are entitled to receive dividends, when, as and if declared by the board of directors, in its sole discretion, out of funds legally available for that purpose. Any dividends that may be declared shall be non-cumulative. No dividends have been declared to date.

The liquidation preference for each share of Series D Preferred Stock is $3.50. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series D Preferred Stock will be entitled to receive the liquidation preference with respect to their shares.

Each share of Series D Preferred Stock is convertible into one share of Common Stock, at the option of the holder at any time. The conversion rate shall not be adjusted for stock splits, stock dividends, recapitalizations or similar events. At any time after issuance upon the occurrence of any of the following events, the Company shall have a right to direct the mandatory conversion of the Series D Preferred Stock: (a) a change in control, (b) if the price of the Common Stock closes at or above $5.00 per share for 10 consecutive trading days, or (c) if the Company consummates a firm commitment public offering of Common Stock for gross proceeds of at least $15 million at an offering price per share equal to or greater than $5.00.

The Company may not authorize or issue any class or series of equity securities ranking senior to the Series D Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior equity securities) or amend the Company's Amended and Restated Certificate of Formation, as amended (whether by merger, consolidation, or otherwise), to materially, and adversely change the terms of the Series D Preferred Stock without the affirmative vote of at least a majority of the votes entitled to be cast on such matter by holders of the Company's outstanding shares of Series D Preferred Stock, voting together as a class. Otherwise, holders of the Company's Series D Preferred Stock do not have any voting rights.

During the year ended April 30, 2026, the Company issued 1,912,383 Units consisting of Series D Preferred Stock and warrants to purchase shares of Common Stock for gross proceeds of approximately $6.7 million. There were no shares issued during the three months ended July 31, 2026. Since inception and through July 31, 2026, 1,487,119 shares of Series D Preferred Stock converted into 1,487,119 shares of the Company's Common Stock. At July 31, 2026, there were 425,264 shares of Series D Preferred Stock outstanding.

Common Stock

The Company’s Certificate of Formation, as amended, authorizes 500,000,000 shares of Common Stock. As of July 31, 2026 and April 30, 2026, the Company had 3,904,983 and 3,188,380 shares of Common Stock issued and outstanding, respectively.

During the three months ended July 31, 2026, the Company entered into an agreement with Streeterville that exchanged approximately $164,000 of accrued interest on its $2.5M Streeterville Note for 78,103 shares of the Company's Common Stock. The issuance of the shares was made pursuant to the exemption from the registration requirements afforded by Section 3(a)(9) of the Securities Act.

During the three months ended July 31, 2026, the Company issued 107,330 shares of Common Stock as a result of conversions of Series D Preferred Stock.

On September 18, 2023, the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC as sales agent pursuant to which the Company may offer and sell up to $3.25 million shares of Common Stock under the ATM Facility. The shares may be issued and sold from time to time through or to the placement agent acting as sales agent or principal pursuant to our shelf registration statement on Form S-3 (the “Shelf S-3”), as filed with the SEC on September 18, 2023. The $3.25 million shares comprised of Common Stock that may be offered, issued and sold under the at-the-market offering prospectus is included in the $50.0 million of securities that may be offered, issued, and sold by the Company under the base prospectus of the Shelf S-3. The Shelf S-3 was declared effective by the SEC on September 28, 2023.

On November 9, 2023, the Company entered into Amendment No. 1 to the EDA with Maxim, pursuant to which the Company may sell up to $10.0 million shares of Common Stock from time to time through the sales agent.

On November 17, 2023, the Company entered into Amendment No. 2 to the EDA with Maxim, pursuant to which the Company may sell up to $15.0 million shares of Common Stock from time to time through the sales agent.

On August 3, 2025, the Company entered into Amendment No. 3 to the EDA with Maxim Group pursuant to which the Company may offer and sell, from time to time, up to $25,000,000 of shares of Common Stock and the parties further agreed that Maxim will be entitled to compensation at a commission rate equal to 4.0% of the gross sales price per share sold pursuant to the EDA up to a maximum of $11,036,310 in gross proceeds to the Company, and 3.0% of the gross sales price per share sold pursuant to the EDA from any gross proceeds to the Company in excess of such amount; provided, however, that in no event will the Company issue or sell through the Sales Agent such number of shares of Common Stock that would cause the Company or the offering of its shares of Common Stock to not satisfy the eligibility and transaction requirements for use of Form S-3 (including General Instruction I.B.6 of Form S-3). 

During the three months ended July 31, 2026, the Company issued and sold 4,920 shares of Common Stock under the ATM Facility.

During the three months ended July 31, 2026, the Company issued 425,000 shares of restricted stock to management and 101,250 RSUs vested and settled into the same number of shares of Common Stock. See further discussion in Note 6. 

The holders of Common Stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the board of directors, subject to the rights of holders of Preferred Stock outstanding. No dividends were declared as of or through the three months ended July 31, 2026 and the year ended April 30, 2026.

Common Stock Warrants

The Company has issued warrants to investors in connection with funding or for services rendered and these warrants are convertible into a number of shares of the Company’s Common Stock for a period of 5 years from the date of issuance.

The following is a summary of warrant activity during the three months ended July 31, 2026: