Note 12. Equity Transactions

Convertible Preferred Stock

The Company has 150,000 shares of preferred stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into 138,889 shares of the Company’s common stock at the holder’s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock.

Common Stock

During the year ended June 30, 2026:

7,889,266 pre-funded warrants were exercised for 7,889,266 shares of common stock in connection with the private placement offering occurring in April 2025 in which the Company issued 35,970,383 shares of common stock at an offering price of $2.28 per share.

In connection with a private placement offering of equity in July 2025, 12,457,186 shares of common stock were issued.

In connection with the notice of conversion relating to convertible debt in July 2025, 276,238 shares of common stock were issued.

In connection with the cashless exercises of warrants, 678,352 shares of common stock were issued.

In connection with the exercise of warrants for cash, 33,334 shares of common stock were issued.

In connection with the vesting of restricted stock units, 533,665 shares of common stock were issued.

In connection with the Company’s at-the-market offering program, the Company issued 6,581,559 shares of common stock for aggregate gross proceeds of approximately $7.7 million.

In connection with a private placement offering of equity in November 2025, the Company issued 3,289,474 shares of common stock and 3,289,474 common stock purchase warrants to purchase up to 3,289,474 shares of common stock for aggregate gross proceeds of $10.0 million, representing an effective purchase price of $3.04 per share of common stock and accompanying warrant. Each warrant is exercisable for one share of common stock. In connection with the February 2026 private placement, the Company amended the warrants issued in November 2025 to reduce the exercise price from $4.00 to $2.83 per share.

In connection with a private placement financings completed in February 2026, the Company issued 6,337,000 shares of common stock and 6,337,000 common stock purchase warrants issued in a private placement that generated aggregate gross proceeds of approximately $7.4 million, representing an effective purchase price of $1.17 per share of common stock and accompanying warrant. Each such warrant is exercisable for one share of common stock at an exercise price of $1.50 per share.

In June 2026, the Company entered into a privately negotiated debt-for-equity exchange in which it issued 5,250,000 shares of common stock and 6,992,300 pre-funded common stock purchase warrants to purchase up to 6,992,300 shares of common stock for aggregate purchase price of approximately $19.5 million, representing an effective purchase price of $1.60 per share of common stock and accompanying warrant. The aggregate purchase price was satisfied through the retirement and cancellation of $19.5 million of the outstanding principal under the Company’s Convertible Note – January 2026 Issuance. Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $0.00001 per share.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured. Warrants that do not meet the required criteria for equity classification are classified as liabilities.

The Company evaluated the warrants and concluded that they met the criteria to be classified within stockholders’ equity within additional paid-in-capital. The warrants are equity classified because they (1) are freestanding financial instruments that are legally detachable and separately exercisable from the common stock, (2) are immediately exercisable, (3) do not embody an obligation for the Company to repurchase its shares, (4) permit the holder to receive a fixed number of shares of common stock upon exercise, (5) are indexed to the Company's common stock and (6) meet the equity classification criteria. As of June 30, 2026, the Company had 3,289,474 warrants outstanding related to the November 2025 private placement offering, 6,337,000 warrants outstanding related to the February 2026 private placement offering, 6,992,300 warrants outstanding related to the June 2026 private placement offering, and an additional 168,134 warrants outstanding related to various prior period issuances.

Stock Repurchase Program

In November 2025, the Company’s Board of Directors authorized a share repurchase program of up to $50.0 million of common stock. The timing, manner, price, and amount of repurchases will be determined at management’s discretion, based on factors such as share price, market conditions, and available liquidity. The program does not obligate the Company to acquire any specific number of shares and may be suspended or discontinued at any time.

During the year ended June 30, 2026, the Company repurchased 2,894,287 shares of common stock at a weighted-average price, including fees, of $0.96 per share, for total consideration of approximately $2.8 million.

As of June 30, 2026, all repurchased shares have been retired and are not reflected as treasury stock in the Consolidated Balance Sheets.

Stock Split

The Company effectuated a reverse stock split, at a rate of 20 to 1, effective at 12:01 am ET, October 3, 2024. The total issued and outstanding shares of the Company’s common stock, post reverse stock split was 1,040,886. The Depository Trust Company (“DTC”) has requested an additional 202,183 shares of the Company’s common stock to round up, pursuant to the terms of the reverse stock split, the holdings of DTC’s beneficial holders. These shares were issued on October 23, 2024 and on October 30, 2024 we were notified that the shares were returned to the Company’s transfer agent. Although the Company did receive the common stock back after issuance, the potential dilution remains a risk, and is the subject of a complaint filed by the Company in the United States District Court for the District of Nevada with the purpose of eliminating any said risk. The Reverse Stock Split did not modify the relative rights or preferences of the common stock.