NOTE 12 – CAPITAL STOCK

Preferred Stock

The Company is authorized to issue 10,000,000 shares of $0.001 par value preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Company’s board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and the Company’s Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock.

Series C Preferred Shares

On August 17, 2022, the Company filed a Certificate of Designation for a newly created Series C Non-Convertible Preferred Stock consisting of 100 shares, $0.001 par value of authorized but unissued preferred stock of the Company (“Series C Preferred Shares”). The Company initially issued each of Skycrest and Greyt, 50 shares of the Series C Preferred Shares in connection with a “change in control” transaction” consummated in August 2022. On December 17, 2024, the Company filed an Amendment (the “Amendment”) to the Certificate of Designation of our Series C Preferred Shares.

During December 2024, Skycrest requested that it be allowed to transfer the 50 shares of Series C Preferred Shares of the Company it holds to Ian T. Bothwell, the Company’s Chief Executive Officer and Chief Financial Officer (“Transfer”). In December 2024, the Board of Directors of the Company approved the Transfer and the Transfer was completed.

The Series C Preferred Shares vote together with shares of our common stock as a single class on all matters presented to a vote of stockholders and represent 51% of the voting control of the Company, except as required by law. The Series C Preferred Shares are not convertible into common stock, do not have any dividend rights and do have a nominal liquidation preference. The Series C Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series C Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions, including the assignment of interests and redemption provisions.

Common Stock

On November 7, 2023, the Company filed a certificate of amendment to its Articles of Incorporation to effect a reverse split of our issued and outstanding common stock on a one-for-two-hundred basis. The reverse stock split was effective with FINRA on November 28, 2023 (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. All share and per share amounts have been retroactively adjusted to reflect the split as if it occurred at the earliest period presented.

Sale Of Common Stock

On July 8, 2024, the Company completed a $500,000 private financing (“Financing”) with a single accredited investor (“Investor”). In the Financing, the Company sold and issued to the Investor 250,000 shares of common stock (“Shares”) and warrants to purchase an additional 83,333 Shares (the “Warrants”) (see Note 13). In connection with the Financing, the Company agreed to provide the Investor certain piggy-back registration rights under the Securities Act of 1933, as amended (“Securities Act”) with respect to the Shares purchased and the Shares underlying the Warrants purchased. The proceeds are being used for working capital purposes.

On July 25, 2025, ZEO entered into a subscription agreement (“Subscription Agreement”) with a single accredited investor (the “Investor”) pursuant to which the Investor agreed to purchase 250,000 shares of our common stock (the “Shares”) in a private transaction for an aggregate purchase price of $1,000,000 (the “Purchase Price”). The Shares were to be issued and sold and the Purchase Price paid in ten (10) equal monthly installments commencing on August 1, 2025 and ending on May 1, 2026. As of October 31, 2025, 75,000 shares have been sold for an aggregate of $300,000 in accordance with the Subscription Agreement. On November 1, 2025, an additional 25,000 shares were sold for $100,000 in accordance with the Subscription Agreement. On February 10, 2026, the Subscription Agreement was amended whereby the total number of Shares to be purchased under the Subscription Agreement was reduced to 100,000 Shares and no further shares are issuable. As of June 30, 2026, a total of 100,000 shares have been sold for an aggregate amount of $400,000 pursuant to the Subscription Agreement.

The above securities were offered and sold to the investors in accordance with the exemption from registration afforded by Section 4(a)(2) of and/or Rule 506(b) of Regulation D under the Securities Act.

Private Offering – Common Stock and Warrants

From November 2025 to June 2026, the Company sold 8.2 Units to fifteen investors for an aggregate purchase price of $2,050,000 in a private transaction. Each Unit consists of (i) 62,500 shares of common stock and (ii) warrants to purchase 62,500 shares of common stock of the Company at an exercise price of $4.00 until November 30, 2030. The warrants may be exercised on a cashless basis. In connection with the sale of the Units, the Company issued 512,500 shares of common stock and 512,500 warrants to purchase shares of common stock.

The above securities were offered and sold to the investors in accordance with the exemption from registration afforded by Section 4(a)(2) of and/or Rule 506(b) of Regulation D under the Securities Act.

Issuance of Equity Instruments for Services

2021 Plan

In September 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares (an “Award”) to any person who is an employee or director of, or consultant to the Company. The maximum aggregate number of shares that may be issued pursuant to all Awards was 1,250,000 shares. On June 6, 2023, the Company’s board of directors and stockholders holding a majority of the Company’s voting power, approved an increase in the number of shares of the Company’s common stock reserved for issuance under the Company’s 2021 Plan from 1,250,000 shares to 2,500,000 shares. On June 10, 2026, the Company’s board of directors and stockholders holding a majority of the Company’s voting power, approved an increase in the number of shares of the Company’s common stock reserved for issuance under the Company’s 2021 Plan from 2,500,000 shares to 7,500,000 shares.

The 2021 Plan is administered by (a) the board of the directors of the Company; or (b) a committee designated by the board, which Committee shall be constituted in such a manner as to satisfy the applicable laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such committee shall continue to serve in its designated capacity until otherwise directed by the board. The board of directors may at any time amend, suspend, or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by applicable laws.

As of June 30, 2026, a total of 5,962,395 Awards (net of 1,379,524 Awards redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding. As of October 31, 2025, a total of 1,595,482 Awards (net of 1,243,647 Awards redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding.

Restricted Stock Awards

Fiscal Year October 31, 2024 Issuances

Effective January 31, 2024, the Company and a legal firm performing services to the Company agreed to exchange $20,000 of legal fees payable due to the legal firm for 20,000 shares of newly issued common stock valued at $20,000, representing a 20% discount to the closing price of the common stock of the Company on the date the arrangement was agreed to by both the Company and the legal firm. The shares were issued to the legal firm in April 2024.

Effective April 1, 2024, the Company entered into sales distribution agreement with a sales and marketing company (“Salesco”). Salesco was entitled to receive commissions on sales of the Company’s products to customers introduced by Salesco in the form of cash and common stock of the Company based on sales milestones. In connection with the agreement, the Company agreed to pay Salesco a monthly advance of $15,000 for the first 6 months, provided however, that the last 2 monthly retainers were subject to Salesco achieving a certain minimum amount in sales during the applicable month. The monthly retainers were to be repaid from commissions earned by Salesco on sales of the Company’s products that are generated through Salesco. In addition, Salesco was granted 30,000 shares of the Company’s common stock which vests over 2 years, quarterly, except the quarterly vesting period will “cliff vest” upon the Company receiving $300,000 in cumulative sales from customers introduced by Salesco. The agreement may be terminated by the Company upon the six-month anniversary of the agreement. The 30,000 grant of shares was valued at $60,000 based on the closing price of the common stock of the Company on the effective date of the agreement of $2.00. The Company provided notice of termination of the agreement with Salesco during the eight months ended June 30, 2026. The Company recorded $8,000 and $18,000 of stock-based compensation expense during the years ended October 31, 2025 and 2024, respectively.

During April 2024 through August 2024, in consideration for agreeing to serve on the Company’s medical advisory board, the Board approved the issuance to a total of twenty individuals an aggregate of 155,000 shares of unregistered common stock valued at ranges between $1.04 per share and $2.75 per share, the closing price of the common stock of the Company on the respective grant dates. The shares vest annually over the three-year period from the date of grant. The Company will amortize $271,000 of stock-based compensation expense over a three-year vesting period. The Company recorded $34,000, $82,000 and $57,000 of stock-based compensation expense during the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024, respectively.

On April 1, 2024, pursuant to the Company’s 2021 Incentive Stock Plan (“Incentive Plan”), the Company’s Board of Directors (“Board”) awarded 125,000 and 62,500 shares of the Company’s common stock to Jerry Glauser and Leathem Stearn or their nominees, respectively (“Stock Grants”), both members of the Board, valued at $2.00 per share, the closing price of the common stock of the Company on the grant date. The Stock Grants vest in full as of the date of the grant. The Company recorded a total of $375,000 of stock-based compensation expense during the year ended October 31, 2024, in connection with the Stock Grants.

Fiscal Year October 31, 2025 Issuances

Effective February 1, 2025, in connection with an agreement with an independent sales representative (“Representative”), the Company agreed to grant the Representative 40,000 shares of the Company’s common stock which were to vest quarterly over a 2-year period beginning with the first month subsequent to the monthly period that the Representative generated a cumulative amount of sales for the Company in excess of $500,000 (“Sales Milestone”). In addition, the Representative will be entitled to receive commissions on sales of the Company’s products to customers introduced by the Representative in the form of cash and common stock of the Company based on sales milestones. The agreement may be terminated by the Company at any time upon 30 days written notice for failure of Representative to meet sales targets, to be solely determined by the Company. The fair value of the shares as of the date of grant was $104,000. The Company terminated the agreement during May 2026 without the Representative achieving the minimum Sales Milestone. As a result, the shares were forfeited and the Company did not record any expense in connection with the grant of shares.

On May 8, 2025, the Company entered into an agreement with a non-affiliated consultant (the “Consultant”) to advise the Company on strategic communication investor relation programs (“Consulting Agreement”). In connection with the Consultant Agreement, the Company granted the Consultant 100,000 shares of common stock (“Shares”) and warrants to purchase an additional 500,000 shares of common stock (the “Warrants”). 50,000 of the Shares with a fair value of $143,000 vested upon execution of the Consulting Agreement and the remaining 50% with a fair value of $143,000 will vest on the six-month anniversary of the Consulting Agreement. During the periods ended June 30, 2026 and the year ended October 31, 2025, the Company amortized $143,000 and $143,000, respectively, of expenses related to the fair value of the shares. The Warrants vest in five equal tranches of 100,000 shares, at various exercise prices ranging between $3.50 - $10.00 per share, and are exercisable on the terms provided in the Consulting Agreement. Once vested, the Warrants are exercisable for a period of ninety (90) days from the date they become exercisable. The Company valued the warrants on the date of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate 4.00%, (2) term of 3 years, (3) expected stock volatility of 143%, and (4) expected dividend rate of 0%. The grant date fair value of the warrants granted was $1,428,000. The Company will amortize $1,428,000 of stock-based compensation when management estimates the vesting the conditions are probable of being achieved.

Effective May 23, 2025, in connection with an agreement with a second consultant (“Second Consultant”), the Company agreed to grant the Second Consultant 40,000 shares of the Company’s common stock which shall vest quarterly over a 2-year period commencing on the date that sales obtained by the Company from customers introduced by Second Consultant exceed $400,000 (“Milestone”) and provided that the Milestone is achieved by December 31, 2025. Upon termination of the agreement for any reason, any unvested stock shall be forfeited. In addition, the Second Consultant will be entitled to receive commissions on sales of the Company’s products to customers introduced by the Second Consultant in the form of cash and common stock of the Company based on sales milestones. The agreement may be terminated at any time by either party upon 30 days written notice. The fair value of the shares as of the date of grant was $82,000. The Company will amortize $82,000 of stock-based compensation prorata over the vesting period once the Second Consultant has achieved minimum Sales Milestone. During May 2026, the Company and the Second Consultant amended the agreement whereby the Milestone was terminated without the Second Consultant achieving the Milestone and the shares were forfeited and the Company did not record any expense in connection with the grant of shares. As an inducement to enter into the amendment, the Company agreed to issue the Second Consultant 25,000 shares of common stock of the Company with a fair value of $___, if customer sales attributed to the Second Consultant exceeds $200,000 for 2 consecutive months during the months from May 2026 through December 2026.

On June 25, 2025, in connection with the Acquisition (see Note 18), the Company issued 30,000 restricted shares of the Company’s common stock valued at $58,000.

Eight Month June 30, 2026 Issuances

On December 1, 2025, the Company entered into a consulting agreement with a third party to provide certain market engagement and investor relations consulting services to the Company. Pursuant to the Consulting Agreement, the Company issued the consultant 10,000 restricted shares of common stock of the Company, 5,000 shares which vested and were issued on the agreement date and 5,000 Shares which vested on the 90^th day after the agreement date. The 10,000 grant of shares were valued at $2.05 per share, the closing price of the common stock of the Company on the effective date of the grant. The Company recorded a total of $21,000 of stock-based compensation expense based on the grant date fair value of these shares during the eight months ended June 30, 2026.

On December 23, 2025, in consideration for his performance, the Company awarded an employee of the Company, a bonus in the form of a restricted stock grant under the Company’s 2021 Plan of 25,000 shares of the Company’s common stock, to vest as to 12,500 shares on the date of the grant and the remaining 12,500 shares on the first anniversary of the award date. The 25,000 grant of shares was valued at $2.66 per share, the closing price of the common stock of the Company on the effective date of the grant. The Company will amortize $66,000 of stock-based compensation in accordance with the vesting periods. The Company recorded a total of $50,000 of stock-based compensation expense based on the grant date fair value of these shares during the eight months ended June 30, 2026.

On January 14, 2026, pursuant to the Company’s 2021 Plan, the Company’s Compensation Committee (“Comp Board”) awarded 175,000 shares of the Company’s common stock to Ian Bothwell, the Company’s Chief Executive Officer and 175,000 shares of the Company’s common stock to Dr. George Shapiro, the Company’s Chief Medical Officer. The Comp Board also approved the grant of 175,000 shares of common stock of the Company to Greyt Ventures LLC, a principal shareholder of the Company in consideration of consulting services rendered to the Company. The 525,000 grant of shares was valued at $2.66 per share, the closing price of the common stock of the Company on the effective date of the grant. The Company will amortize $1,395,000 of stock-based compensation expense over the one-year vesting term. The Company recorded $799,000 of stock-based compensation expense during the eight months ended June 30, 2026. The shares have not yet vested but have been issued as of June 30, 2026.

Effective January 23, 2026, Dr. Kisiday was appointed the Company’s Chief Technology Officer and the Company entered into an employment agreement (“Employment Agreement”) with Dr. Kisiday. In connection with Dr. Kisiday’s Employment Agreement, Dr. Kisiday was granted 50,000 shares of common stock under the 2021 Plan. The stock grant vests as to 20,000 shares on the first anniversary of the of the Employment Agreement and 30,000 shares on the second anniversary of the Employment Agreement. The 50,000 grant of shares was valued at $2.74 per share, the closing price of the common stock of the Company on the effective date of the Employment Agreement. The Company will amortize $137,000 of stock-based compensation expense over the two-year vesting term. Effective March 23, 2026, Dr. Kisiday’s employment was terminated and the 50,000 stock grant was forfeited.

During the period February 2026 to June 2026, in consideration for agreeing to join the Company’s medical advisory board or as a consultant, the Company issued to twelve individuals an aggregate of 182,500 shares of unregistered common stock valued between $1.66 and $2.45 per share, the closing price of the common stock of the Company on the respective grant dates. 10,000 of the shares vested immediately and the remaining 172,500 shares vest over periods up to a maximum of 3 years. The Company will record $367,000 of stock-based compensation expense based on the grant date fair value of these shares over the respective vesting terms. The Company recorded a total of $72,000 of stock-based compensation expense based on the grant date fair value of these shares during the eight months ended June 30, 2026.

During the eight months ended June 30, 2026, 20,833 and 50,000 shares that were granted in 2024 and 2025, respectively, vested, of which $34,000 and $143,000, respectively, of stock based compensation expense was recognized during the eight months ended June 30, 2026. The shares have not yet been issued as of June 30, 2026. In addition, 125,000 shares granted prior to October 31, 2025 were forfeited due to termination and/or failure to satisfy service or performance conditions of the respective agreements.

A summary of unvested restricted stock activity for the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024 are presented below:

The Company recorded a total of $1,119,000, $233,000 and $74,000 of stock-based compensation expense based on the grant date fair value of these shares during the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024, respectively.

As of June 30, 2026, the Company has issued 525,000 shares that have not yet vested. There was approximately $962,000 of unamortized compensation associated with unvested stock grants outstanding as of June 30, 2026 that will be amortized over their respective remaining service periods.