NOTE 13 – STOCK OPTIONS AND WARRANTS

The Company has issued option securities under its Incentive Plan and warrants entitling the holder to purchase shares of its common stock at specified prices and for specified exercise periods.

Options:

A summary of the Company’s option activity for the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024 are presented below:

Year ended October 31, 2024 Options

During the year ended October 31, 2024, under its Incentive Plan, the Board approved the granting of options to certain employees, officers and directors to purchase 622,538 shares of its common stock. The options vest over various periods ranging from 6 months to 3 years, expire five to ten years from the date of grant and had an aggregate fair value of $1,438,000 at the date of grant. The Company valued the options using a Black-Scholes option pricing model with the following assumptions:

During the year ended October 31, 2024, all options issued to Dr. Leider, the former Chief Executive Officer, that were not vested amounting to 190,000 at the time of the expiration of his employment agreement on May 31, 2024, were forfeited. In addition, all options issued to Dr. Leider and Dr. Howard Golub, the former Chief Science Officer, and an employee, that were vested amounting to 95,000, 250,000, and 20,000, respectively, at the time of the expiration of their employment agreements, were not exercised by August 31, 2024 as required under the Incentive Plan, and as a result expired.

Year Ended October 31, 2025 Options

During the year ended October 31, 2025, under its Incentive Plan, the Board approved the granting of options to certain employees to purchase 11,341 shares of its common stock. The options vest annually over 3 years, expire five years from the date of grant and had an aggregate fair value of $39,000 at the date of grant.

During the year ended October 31, 2025, the Board approved the granting of options to purchase an aggregate of 65,000 shares of its common stock to Dr. Everts, Chief Science and Technology Officer of the Company and Mr. Ron Borsheim, Chief Sales Officer of the Company in accordance with their employment agreements. The options are exercisable until the fifth anniversary date of the date of issuance and had an aggregate fair value of $177,000. The options vest over a five-year period.

On May 8, 2025, under its Incentive Plan, the Board approved the granting of options to certain employees, officers and directors to purchase 165,000 shares of its common stock. 153,000 of the options vest immediately and 12,000 of the options vest over a 4-month period, expire five years from the date of grant and had an aggregate fair value of $472,000 at the date of grant. The Company valued the options using a Black-Scholes option pricing model with the following assumptions:

Eight Months Ended June 30, 2026 Options

During the eight months ended June 30, 2026, under its Incentive Plan, the Board approved the granting of options to certain employees to purchase 7,790 shares of its common stock. The options vest annually over 3 years, expire five years from the date of grant and had an aggregate fair value of $20,000 at the date of grant.

On June 10, 2026, the Board granted fully vested stock options to purchase an aggregate of 2,032,500 shares of common stock under the 2021 Plan at an exercise price of $1.67 per share. Options for 625,000 shares, granted to Ian Bothwell, the Company’s Chief Executive Officer and 625,000 shares of the Company’s common stock to Dr. George Shapiro, the Company’s Chief Medical Officer and 625,000 to Greyt Ventures LLC, a principal shareholder of the Company, have a 10-year term and are exercisable on a cashless basis; options for 80,000 shares, granted to a non-executive director, and options for 77,500 shares granted to certain employees, and a consultant, have a 5-year term and are not exercisable on a cashless basis. The awards were fully vested on the grant date, and the aggregate grant-date fair value of $3,395,000 was recognized as stock-based compensation expense on the grant date.

The Company valued the options using a Black-Scholes option pricing model with the following assumptions:

Options totaling 85,877 that were previously issued to employees that are no longer employed by the Company as of June 30, 2026, were forfeited.

During the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024, the Company amortized $3,596,000, $1,523,000 and $953,000, respectively, of stock compensation costs associated with options vesting during the period.

There was approximately $51,000 of unamortized compensation associated with options outstanding as of June 30, 2026 that will be amortized over their respective remaining service periods.

Warrants:

A summary of the Company’s warrant activity for the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024 are presented below:

Fiscal Year Ended October 31, 2024 Warrants

On July 8, 2024, in connection with the Financing (see Note 12), the Company issued the Investor a cashless warrant to purchase an aggregate of 83,333 shares of common stock. The warrant is exercisable for $2.00 per share (the closing price of the Company’s common stock on the date of grant was $1.66), until the tenth anniversary date of the date of issuance. The exercise price and number of shares issuable upon exercise of the warrant are subject to adjustment to give effect to stock splits, stock dividends and other recapitalization events and the sale of shares at a purchase price less than the exercise price then in effect.

On July 11, 2024, the Company granted warrants to purchase 350,000 shares of common stock to each of two consultants and then principal shareholders of the Company (“Consultants”). The Warrants vest in equal monthly installments over an eighteen (18) month period from the date of grant. Once vested, the Warrants are exercisable for a period of ten (10) years from the date of grant at an exercise price of $2.35 per share (subject to adjustment for stock splits, stock dividends and similar recapitalization events). The Consultants, who are the controlling stockholders of the Company, were also accorded piggy-back registration rights under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock issuable upon exercise of the warrants. 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 4.20%, (2) term of 10 years, (3) expected stock volatility of 159%, and (4) expected dividend rate of 0%. The grant date fair value of the warrants granted to each of the Consultants was $823,000 (total $1,645,000). The Company will amortize $1,645,000 of stock-based compensation expense over the vesting period of 18 months.

In August 2024, the Company entered into an agreement with a third party to provide consulting services for a one-year period. As consideration for agreeing to provide consulting services to the Company, the Company agreed to issue the consultant vested warrants to purchase 100,000 shares of unregistered common stock. 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 3.96%, (2) term of 3 years, (3) expected stock volatility of 147%, and (4) expected dividend rate of 0%. The grant date fair value of the warrants granted was $185,000. The Company will amortize $185,000 of stock-based compensation expense over the term of the consulting agreement.

Fiscal Year Ended October 31, 2025 Warrants

In connection with the Consulting Agreement discussed in Note 12, during May 2025, the Company granted the Consultant warrants to purchase 500,000 shares of its common stock (the “Warrants”). 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 based upon meeting certain conditions 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 begin to amortize the $1,428,000 when management estimates the vesting conditions are probable of being achieved. During June 2026, the Consulting Agreement was amended whereby four (4) tranches of the Warrants to purchase an aggregate of 400,000 shares of its common stock were terminated and forfeited (total of $1,141,000 of unamortized stock compensation costs).

On May 8, 2025, the Company awarded warrants to purchase 55,000 shares of our common stock to Greyt Ventures, LLC, a principal shareholder of the Company in consideration of consulting services rendered to the Company. The warrants are fully vested as of the award date and are exercisable for a period of five (5) years from the award date at an exercise price of $2.86 per share. The Company valued the warrants using a Black-Scholes option pricing model with the following assumptions:

On July 25, 2025, the Company received notice from a holder of warrants to exercise 21,277 warrants to purchase 21,277 shares of common stock of the Company for a total exercise price of $50,000 ($2.35 per share). The proceeds were received, and the shares were issued on July 30, 2025.

Eight Months Ended June 30, 2026 Warrants

As described in Note 12, 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.

During the eight months ended June 30, 2026 and the years ended October 31, 2025 and 2024, the Company amortized $215,000, $2,937,000 and $2,450,000, respectively, of stock compensation costs associated with warrants issued during the period.

Included in the table above is approximately $231,000 of unamortized compensation associated with 100,000 warrants outstanding as of June 30, 2026. The Warrants are exercisable at $5.00 per share, and are exercisable based upon meeting certain conditions provided in the Consulting Agreement. Once vested, the Warrants are exercisable for a period of one hundred and eighty (180) days from the date they become exercisable. The fair value of the warrants was determined to be $231,000. The Company will begin to amortize the $231,000 fair value when management estimates the vesting conditions are probable of being achieved.

There was approximately $231,000 of unamortized compensation associated with warrants outstanding as of June 30, 2026 that will be amortized over their respective remaining service periods. There was approximately $1,270,000 of unamortized compensation associated with warrants outstanding as of October 31, 2025 that will be amortized over their respective remaining service periods. There was approximately $3,005,000 of unamortized compensation associated with warrants outstanding as of October 31, 2024 that will be amortized over their respective remaining service periods.

All stock compensation expense is classified under general and administrative expenses in the consolidated statements of operations.