Issuances of Common Stock

During the nine-month periods ended September 30, 2026, and 2025, there have not been any shares of common stock issued to anyone outside the Company, except as noted in this Note 12.

On June 18, 2021, the stockholders approved the Employee Stock Purchase Plan and on August 8, 2025, the stockholders approved the amendment to the plan to reserve an additional 70,000 shares of common Stock. Under the terms of this plan (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026), and as amended, 69,251 shares of common stock are reserved for issuance to employees and officers of the Company at a purchase price equal to 85% of the lower of the closing price of the common stock on the first day or the last day of the offering period as reported on the Nasdaq Capital Market. Eligible employees are granted an option to purchase shares under the plan funded by payroll deductions. The Company may suspend or terminate the plan at any time, otherwise the plan expires June 17, 2031. There were zero shares issued during the three-month periods ended September 30, 2026 and 2025, respectively. There were 2,000 and 125 shares issued during the nine-month periods ended September 30, 2026 and 2025, respectively.

Issuances of Restricted Stock

Restricted stock consists of shares of common stock that are subject to restrictions on transfer and risk of forfeiture until the fulfillment of specified conditions. The fair value of nonvested shares is determined based on the market price of the Company's common stock on the grant date. Nonvested stock is expensed ratably over the term of the restriction period.

During the nine-month periods ended September 30, 2026 and 2025, the Company issued 1,050 and 28,050 shares of restricted common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026), respectively, to certain employees. These shares vest in equal annual installments over a three-year period from the date of grant and had a fair value on the date of issuance of $4,784 and $213,645, respectively.

During the nine-month periods ended September 30, 2026 and 2025, 500 and 2,575 shares of restricted common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026) were forfeited, respectively.

Share based compensation for the nine-month periods ended September 30, 2026 and 2025, was $131,048 and $105,985, respectively.

Issuances to Directors

During the nine-month periods ended September 30, 2026, and 2025, the Company issued 0 and 2,313 shares of common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026) to its directors in lieu of payment of board and committee fees valued at $0 and $20,004, respectively. 

Issuance of Stock Options

During the nine-month periods ended September 30, 2026 and 2025, the Company issued options to purchase 40,000 and 0 shares of common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026) to employees valued at $98,800 and $0, respectively. 

On September 21, 2026, the Company issued a stock option to a new employee to purchase 40,000 shares of common stock with a three-year vesting period, seven-year term, and exercise price of $2.47 per share. 
 
The fair value of the option at date of issuance was estimated on the date of grant at $60,509 using the Black-Scholes option-pricing model with the following assumptions: risk free interest rate: 4.89%, expected life of options in years: 7, expected dividends: 0, volatility of stock price: 109.055%.

Employees’ exercise options

During the nine-month periods ended September 30, 2026 and 2025, no employee stock options were exercised.

Warrants

On August 10, 2026, the Company entered into a warrant exercise agreement (the “2026 Warrant Exercise Agreement”) with an existing institutional investor (the “Investor”) to exercise certain outstanding warrants to purchase an aggregate of 618,334 shares of the Company’s common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026), which were originally issued to the Investor on October 27, 2025 (the “2026 Existing Warrants”). Pursuant to the 2026 Warrant Exercise Agreement, the exercise price of the 2026 Existing Warrants was reduced from $10.20 per share to $4.06 per share. In consideration for the exercise of the 2026 Existing Warrants, subject to compliance with the beneficial ownership limitations included in the 2026 Existing Warrants, the Investor received new unregistered warrants to purchase up to an aggregate of 1,236,668 shares of the Company’s Common Stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026) (the “New Warrants”). The New Warrants have an exercise price of $4.06 per share and include a beneficial ownership limitation that prevents the Investor from beneficially owning more than 4.99% of the Company’s outstanding common stock at any time. The exercise of the New Warrants was conditioned upon approval of the Company’s stockholders as required by applicable rules of the Nasdaq Stock Market, and the New Warrants terminate five years from the date that the Company’s stockholders approve the exercisability of the New Warrants (the “Stockholder Approval”). On  October 30, 2026, the Company obtained the Stockholder Approval, and the New Warrants are now exercisable and expire on October 30, 2031. The gross proceeds to the Company under the Warrant Exercise Agreement were approximately $2.51 million, prior to deducting placement agent fees and estimated offering expenses of approximately $169,000. The Company intends to use the net proceeds for working capital and general corporate purposes.  The Company accounted for the Warrant Exercise Agreement as a warrant inducement.  As a result, the Company recognized a deemed dividend of approximately $4.5 million.

On October 27, 2025, the Company entered into and closed a warrant exercise agreement (the “2025 Warrant Exercise Agreement”) with the Investor to exercise certain outstanding warrants to purchase an aggregate of 309,167 shares of the Company’s common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026), which were originally issued to the Investor on January 15, 2025. Pursuant to the 2025 Warrant Exercise Agreement, the exercise price of these warrants  was reduced from $21.50 per share to $10.20 per share. In consideration for the exercise of  these warrants, subject to compliance with the beneficial ownership limitations included in such warrants, the Investor received new unregistered warrants which were amended and exercised in full pursuant to the 2026 Warrant Exercise Agreement which is more fully described in the preceding paragraph. The gross proceeds to the Company under the 2025 Warrant Exercise Agreement were approximately $3.1 million, prior to deducting placement agent fees and estimated offering expenses. The Company used the net proceeds for working capital and general corporate purposes, including repayment of a portion of the Company’s outstanding secured note.

On January 15, 2025, the Company entered into a warrant exercise agreement (the "January Warrant Exercise Agreement") with the Investor to exercise certain outstanding warrants to purchase an aggregate of 206,111 shares of the Company’s common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026)  at an exercise price of $18.50 per share which were originally issued to the Investor on September 13, 2024. In consideration for the exercise of such warrants, subject to compliance with the beneficial ownership limitations included in such warrants, the Investor received new unregistered warrants which were amended and exercised in full pursuant to the 2025 Warrant Exercise Agreement which is more fully described in the preceding paragraph. The Company realized gross proceeds under the January Warrant Exercise Agreement of approximately $3.8 million, prior to deducting placement agent fees and estimated offering expenses. Net proceeds were used for working capital and general corporate purposes, including repayment of a portion of the 2024 Note.

On September 12, 2024, the Company entered into a Warrant Exercise Agreement ("Inducement Agreement") with the Investor for the immediate exercise of certain outstanding warrants that the Company issued on October 30, 2023. Pursuant to the Inducement Agreement, the Investor agreed to exercise outstanding warrants to purchase an aggregate of 103,056 shares of the Company's common stock (as adjusted to reflect our 1-for-10 reverse stock split, which was effective April 30, 2026) at an amended exercise price of $18.50. The gross proceeds from the exercise of the warrants were approximately $1.9 million, prior to deducting placement agent fees and estimated offering expenses. In consideration for the immediate exercise of these warrants, the Company issued new unregistered warrants which were amended and exercised in full pursuant to the January Warrant Exercise Agreement which is more fully described in the preceding paragraph.

Exchange Agreements

On July 28, 2026,  August 10, 2026 and September 29, 2026, the Company entered into six separate Exchange Agreements with the Lender. At September 30, 2026, the balance of the 2025 Note was repaid in full (see Note 10, Notes Payable).