Ascent Solar Technologies, Inc.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Ascent Solar Technologies, Inc. (the “Company") is focusing on integrating its photovoltaic ("PV") products into scalable and high value markets such as space power beaming, aerospace, satellites, near earth orbiting vehicles, fixed wing unmanned aerial vehicles (“UAV”), aquatic terrestrial, and agrivoltaics. The value proposition of Ascent’s proprietary solar technology not only aligns with the needs of customers in these industries, but also overcomes many of the obstacles other solar technologies face in these unique markets. Ascent has the capability to design and develop finished products for end users in these areas as well as collaborate with strategic partners to design and develop custom integrated solutions for products like satellites, spacecraft, airships and fixed-wing UAVs. Ascent sees significant overlap of the needs of end users across some of these industries and can achieve economies of scale in sourcing, development, and production in commercializing products for these customers.

On June 4, 2025, the Company filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to decrease the number of authorized shares of Common Stock from 500 million to 200 million at a par value of $0.0001.

NOTE 2. BASIS OF PRESENTATION

The accompanying, unaudited, condensed financial statements have been derived from the accounting records of the Company as of September 30, 2025, and December 31, 2024, and the results of operations for the three and nine months ended September 30, 2025, and 2024.

The accompanying, unaudited, condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and footnotes typically found in U.S. GAAP audited annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. The unaudited Condensed Balance Sheet at December 31, 2024, has been derived from the audited financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies were described in Note 2 to the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our accounting policies as of September 30, 2025.

Revenue Recognition:

Product revenue. The Company recognizes revenue for the sale of PV modules sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For product sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product is transferred to the customer.

During the three months ended September 30, 2025 and 2024, the Company recognized product revenue of$28,549 and$8,550, respectively. During the nine months ended September 30, 2025 and 2024, the Company recognized product revenue of$61,134 and$41,893, respectively.

Milestone and engineering revenue. Each milestone and engineering arrangement is a separate performance obligation. The transaction price is estimated using the most likely amount method and revenue is recognized as the performance obligation is satisfied through achieving manufacturing, cost, or engineering targets. No milestone and engineering revenue was recognized during the three and nine months ended September 30, 2025 and 2024.

Government contracts revenue. Revenue from government research and development contracts is generated under terms that are cost plus fee or firm fixed price. The Company generally recognizes this revenue over time using cost-based input methods, which recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Cost based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy long-term government research and development contracts and therefore reflect the performance obligations under such contracts. Costs incurred that do not contribute to satisfying the Company’s performance obligations are excluded from the input methods of revenue recognition as the amounts are not reflective of transferring control under the contract. Costs incurred towards contract completion may include direct costs plus allowable indirect costs and an allocable portion of the fixed fee. If actual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.

No government contract revenue was recognized during the three and nine months ended September 30, 2025 and 2024.

Accounts Receivable. As of September 30, 2025, the Company had$0 in accounts receivable, net andno allowance for doubtful accounts. The Company hadno accounts receivable, net balance andno allowance for doubtful accounts as of December 31, 2024.

Deferred revenue for thenine months ended September 30, 2025 was as follows:

Other Investment: The Company accounts for its investments without a readily determinable fair value that does not qualify for measurement at net asset value as a practical expedient at its cost minus impairment, if any. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company will measure the equity security at fair value as of the date that the observable transaction occurred. The Company reassesses at each reporting period whether the equity investment without a readily determinable fair value continues to qualify to be measured at cost.

As of September 30, 2025, the Company invested $75,000 in a company without a readily determinable value and will make an additional $200,000 investment in four installment payments of $50,000 each payable on or before January 15, 2026, March 15, 2026, May 15, 2026, and July 15, 2026.

Other Assets: Other assets is comprised of the following:

Other Income/(Expense), net: Other income/(expense), net is comprised as follows:

Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned). Diluted earnings per share has been computed by dividing income available to common stockholders adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of warrants, options, restricted stock units and convertible securities using the if-converted or treasury stock method to the extent they are dilutive). Approximately 2,226,000 and 202,000 shares of dilutive shares were excluded from the three months period ended September 30, 2025 and 2024, respectively, EPS calculation as their impact is antidilutive. Approx imately 1,225,000 and 128,000 shares of dilutive shares were excluded from the nine months period ended September 30, 2025 and 2024, respectively, EPS calculation as their impact is antidilutive.

Segment Reporting: The Company hasone reportable segment, PV. The PV segment sells PV products and engineering services and currently, is primarily selling it in North America. The Company’s chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, makes significant operating decisions and assesses the performance of the Company as a single business segment.

The CODM regularly reviews the Company’s company wide Balance Sheet and Statement of Operations to determine how to allocate resources within the Company. The CODM assesses performance and decides how to allocate resources based on Net Income that also is reported on the Statement of Operations and reviews significant expenses as outlined in the Statement of Operations. The CODM uses Net Income to evaluate how to reinvest profits into the PV segment assets, research and development, employees, and other resources. The measure of segment assets is reported on the unaudited condensed Balance Sheet as total assets.

Reclassifications: Certain prior period balances have been reclassified to conform to current period presentation. Specifically, prior year issuance costs for sale of equity was disaggregated to conform to the current period presentation.

Recently Issued Accounting Policies

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures("ASU 2024-03"). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for public entities for annual periods beginning after December

15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Entities are permitted to early adopt. Management is evaluating the impact of this ASU on the Company's financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures("ASU 2023-09"). ASU 2023-09 improves income tax disclosures by requiring public entities annually to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for public entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt. Management is evaluating the impact of this ASU on the Company's financial statements.

NOTE 4. LIQUIDITY, CONTINUED OPERATIONS, AND GOING CONCERN

The Company continued to enter into financing arrangements including the sale of common stock and Series 1C preferred stock during the year ended December 31, 2024 and into 2025 to fund operations.

The Company continues to build industrial scale production capabilities in its Thornton facility and focus on its research and development activities to improve its PV products. The Company does not expect that sales revenue and cash flows will be sufficient to support operations and cash requirements until it has fully implemented our strategy of selling high value PV products and manufacturing at full industrial scale. During the nine months ended September 30, 2025, the Company used$5,097,082 in cash for operations.

Current committed product revenues are not anticipated to result in a positive cash flow position for the next twelve months and although the Company has, as of September 30, 2025, working capital of $504,071, Management does not believe cash liquidity is sufficient for the next twelve months and will require additional financing or committed purchase orders.

The Company continues to accelerate sales and marketing efforts related to its specialty PV application strategies through expansion of its sales and distribution channels. The Company also continues activities to secure additional funding through strategic or financial investors, but there is no assurance the Company will be able to raise additional capital on acceptable terms or at all. If the Company's revenues do not increase rapidly, and/or additional financing is not obtained, the Company will be required to significantly curtail operations to reduce costs and/or sell assets. Such actions would likely have an adverse impact on the Company's future operations.

As a result of the Company’s recurring losses from operations and the potential need for additional financing to fund its operating and capital requirements, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises doubt as to the Company’s ability to continue as a going concern.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These unaudited condensed financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 5. SWITZERLAND ASSETS

On April 17, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Flisom AG (“Seller”), pursuant to which, among other things, the Company purchased certain assets relating to thin-film photovoltaic manufacture and production from Seller (collectively, the “Assets”). The purchase price paid by the Company was $4,083,926 (including $1,283,926 of transaction costs). The Company also entered into a sublease agreement allowing the Company to use the manufacturing facility where the Assets are located.

During the year ended December 31, 2023, Management concluded that these assets were impaired and recognized an impairment loss of $3,283,715. The remaining carrying value of the Assets, as of December 31, 2023, was $786,000. On April 1, 2024, the Company entered into an agreement with the manufacturing facility landlord (“Landlord”) and sold all but one piece of equipment from the Assets to the Landlord for 1 CHF and forgiveness of $221,519 in payables and any potential future claims the manufacturing facility Landlord may have. The carrying value of the Assets sold was $746,000.

At March 31, 2024, the Company designated the Assets as assets held for sale as all of the following criteria have been met: (i) a formal commitment to a plan to sell a property has been made and exercised; (ii) the property is available for sale in its present condition; (iii) actions required to complete the sale of the property have been initiated; (iv) sale of the property is probable and we expect the sale will occur within one year; and (v) the property is being actively marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company recorded the carrying value of the property at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and depreciation of the property ceases. As the estimated fair value of $221,519 and the price the Company sold the Assets for is less than their carrying value, the Company recorded an impairment loss of $524,481 on March 31, 2024. Upon completion of the sale, on April 1, 2024, the Company wrote off the remaining carrying value of the Assets and the payables to the Landlord.

In September, 2023, Flisom filed for bankruptcy in Switzerland. In February, 2024, the Swiss bankruptcy administrator closed the bankruptcy proceedings due to a lack of assets unless a creditor demands that the bankruptcy proceedings be carried out within the specified period and makes an advance to cover the costs. The deadline for creditors to make their demand has lapsed and the bankruptcy proceedings remained closed. As the bankruptcy proceedings are closed, the Company reversed the Swiss liabilities and recognized a gain on extinguishment of liabilities of $541,021 in Other income/(expense) on the unaudited Condensed Statements of Operations during the three months ended September 30, 2024.

NOTE 6. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes property, plant and equipment as of September 30, 2025 and December 31, 2024:

Depreciation expense for the three months ended September 30, 2025 and 2024 was $20,283 and $16,832, respectively. Depreciation expense for the nine months ended September 30, 2025 and 2024 was $54,451 and $50,923, respectively. Depreciation expense is recorded under “Depreciation and amortization expense” in the unaudited Condensed Statements of Operations.

NOTE 7. OPERATING LEASE

The Company’s lease is primarily comprised of manufacturing and office space. This lease is classified and accounted for as an operating lease. The building lease term is for 88 months commencing on September 21, 2020 at a rent of $50,000 per month including taxes, insurance and common area maintenance until December 31, 2020. Beginning January 1, 2021, the rent adjusted to $80,000 per month on a triple net basis and shall increase at an annual rate of 3% per annum until December 31, 2027.

Effective September 1, 2023, the lease was amended to reduce the rentable square feet from approximately 100,000 to approximately 75,000 square feet and the rent and tenant share of expenses were decreased in proportion to the reduction in the rentable square feet.

As of September 30, 2025 and December 31, 2024, assets and liabilities related to the Company’s leases were as follows:

During the three months ended September 30, 2025 and 2024, the Company recorded operating lease expense included in selling, general and administrative expenses of$190,497 and $190,497, respectively. During the nine months ended September 30, 2025 and 2024, the Company recorded operating lease expense included in selling, general and administrative expenses of$571,492 and $571,492, respectively.

Future maturities of the operating lease liability are as follows:

The remaining weighted average lease term and discount rate of the operating leases is 27 months and 7.0%, respectively.

NOTE 8. INVENTORIES

Inventories, net of reserves, consisted of the following at September 30, 2025 and December 31, 2024:

NOTE 9. BRIDGE LOAN

On February 27, 2024, the Company entered into a loan agreement ("Loan 1") with a lender ("Lender") for an aggregate principal amount of $375,000. The Company paid origination fees of $25,000 for net proceeds of $350,000. The discount is recorded as interest expense ratably over the term of the loan. Under Loan 1, the Company made weekly payments of $19,420 for 28 weeks for a total repayment of $543,750. The Company also had an early repayment option where the Company would repay an aggregate of $478,125 if repaid by April 15, 2024.

On April 17, 2024, the Company entered into a new loan agreement ("Loan 2") with the Lender. Under Loan 2, the Company borrowed an aggregate principal amount of $685,000, incurred origination fees of $34,250, and repaid the outstanding balance of Loan 1 of $428,310 for net proceeds of $222,440. Under Loan 2, the Company made weekly payments of $31,000 for 32 weeks for a total repayment of $993,250. This loan was secured by a lien on the Company's assets.

Loan 2 and all related interest payable was repaid in November 2024. The Company recognized interest expense of$139,233 and $499,272 during the three and nine months ended September 30, 2024, respectively.

On April 1 and 2, 2024, the Company closed two loan agreements with a second lender ("Lender 2") for an aggregate principal amount of $180,800. These loans had an original issuance discount of $20,800 for net proceeds of $160,000. These loans matured on January 1, 2025 and the Company repaid all principal and interest due on these loans.

The Company recognized $16,334 and $34,297 in interest expense during the three and nine months ended September 30, 2024, respectively.

NOTE 10. OTHER PAYABLE

On June 30, 2017, the Company entered into an agreement with a vendor (“Vendor”) to convert the balance of their account into a note payable in the amount of $250,000. The note bore interest of 5% per annum and matured on February 28, 2018. On September 25, 2024, the Company entered into a Note Termination and Release Agreement with the Vendor where the Company agreed to a one-time payment of $175,000 in exchange for the termination of the note payable. Upon payment, the remaining note and interest payable were forgiven and the Company recognized a gain on extinguishment of liabilities of $165,548 in Other income/(expense), net on the unaudited Condensed Statements of Operations during the three and nine months ended September 30, 2024.

NOTE 11. CONVERTIBLE NOTES

On December 19, 2022, the Company entered into a Securities Purchase Contract (the “Securities Purchase Contract”) with two institutional investors (each, an “Investor” and collectively, the “Investors”) for the issuance to the Investors of $15,000,000 in aggregate Convertible Notes (the "Convertible Notes") at a purchase price of $13,500,000. The Convertible Notes bore 4.5% interest per annum, payable, at the option of the Company, in kind or in cash, subject to certain conditions, and was convertible, at the option of the holders from time to time, into shares of the Company’s Common Stock, or repayable in cash at maturity. The Convertible Notes matured on June 19, 2024.

The Convertible Notes could be converted, at the option of the Investors, into shares of the Company’s Common Stock at a conversion price, which is equal to the lower of (1) a 30% premium to the average of the five most recent daily volume weighted average price (“VWAPs”) of the Common Stock as measured on the day prior to the issuance of the Registered Advance Notes (the “Fixed Conversion Price”) and (2)92.5% of the three lowest VWAPs of the Common Stock on the 10 trading days preceding delivery of a Conversion Notice by an Investor. The conversion price could not be less than $11,400 in accordance with the rules and regulations of Nasdaq.

The following table provides a summary of the activity of the Company's Convertible Notes:

The note matured on June 19, 2024 and the Company paid the remaining principal and interest payable. During the nine months ended September 30, 2024, $400,000 of principal was converted for 6,184 shares of common stock. During the nine months ended September 30, 2024, the Company had interest expense of $463,397, of which, $19,260 was due to accretion of discount on the note.

If the conversion price was less than the floor price, the Company recorded a Conversions Payable that represented the economic difference between the applicable conversion price of the Convertible Notes and floor price. This amount is payable either in shares valued as the VWAP on the conversion day or in cash. If the VWAP on the conversion day is less than the floor price, then the economic different between the conversion day VWAP and the floor price becomes payable in cash and was recorded as Cash payable. During the nine months ended September 30, 2024, $1,279,782 of conversions payable was converted into 17,934 shares of common stock and $199,997 of Cash payable. The Cash payable was paid in April 2024.

In addition to the Convertible Notes, the Company also issued to the Investors certain common stock warrants (the “Adjusting Warrants”). The Adjusting Warrants have certain “full ratchet” anti-dilution adjustments that are triggered when the Company issued securities with a purchase or conversion, exercise or exchange price that is less than the exercise price of the Adjusting Warrants then in effect at any time. Under the full ratchet anti-dilution adjustments, if the Company issued new securities at a price lower than the then applicable exercise price, (i) the exercise price is reduced to the lower new issue price and (ii) the number of warrant shares is proportionately increased. The Adjusting Warrants have been previously adjusted following past issuances of Company securi ties. On April 18, 2024, there were approximately 67,000 Adjusting Warrants exercisable at an exercise price of $147.27, that were repurchased for $3.6 million cash and subsequently cancelled. Additionally, on April 12, 2024, the Company issued approximately 85,500 warrants in aggregate at an exercise price of $11.68 per warrant in connection with repurchasing the Adjusting Warrants. The Company recorded an expense of $743,462 as Warrant settlement expense on the unaudited Condensed Statement of Operations and Comprehensive Income. The expense represents the estimated fair value of the warrants at the issuance date and was determined using the Black Scholes model using the following inputs:

NOTE 12. SERIES A PREFERRED STOCK

Holders of Series A Preferred Stock are entitled to cumulative dividends at a rate of 8% per annum when and if declared by the Board of Directors at its sole discretion. The dividends may be paid in cash or in the form of common stock (valued at 10% below market price, but not to exceed the lowest closing price during the applicable measurement period), at the discretion of the Board of Directors. The dividend rate on the Series A Preferred Stock is indexed to the Company's stock price and subject to adjustment.

The Series A Preferred Stock may be converted into shares of common stock at the option of the Company if the closing price of the common stock exceeds $23.2 billion, adjusted for reverse stock splits, fortwenty consecutive trading days, or by the holder at any time. The Company has the right to redeem the Series A Preferred Stock at a price of $8.00 per share, plus any accrued and unpaid dividends, plus the make-whole amount (if applicable). At September 30, 2025, the preferred shares were not eligible for conversion to common shares at the option of the Company. The holder of the preferred shares may convert to common shares at any time. After making adjustment for the Company’s prior reverse stock splits, all 48,100 outstanding Series A preferred shares are convertible into less thanone common share. Upon any conversion (whether at the option of the Company or the holder), the holder is entitled to receive any accrued but unpaid dividends.

Except as otherwise required by law (or with respect to approval of certain actions), the Series A Preferred Stock shall have no voting rights. Upon any liquidation, dissolution or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Preferred Stock shall be entitled to receive, pari passu with any distribution to the holders of common stock of the Company, an amount equal to $8.00 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

As of September 30, 2025, there were 48,100 shares of Series A Preferred Stock outstanding and accrued and unpaid dividends of$599,647.

NOTE 13. SERIES 1C PREFERRED STOCK

On October 17, 2024, the Company entered into a securities purchase agreement with accredited investorsfor a convertible preferred stock financing for approximately $1.9 million of gross proceeds and will issue approximately 1,900 shares of Series 1C convertible preferred stock (“Series 1C Preferred Stock”) at a purchase price of $1,000 per share. Approximately 75% of these securities were purchased by officers, directors and advisory board members of the Company. Through September 30, 2025, the Company received approximately $815,000 of gross proceeds and continues to work with the investors to collect the remaining balance.

Holders of the Series 1C Preferred Stock are entitled to dividends on the per share stated value in the amount of 10% per annum, payable quarterly. The dividend rate increases to 15% if any of the Series 1C Preferred Stock remains outstanding on or after October 17, 2027. Unless the Company elects to pay dividends on the Series 1C Preferred Stock in cash, the Company will cumulate the dividends, in which case the accrued dividend amount shall be added to the stated value of each share of Series 1C Preferred Stock. The Company had accrued dividends of$77,341 as of September 30, 2025. The stated value was approximately$1,957,341 as of September 30, 2025.

The Series 1C Preferred Stock is convertible into common stock at any time after April 17, 2025 at the option of the holder at an initial fixed conversion price of $2.50 per share of common stock; however, the holder may not convert any portion to the extent that the holder would beneficially own more than 4.99% of the Company's outstanding shares of Common Stock outstanding immediately after giving effect to the conversion.

If at any time the closing sale price of the Company’s common stock equals at least 300% of the conversion price for the most recent 20 consecutive trading days, the Company shall have the right to redeem all, but not less than all, of the Series 1C Preferred Stock then outstanding in cash at a price equal to 110% of the stated value of the shares being redeemed.

Upon our liquidation, dissolution or winding up, holders of Series 1C Preferred Stock shall be entitled to receive in cash out of the assets of the Company, before any amount shall be paid to the holders of any of shares of common stock, an amount per share of Series 1C Preferred Stock equal to the greater of (A)110% of the stated value of such preferred share and (B) the amount per share such holder would receive if such holder converted such preferred share into common stock immediately prior to the date of such payment.

On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series 1C Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the outstanding shares of Series 1C Preferred Stock held by such holder are convertible as of the record date (but only after giving effect to the maximum percentage conversion limitations referred to above). Except as provided by law or by the other provisions of the Series 1C Preferred Stock, holders of Series 1C Preferred Stock shall vote together with the holders of common stock as a single class and on an as-converted to common stock basis.

NOTE 14. STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

At September 30, 2025, the Company had 200 million shares of common stock, $0.0001 par value(“Common Stock”), authorized for issuance. Each share of Common Stock has the right toone vote. As of September 30, 2025, the Company had 3,479,149 shares of Common Stock outstanding. The Company has not declared or paid any dividends related to the Common Stock during the nine months ended September 30, 2025 and 2024.

Public Offering

On June 30, 2025, the Company closed a public offering (the “Offering”) and issued an aggregate of (i)507,000 shares (the “Shares”) of common stock, par value $0.0001 per share, of the Company, (ii)493,000 pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 493,000 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (iii)1,000,000 warrants to purchase up to 1,000,000 shares of Common Stock (“Warrants”). Each Share or Pre-Funded Warrant was sold together withone Warrant to purchaseone share of Common Stock. The combined offering price for each Share and Warrant was $2.00, and the combined offering price for each Pre-Funded Warrant and accompanying Warrant was $1.9999, resulting in gross proceeds of approximately $2.0 million (net proceeds of approximately $1.6 million), of which, $260,000 was received on July 1, 2025. The Pre-Funded Warrants have an exercise price of $0.0001 per share, be exercisable immediately and will expire when exercised in full. Each Warrant has an exercise price of $2.00 per share and will be immediately exercisable. The Warrants will expire on the five-year anniversary of the date of issuance.

Pursuant to an engagement agreement (as amended, the “Engagement Agreement”) with H.C. Wainwright & Co., LLC (the “Placement Agent”), the Company paid the Placement Agent in connection with the Offering (i) a cash fee equal to 7.0% of the aggregate gross proceeds received in the Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds received in the Offering, and (iii) reimbursement of up to $100,000 forlegal fees and expenses and other out of pocket expenses. Also pursuant to the Engagement Agreement, the Company, in connection with the Offering, issued to the Placement Agent or itsdesignees warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 70,000 shares of Common Stock (the “Placement Agent Warrant Shares”). The Placement Agent Warrants have an exercise price of $2.50 per share (which represents 125% of the combined public offering price per Share and accompanying Warrants), will expire on June 27, 2030, and will be exercisable upon issuance.

The $2.0 million was allocated between the Common Stock or Pre-Funded Warrants and Common Stock Warrants purchased based on the relative fair value of these instruments. The fair value of the Common Stocks or Pre-Funded Warrants was determined using the closing price of the stock at close of the Offering (Level 1 on the fair value hierarchy) and the fair value of the Warrants was determined using the Black Scholes model using the following inputs (Level 2 on the fair value hierarchy):

All 493,000 Pre-Funded Warrants were exercised during the nine months ended September 30, 2025, andno Pre-Funded Warrants remain outstanding.

At The Market Offering

On May 16, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), to sell shares of its common stock, par value $0.0001 per share (the “Shares”), through an “at the market offering” program under which Wainwright will act as sales agent. The sales, if any, of the Shares made under the ATM Agreement will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq Capital Market or on any other existing trading market for the Company’s common stock. The Company will pay Wainwright a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of Common Stock and will also reimburse Wainwright for certain specified expenses inconnection with entering into the ATM Agreement, including certain fees and out-of-pocket expenses of its legal counsel.

During the nine months ended September 30, 2025, the Company sold 1,022,434 shares of common stock at an average price of $2.53 per share, resulting in aggregate gross proceeds of approximately $2.6 million.

Preferred Stock

At September 30, 2025, the Company had 25 million shares of preferred stock, $0.0001 par value, authorized for issuance. Preferred stock may be issued in classes or series. Designations, powers, preferences, rights, qualifications, limitations and restrictions are determined by the Company’s Board of Directors.

Warrants

As of September 30, 2025, there are approximately 1,213,000 outstanding warrants with exercise prices between $2 and $74,086 per share.

Series A Preferred Stock

Refer to Note 12 for information on Series A Preferred Stock.

Series 1C Preferred Stock

Refer to Note 13 for information on Series 1C Preferred Stock.

NOTE 15. SHARE-BASED COMPENSATION

In January 2024, the Company granted 4,590 shares of restricted stock units to employees and directors. One third of these shares vested on March 31, 2024 and one third vested on January 1, 2025. The remaining unvested shares will vest on January 1, 2026. The Company also granted members of our advisory board an aggregate of 200 shares of restricted stock units. The advisory shares originally vested pro rata on June 30, 2024 and January 1, 2025.

The Company had a total of 1,530 unvested units as of September 30, 2025 that are expected to vest in the future. Total unrecognized share-based compensation expense from the remaining unvested restricted stock as of September 30, 2025 was approximately $168,000 and is expected to be recognized over three months. The following table summarizes non-vested restricted stock and the related activity as of September 30, 2025:

The fair values of the respective vesting dates of RSUs were approximately $5,100 and$7,143 for the nine months ended September 30, 2025 and 2024, respectively.

In August 2024, the Company granted 124,850 stock options expiring 10 years from the date of grant to employees, directors, and advisory board members. One third of these options vested on September 15, 2024, and another one third vested on August 21, 2025. The remaining unvested options will vest on August 21, 2026.

The weighted average remaining contractual term for these options at September 30, 2025, was approximately 9 years. Based on the Black-Scholes option pricing model, the options estimated weighted average fair values at the date of grant of $4.15 per share. The fair values were estimated using the following weighted average assumptions:

In June 2025, the Company granted 506,000 stock options terminating 10 years from the date of grant to employees, directors, and advisory board members. One third of these options vested on June 20, 2025. The remaining unvested options vest pro rata on May 28, 2026 and May 29, 2027.

The weighted average remaining contractual term for these options at September 30, 2025, was approximately 9.7 years. Based on the Black-Scholes option pricing model, the options estimated weighted average fair values at the date of grant of $1.63 per share. The fair values were estimated using the following weighted average assumptions:

The Company had a totalof 379,530 unvested options as of September 30, 2025 that are expected to vest in the future. Total unrecognized share based compensation expense from the remaining unvested options as of September 30, 2025 was approximately$511,256 and is expected to be recognized over approximately 1.7 years. The Company had approximately

251,320 exercisable options as of September 30, 2025. The following table summarizes options activity as of September 30, 2025:

The Company utilized the simplified method for estimating the stock options granted as the Company has experienced significant changes in its business and the historical data may not provide a reasonable basis upon which to estimate expected term.

NOTE 16. COMMITMENTS AND CONTINGENCIES

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or in certain instances provide reasonable ranges of potential losses. However, as of the date of this report, the Company believes that none of these claims will have a material adverse effect on its financial position or results of operations. In the event of unexpected subsequent developments and given the inherent unpredictability of these legal proceedings, there can be no assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s financial position or results of operations in particular quarterly or annual periods.