Preferred Stock and Common Stock

3 Months Ended

Mar. 31, 2026

Equity [Abstract]

Preferred Stock and Common Stock

Note 8 – Preferred Stock and Common Stock

Stock reverse split

On September 19, 2025, the Company effected a 1-for-3 reverse stock split (the “Reverse Stock Split”), pursuant to which every three shares of the Company’s issued and outstanding common stock were combined into one share of common stock. The par value per share of the common stock remained unchanged at $0.0001. The total number of issued and outstanding shares of common stock was reduced proportionately, and the number of issued preferred shares, warrants, and stock options were adjusted on the same basis. The Reverse Stock Split did not affect the Company’s total stockholders’ deficit and the number of authorized shares remained unchanged. All share amounts have been retroactively adjusted, as if the Reverse Stock Split had occurred at the beginning of all periods presented.

Composition of stock capital

The stock capital of the Company as of March 31, 2026 and December 31, 2025 is comprised of stock of $ 0.0001 par value each, as follows:

	March 31, 2026				December 31, 2025
	Authorized		Issued and outstanding		Authorized		Issued and outstanding
Common stock
Common stock voting		200,000,000		21,074,608		200,000,000		10,315,901
Common stock non-voting		50,000,000		—		50,000,000		3,580,499
Total common stock		250,000,000		21,074,608		250,000,000		13,896,400
Preferred stock
Series B-1 preferred stock		25,356,256		8,204,944		25,356,256		8,204,944
Series B-2 preferred stock		27,463,149		1,520,962		27,463,149		2,128,737
Series B-3 preferred stock		21,453,390		5,094,036		21,453,390		7,151,139
Series CF-1 preferred stock		—		—		14,128,084		—
Series CF-2 preferred stock		—		—		2,900,000		—
Series F preferred stock		10,000		10,000		10,000		10,000
Non-designated preferred stock		74,838,083		—		57,127,229		—
Total preferred stock		149,120,878		14,829,942		148,438,108		17,494,820

Common Stock

Common Stock confer upon their holders the right, among others, to participate and vote in the Company’s stockholders meeting, participation in the Company’s distributable earnings and participation in the distribution of the Company’s assets upon its liquidation. The stockholders’ liability is limited to the redemption of the par value of their stock.

Preferred Stock

Preferred stock has been designated into several classes, consisting of Series B-1 Preferred Stock, Series B-2 Preferred Stock, Series B-3 Preferred Stock, Series CF-1 Preferred Stock, Series CF-2 Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.

The Series C Preferred Stock and the Series D Preferred Stock are not mandatorily redeemable; however, they are contingently redeemable upon the occurrence of certain events that are not solely within the control of the Company. Accordingly, they are classified as temporary equity (mezzanine equity) in the Company’s consolidated balance sheets.

All issued and outstanding shares of the Series CF-1 Preferred Stock, Series CF-2 Preferred Stock and Series E Preferred Stock were converted into shares of the Company’s common stock. As a result, no shares of such series remained issued or outstanding as of March 31, 2026, and the Company withdrew the related Certificates of Designation.

Series B-1, B-2, and B-3 Preferred Stock

Voting rights:

The holders of Series B Preferred Stock are entitled to one vote for each share of Common stock on an as-converted basis and shall vote together, along with holders of other Preferred Stock entitled to vote thereon with the holders of Common Stock as a single class. The holders of the Series B Preferred stock shall be entitled to vote on all matters on which holders of Common stock are entitled to vote.

Conversion:

Each share of Series B Preferred Stock shall be convertible, at the option of the holder, at any time after the date on which such stock was issued by the Company, into such number of fully paid and non-assessable Common Stock as is determined by dividing the applicable original issuance price by the applicable conversion price in effect at the time of conversion. Each share of Series B Preferred Stock shall automatically be converted into Common Stock immediately upon the earlier of (i) the closing of a Qualified IPO (as such term is defined in the applicable certificate of designation), as such or (ii) written consent or agreement of the majority of the outstanding shares of Preferred Stock voting together on an as-converted to Common Stock basis that are entitled to vote on such matter. In the event that the Company issues any new securities, for a consideration per share lower than the applicable conversion price of the applicable Series B Preferred Stock, the applicable conversion price for the applicable Series B Preferred Stock shall be readjusted to reflect the lower consideration paid for the applicable Series B Preferred Stock as set forth in the applicable certificate of designation.

Liquidation preference:

The Company’s Series B Preferred Stock is entitled to a non-participating liquidation preference. In the event of any liquidation, dissolution or winding up of the Company, assets or proceeds shall be distributed as follows: (i) the holders of Series B-1 Preferred Stock and Series B-2 Preferred Stock (along with holders of Series CF Preferred Stock on a pari passu basis) shall be paid before any payment is paid to the remaining stockholders (other than holders of Series C Preferred Stock), of an amount per share equal to two (2) times their original issue price and any unpaid dividend and subsequently (ii) the holders of Series B-3 Preferred Stock shall be paid before any payment is paid to holders of Common Stock and Series F Preferred Stock, of an amount per share equal to two (2) times their original issue price and any unpaid dividend.

Series C Preferred Stock

Voting rights:

The holders of Series C Preferred Stock shall have no voting rights, except as required by law and as expressly provided in the certificate of designation.

Conversion:

Shares of Series C Preferred Stock have a stated value of $10.00 per shares and are convertible to the common stock at a price of $2.0265 per share of common stock. Conversions of Series C Preferred Stock are limited such that no conversion will be allowed to the extent that, immediately following the conversion, the holder, its affiliates or any other person acting as a group, would beneficially own in excess of 9.99% of the Company’s issued and outstanding common stock

Liquidation preference:

The holders of Series C Preferred Stock are entitled to a non-participating liquidation preference. In the event of any liquidation, dissolution or winding up of the Company, assets or proceeds shall be distributed to the holders of Series C Preferred Stock first who shall be paid before any payment is paid to the remaining stockholders, of an amount per share equal to the greater of (i) 200% of stated value (as defined therein) or (ii) the amount the holder would receive if such holder converted such Series C Preferred Stock into Common Stock immediately prior to the date of such payment.

Dividends:

Holders of Series C Preferred Stock are entitled to dividends payable on the stated value thereof, commencing from on the issuance date, at an annual rate of 8%, payable monthly in arrears on the stated value.

Series D Preferred Stock

Voting rights:

The holders of Series D Preferred Stock shall have no voting rights, except as required by law and as expressly provided in the certificate of designation.

Conversion:

Shares of Series D Preferred Stock have a stated value of $10.00 per shares and are convertible to the common stock at a price of $12.35 per share of common stock. Conversions of Series C Preferred Stock are limited such that no conversion will be allowed to the extent that, immediately following the conversion, the holder, its affiliates or any other person acting as a group, would beneficially own in excess of 9.99% of the Company’s issued and outstanding common stock. See also note 12.

Liquidation preference:

The holders of Series D Preferred Stock are entitled to a non-participating liquidation preference. In the event of any liquidation, dissolution or winding up of the Company, assets or proceeds shall be distributed to the holders of Series D Preferred Stock first who shall be paid before any payment is paid to the remaining stockholders, of an amount per share equal to the greater of (i) 200% of stated value (as defined therein) or (ii) the amount the holder would receive if such holder converted such Series D Preferred Stock into Common Stock immediately prior to the date of such payment.

Dividends:

Holders of Series D Preferred Stock are entitled to dividends payable on the stated value thereof, commencing from on the issuance date, at an annual rate of 8%, payable monthly in arrears on the stated value.

Series F Preferred Stock

Voting rights:

The holders of Series F Preferred Stock are entitled to cast 40,000 votes for each one (1) share of Series F Preferred Stock and shall vote together, along with holders of other Preferred Stock entitled to vote thereon, with the holders of Common Stock as a single class. The holders of the Series F Preferred stock shall be entitled to vote on all matters on which holders of Common stock are entitled to vote.

Conversion:

Each share of Series F Preferred Stock shall be convertible, at the option of the holder, at any time after the date on which such stock was issued by the Company, into one (1) share of fully paid and non-assessable Common Stock.

Liquidation preference:

The Company’s Series F Preferred Stock are entitled to participate in any distribution out of the assets of the Company on an equal basis per share with the holders of the Common Stock. For the purposes of such distribution, holders of Series F Preferred Stock shall be treated as if all shares of Series F Preferred Stock had been converted to Common Stock immediately prior to the distribution.

Dividends

During the three months ended March 31, 2026, the Company recorded total dividends of $136. As of March 31, 2026, accrued dividends payable were $197.

Issuance of Preferred Stock and Warrants

On June 2025, the Company designated a new class of Series F Preferred Stock consisting of 10,000 authorized shares (the “Series F Preferred Stock”). The Series F Preferred Stock were issued through the conversion of an equivalent number of shares of the Company’s founder and CEO Common Stock on a pre–reverse stock split basis (was not affected by the subsequent reverse stock split) and is entirely held by him. Each share of Series F Preferred Stock entitles the holder to cast 40,000 votes on all matters submitted to the Company’s shareholders or acted upon by written consent. In addition, each three shares is convertible, at the option of the holder, into one share of the Company’s Common Stock. The conversion of the founder and CEO’s Common Stock into Series F Preferred Stock was accounted for as an equity reclassification, as it did not result in a change in control or economic ownership. Accordingly, no gain or loss was recognized.

On June 2025, the Company entered into a Series C Preferred Stock Purchase Agreement (the “Series C SPA”) with a new investor. According to the Series C SPA, Company issued an aggregate of 329,671 shares of Series C Preferred Stock, par value $0.0001 per share, together with warrants to purchase 4,000,000 shares of common stock, for an aggregate consideration of $3,000. Series C Preferred Stock features a stated value of $10.00 per share and is convertible to common stock at a price of $2.0265 per share. The warrants are exercisable at a price of $3.2475 per share, with expiration dates as follows: 1,000,000 warrants have an expiration date of eight (8) months, 1,000,000 warrants have an expiration date of sixteen (16) months, and 2,000,000 warrants have an expiration date of two (2) years from the issuance date. See also note 12.

On July 2025, the Company entered into a listing agreement, under regulation Crowdfunding (also known as Reg CF), whereby the Company agrees to sell securities to eligible investors through the funding portal through special purpose vehicle. On September 2025 the Company closed the financing round, raising a total of $819 and issued 212,033 Series CF-2 Preferred Stock with par value of $0.0001 each, at a price per stock of $2.1234; The total fundraising fees recorded were $56.

On August 6, 2025, the Company entered into a Securities Purchase and Conversion Agreement. Pursuant to the Agreement, the Company converted 50% of its outstanding loan obligations, totaling approximately $6.8 million, into 682,770 shares of its Series E Convertible Preferred Stock (“Series E Preferred”), stated value $10.00 per share. The Series E Preferred is convertible into shares of the Company’s common stock and accrues dividends on the stated value thereof at the same rate as the original loan. Dividends are payable, at the Company’s election, in cash or shares of common stock. The initial conversion price for the Series E Preferred is $4.62 per share. During the three months ended March 31, 2026, the Company issued 22,109 shares of its common stock as stock dividends, and as of March 31, 2026, an aggregate of 121,457 shares of common stock had been issued as stock dividends. See also note 6.

On October 15, 2025, all outstanding shares of the Company’s Series CF-1 Preferred Stock and Series CF-2 Preferred Stock were converted into shares of non-voting common stock. Subsequently, on February 2, 2026, all outstanding shares of non-voting common stock were converted into shares of the Company’s voting common stock.

On October 27, 2025, the Company entered into a Securities Purchase Agreement (the “SPA”) for the issuance and sale of a total of 549,451 shares of Series D Preferred Stock and warrants to the purchase a total of 25,000,000 shares of common stock. At the initial closing under the SPA on October 27, 2025, the Company issued 109,891 shares of Series D Preferred Stock for consideration of $1,000, together with warrants to purchase a total of 25,000,000 shares of common stock exercisable at a price of $12.35 per share (the “Warrants”), with expiration dates as follows: 16,000,000 warrants have an expiration date of nine (9) months, 3,000,000 warrants have an expiration date of sixteen (16) months, and 6,000,000 warrants have an expiration date of two (2) years from the issuance date. The Warrants may not be exercised on a cashless basis unless, upon the listing of the Company’s common stock on any recognized stock exchange pursuant to an effective registration statement, there is no effective registration statement covering, or no current prospectus available for, the free resale of the warrant exercise shares by the holder. On December 2025, the Company completed three additional closings under the SPA for an aggregate consideration of $1,050, pursuant to which the Company issued an additional 115,385 shares of Series D Preferred Stock. On January 12, 2026, at a fifth closing under the SPA, the Company issued 93,407 additional shares of Series D Preferred Stock for additional consideration of $850. On January 30, 2026, at a sixth closing under the SPA, we issued 131,867 additional shares of Series D Preferred Stock for consideration of $1,200. On February 4, at a final closing under the SPA, the Company issued 98,902 additional shares of Series D Preferred Stock for consideration of $900. Total issuance costs related to the Series D Preferred Stock were $506. See also note 12.

On November 3, 2025, an aggregate of 7,025,651 shares of Series B-2 Preferred Stock were converted into common stock. On November 3, 2025, an aggregate of 7,025,651 shares of Series B-2 Preferred Stock were converted into common stock. In addition, on February 4, 2026, an additional 607,775 shares of Series B-2 Preferred Stock were converted into common stock. All such conversions were completed in accordance with the original terms of the applicable agreements, and accordingly, no gain or loss was recognized upon conversion.

On February 4, 2026, the Company issued 161,963 shares of common stock to certain service providers in exchange for services rendered, for aggregate non-cash consideration of $2,035,000, based on the market value of the common stock at the time of the agreement.

On February 4, 2026, pursuant to the terms of an engagement agreement entered into in connection with the Company’s direct listing, upon (i) the successful consummation of the direct listing and (ii) the closing of financings with aggregate gross proceeds of at least $5.0 million, the Company issued 418,219 shares of common stock to certain designees, representing 0.5% of the Company’s outstanding common stock on a fully diluted basis. The shares were issued as consideration for investment banking and advisory services and had an aggregate value of approximately $33,801,000, based on an implied value of $33.00 per share. The fair value of the shares issued was recorded as an increase to additional paid-in capital, with an offsetting reduction to additional paid-in capital as equity issuance costs related to the direct listing.

On February 5, 2026, all 682,770 outstanding shares of the Company’s Series E Convertible Preferred Stock were converted into 1,477,857 shares of the Company’s common stock in accordance with the terms of the Series E Preferred. Following the conversion, no shares of Series E Preferred remained outstanding.

On March 1, 2026, the Company entered into Amendment No. 1 (the “Amendment”) to a Warrant to Purchase Shares of Common Stock originally issued on October 27, 2025 (the “Warrant”). The Warrant provides for the purchase of up to 16,000,000 shares of the Company’s common stock at an exercise price of $12.35 per share and expires on July 27, 2026. Pursuant to the Amendment, the exercise price for 12,000,000 shares underlying the Warrant was temporarily reduced as follows: (i) $2.25 per share for 4,500,000 shares for a period of 60 days; (ii) $2.75 per share for 3,750,000 shares for a period of 60 days; and (iii) $3.25 per share for 3,750,000 shares for a period of 75 days. Upon expiration of the reduced exercise price periods, the exercise price for the applicable warrants will revert to the original exercise price of $12.35 per share. All other terms and conditions of the Warrant remain unchanged, and the Amendment was effected in accordance with the terms of the applicable agreements; accordingly, no gain or loss was recognized in connection with the transaction. See also note 12.

On March 3, 2026 and March 17, 2026, an aggregate of 2,057,102 shares of Series B-3 Preferred Stock were converted into common stock.

During the three months ended March 31, 2026, holders of Series D preferred stock converted an aggregate of 24,000 shares of Series D preferred stock with a stated value of $10.00 per share into 19,433 shares of common stock at a conversion price of $12.35 per share. In addition, holders of Series C preferred stock converted an aggregate of 277,171 shares of Series C preferred stock with a stated value of $10.00 per share into 1,367,742 shares of common stock at a conversion price of $2.0265 per share.

During the three months ended March 31, 2026, the Company issued 8,098 shares of common stock upon the exercise of warrants from the Series D financing, resulting in aggregate proceeds of approximately $100,010. In addition, the Company issued 1,033,335 shares of common stock upon the exercise of Series C warrants at an exercise price of $3.2475 per share, resulting in aggregate proceeds of approximately $3.35 million. The Company incurred issuance costs of approximately $242,000 related to the warrant exercises.