Note 9 - Common Stock Warrants

As of September 30, 2026, the Company had five classes of warrants totaling 20,870,083, consisting of 9,487,500 Public Warrants, 7,347,500 Private Placement Warrants, 569,250 Representative’s Warrants, 132,500 HCW Warrants and 3,333,333 Ascent Warrants. Each Public Warrant, Private Placement Warrant, Representative’s Warrant and HCW Warrant is exercisable into 1/7,500 of a share, as affected by the Reverse Stock Splits. Each Ascent Warrant is exercisable into 1/100 of a share, as affected by the July and August Reverse Stock Splits. Only whole shares of common stock may be issued upon exercise of the warrants. Fractional shares resulting from the exercise of the Public Warrants, Private Placement Warrants, Representative’s Warrants and HCW Warrants are rounded down to the nearest whole share, while fractional shares resulting from the exercise of the Ascent Warrants are settled in cash based on the applicable exercise price.

The Ascent Warrants were issued on April 2, 2026 and subsequently modified on April 20, 2026, April 29, 2026, and August 12, 2026. The Ascent Warrants were liability-classified as of April 2, 2026 and April 20, 2026 as it was determined that these warrants were not indexed to their own stock. The April 29, 2026 amendment resulted in the Ascent Warrants becoming equity-classified. The fair value of the Ascent Warrants was calculated under the Black-Scholes option pricing model using the following key inputs, as affected by the July and August Reverse Stock Splits, during the three and nine months ended September 30, 2026 as follows:

On April 20, 2026, in connection with the April 2026 Ascent PIPE Notes, the Company entered into a side letter agreement that increased the number of shares issuable upon exercise of the Ascent Warrants from 11,111 shares to 33,333 shares, as adjusted for the Reverse Stock Splits (see Note 5). The modification increased their fair value from $0.8 million to $2.2 million. The Company accounted for the incremental fair value of $1.4 million as issuance costs of the April 2026 Ascent PIPE Notes. Total financing costs related to the Ascent Warrants were $2.2 million during the nine months ended September 30, 2026, consisting of approximately $0.8 million in initial issuance date fair value and approximately $1.4 million in incremental fair value from the April 20, 2026 modification, and these costs were expensed as incurred because the April 2026 Ascent PIPE Notes are carried at fair value.

On April 29, 2026, the Ascent Warrants were modified to remove a cash settlement feature, after which the Ascent Warrant met all of the criteria for equity classification under ASC 815-40. The Company remeasured the Ascent Warrants to fair value immediately before the amendment and recognized a gain of $0.4 million during the nine months ended September 30, 2026. The Company then reclassified the warrant liability, at its fair value of $1.8 million, to additional paid-in capital.

On August 12, 2026, in connection with Amendment No. 5 to the PIPE Subscription Agreement, the Company reduced the exercise price of the Ascent Warrants from $50.00 per share, as adjusted for the July and August Reverse Stock Splits, to $4.28 per share, as adjusted for the August Reverse Stock Split. The amendment did not modify the number of shares issuable under the Ascent Warrants or otherwise change the terms affecting their equity classification. Accordingly, the Ascent Warrants remained equity classified following the modification. The incremental fair value resulting from the modification was determined to be immaterial for the three and nine months ended September 30, 2026.

On August 12, 2026, the Company’s Board of Directors approved an adjustment to the warrant exercise price related to the August Reverse Stock Split for the Public Warrants, Private Placement Warrants, and Representative Warrants. Prior to the Company’s August Reverse Stock Split, the Company had 17,404,250 outstanding Warrants (excluding the Ascent Warrants) to purchase 9,282 shares of Common Stock, with each whole Warrant being exercisable under the Warrant Agreement to purchase one Warrant Share, with an exercise price of $21,562.50 per Warrant Share. After giving effect to the August Reverse Stock Split, these 17,404,250 Warrants are exercisable into a total of 2,320 shares of Common Stock, with each whole Warrant exercisable to purchase 1/7,500th of a Warrant Share, and the exercise price was adjusted to $86,250.00 per whole Warrant Share.

As of December 31, 2025, the Company had four classes of warrants totaling 17,536,750, consisting of 9,487,500 Public Warrants, 7,347,500 Private Placement Warrants, 569,250 Representative’s Warrants, and 132,500 HCW Warrants. Each warrant is exercisable into 1/7,500 of a share, as affected by the Reverse Stock Splits, but only whole shares of common stock can be issued.