What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 296 added, 382 removed, 425 unchanged (61% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

Current Assets

5 unchanged sentences

Prepaid expenses, long term

Digital Assets

Liabilities and Stockholders’ Equity

8 unchanged sentences

Total Liabilities

Commitments and Contingencies

Stockholders’ Equity

5 unchanged sentences

no shares issued and outstanding

Series C Preferred Stock, $ 0.0001 par value;

Series C Convertible Preferred Stock, $ 0.0001 par value;

100,000 shares authorized;

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Additional paid in capital

Stock payable

Accumulated deficit

3 unchanged sentences

Total Liabilities and Stockholders’ Equity

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

ENDRA Life Sciences Inc.

Condensed Consolidated Statement of Operations

Three Months Ended

Nine Months Ended

September 30,

Operating Expenses

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( 1,469,282 )

( 4,141,075 )

( 6,520,408 )

Other Income (Expenses)

Other income (expense)

Warrant expense

( 7,323,685 )

Other (expenses) income

Digital asset staking compensation

Unrealized gain on change in fair value of digital assets

Realized gain on change in fair value of digital assets

Changes in fair value of warrant liability

Gain or Loss on settlement of warrant exercise

Total other income (expenses)

Total other (expenses) income

Loss from operations before income taxes

1 unchanged sentence

( 1,036,330 )

( 3,858,201 )

( 7,358,943 )

Provision for income taxes

1 unchanged sentence

$ ( 1,036,330 )

$ ( 3,858,201 )

$ ( 7,358,943 )

Net loss per share – basic and diluted

Weighted average common shares – basic and diluted

The accompanying notes are an integral part of

these financial statements.

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

ENDRA Life Sciences Inc.

Condensed Consolidated Statements of Stockholders’

Nine Months Ended September 30,2024

Three Months Ended March 31, 2025

Series A Convertible

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$ 105,998,412

Preferred stock conversion to common stock

$ ( 103,438,099 )

Common stock issued for cash

Common stock issued for warrant exercise

Common stock issued for cashless warrant exercise

Fair value of vested common stock

Fair value of vested stock options

Stock payable towards preference dividend

( 1,036,330 )

Balance as of September 30, 2024

Balance as of March 31, 2025

$ 106,227,259

$ ( 104,474,429 )

Nine Months Ended September 30,2025

Three Months Ended March 31, 2026

Series A Convertible

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Fair value of vested stock options

Fair value of vested restricted stock units

( 3,858,201 )

Balance as of September 30,2025

$ 107,467,603

$ ( 107,296,300 )

Three Months Ended September 30,2024

Series A Convertible

Series B Convertible

Preferred Stock

Stockholders’

Balance as of June 30, 2024

$ 105,928,915

$ ( 96,935,005 )

Common stock issued for warrant exercise

Fair value of vested stock options

Stock payable towards preference dividend

( 2,354,090 )

Balance as of September 30,

$ 105,893,728

$ ( 99,289,095 )

Three Months Ended September 30,2025

Series A Convertible

Series B Convertible

Preferred Stock

Stockholders’

Balance as of June 30, 2025

$ 107,173,418

$ ( 105,700,341 )

Common stock issued for cash

Fair value of vested stock options

Fair value of vested restricted stock awards

Fair value of vested restricted stock units

1 unchanged sentence

( 1,311,433 )

Balance as of September 30,2025

Balance as of March 31, 2026

$ 113,563,705

3 unchanged sentences

ENDRA Life Sciences Inc.

Condensed Consolidated Statements

of Cash Flows

September 30,

Condensed Consolidated

Statements of Cash Flows

Cash Flows from Operating Activities

3 unchanged sentences

Depreciation and amortization

Fixed assets write off

Inventory reserve

Stock compensation expense

Amortization of right of use assets

Warrant expense

Digital asset staking compensation

Unrealized gain on change in fair value of digital assets

Realized gain on change in fair value of digital assets

Changes in fair value of warrant liability

( 3,341,829 )

Gain or Loss on settlement of warrant exercise

( 3,071,252 )

Changes in operating assets and liabilities:

(Increase) Decrease in prepaid expenses

Increase in inventory

Decrease/(increase) in prepaid expenses

Increase/(decrease) in accounts payable and accrued liabilities

Decrease in lease liability

Increase/(decrease) in lease liability

Net cash used in operating activities

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Purchases of fixed assets

Proceeds from sale of fixed assets

Net cash used in investing activities

Sale of Digital Intangible Assets

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

Proceeds from issuance of common stock

Proceeds from warrant issuances and exercises

Proceeds from issuance of cashless warrants

Repayment of loan

Proceeds from issuance of common stock for cash

Net cash provided by financing activities

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Income tax paid

Supplemental disclosures of non-cash items

Stock dividend payable

Right of use asset

Lease liability

Cashless Warrants

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial

ENDRA Life Sciences Inc.

Notes to Condensed Consolidated Financial Statements

For the nine months ended September 30, 2025

For the three months ended March 31, 2026 and

Note 1 - Nature of the Business

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and management and GLP-1 drug eligibility and management in circumstances where other technologies are unavailable or impractical.

In 2025, the Company adopted a digital asset treasury

(“DAT”) strategy under which the principal holding in its treasury reserve on its balance sheet will be allocated to cryptocurrency,

and specifically a strategy of holding one to five decentralized finance digital assets.

Additionally, the Company intends to monitor

ongoing developments in the regulatory environment around cryptocurrencies, including pending federal legislation, and may modify or expand

its DAT strategy to the extent it determines compliant with federal rules and regulations and not giving rise to a requirement that the

Company register as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”).

ENDRA was incorporated on July 18, 2007 as a Delaware

Note 2 - Summary of Significant Accounting

In 2025, the Company expanded its business strategy

to include a digital asset treasury (“DAT”) initiative, managed in collaboration with Arca Investment Management (“Arca”),

which seeks to optimize capital preservation and generate non-dilutive returns through investments in decentralized finance (“DeFi”)

This financial strategy operates in tandem with the Company’s core medical technology mission:

the commercialization of

the TAEUS platform via a recurring subscription model, with a specific focus on the burgeoning GLP-1 and metabolic disease markets.

ENDRA was incorporated on July 18, 2007 as a Delaware corporation.

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

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management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for

the year ending December 31, 2025.

The balance sheet at September 30, 2025 has been derived from the audited financial statements at that

For further information, refer to the financial statements and footnotes thereto included in the Company’s annual financial

statements for the twelve months ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC

on March 31, 2025.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the

year ending December 31, 2026.

The balance sheet at March 31, 2026 has been derived from the audited financial statements at that date.

For further information, refer to the financial statements and footnotes thereto included in the Company’s annual financial statements

for the twelve months ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31,

Cash and Cash Equivalents

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specific bank.

The Company’s inventory is stated at the

lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out

The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory.

assessed its inventory at September 30, 2025 and the reserve remained at 100 % of the inventory.

As of September 30, 2025 and December

31, 2024, the Company had recorded reserves of $ 0 and $ 2,525,179 , respectively.

As of September 30, 2025 and December 31, 2024, the Company

had inventory valued at $ 0 .

Capitalization of Fixed Assets

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at, or entered into after, the beginning of the earliest period presented in the financial statements.

At September 30, 2025 and December

At March 31, 2026 and December

31, 2025, the Company recorded a right of use asset of $ 431,725 and $ 461,949 , respectively.

At September 30, 2025 and December 31, 2024

the Company recorded a lease liability of $ 525,328 and $ 584,419 , respectively.

At March 31, 2026 and December 31, 2025, the

Company recorded a lease liability of $ 461,206 and $ 492,352 , respectively.

Digital Assets

The Company maintains a DAT strategy under which it may acquire, hold,

and deploy certain digital assets as part of its treasury and capital management activities.

The Company’s digital assets consist

primarily of HYPE tokens, which are recorded on the consolidated balance sheets as “Digital assets.”

Measurement of Digital Assets

Digital assets are accounted for as indefinite-lived intangible assets

and, effective January 1, 2025, are measured at fair value in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto

The Company determines the fair value of its digital assets based on quoted market prices in active markets (Level 1 inputs)

as of the reporting date.

Changes in the fair value of digital assets are recognized in the consolidated

statements of operations within “Change in fair value of digital assets.” Realized gains and losses from the sale of digital

assets are also recorded within this line item.

Transaction costs associated with the acquisition or disposition of digital assets are

expensed as incurred within operating expenses.

Digital Asset Staking

The Company may participate in staking activities whereby it validates

transactions on blockchain networks and earns rewards in the form of additional digital assets.

Digital asset staking rewards are recognized as revenue within “Digital

asset staking compensation” in the consolidated statements of operations when the Company has (i) performed the required validation

services, (ii) earned the right to receive the rewards, and (iii) the amount can be reasonably estimated.

Staking rewards are measured

at the fair value of the digital assets received at the time they are earned.

Digital assets received from staking activities are initially recorded

at fair value and subsequently included in the Company’s digital asset holdings, where they are remeasured at fair value at each

reporting period.

Custody and Safeguarding

The Company utilizes third-party custodians to safeguard its digital

The Company recognizes digital assets on its balance sheet when it has control over the assets, including when assets are held

by a custodian on the Company’s behalf.

Digital assets are classified as noncurrent assets on the consolidated

balance sheets unless management intends to sell them within one year.

Changes in fair value and staking compensation are presented separately

within operating income (loss), unless otherwise required by the nature of the Company’s operations.

Revenue Recognition

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industries and requires additional disclosures.

The updated guidance introduces a five-step model to achieve its core principal of the

The updated guidance introduces a five-step model to achieve its core principle of the

entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which

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commercial substance and verify that collection of substantially all consideration is probable.

The adoption of ASC Topic 606 did not

have an impact on the Company’s operations or cash flows.

Research and Development Costs

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the statement of operations as incurred.

During the three months ended September 30, 2025 and 2024, the Company incurred $ 432,113 and

During the three months ended March 31, 2026 and 2025, the Company incurred $ 776,410 and $ 528,685

of expenses related to research and development costs, respectively.

During the nine months ended September 30, 2025 and

2024, the Company incurred $ 1,341,859 and $ 2,552,336 of expenses related to research and development costs, respectively.

Net Earnings (Loss) Per Common Share

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There were 2,984,346 and 2,626,254 potentially dilutive shares, which include outstanding

common stock options, and warrants, as of September 30, 2025 and December 31, 2024, respectively.

September 30,

common stock options, and warrants, as of March 31, 2026 and December 31, 2025, respectively.

Options to purchase common stock

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Restricted Stock Units

Restricted Stock Awards

Potential equivalent shares excluded

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● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly

observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets

that are not active;

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring

an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs

or significant value drivers are unobservable.

Financial assets are considered Level 3 when their

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and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board.

Effective January 1, 2025,

the pool of shares issuable under the Omnibus Plan automatically increased by 178,033 shares from 1,738 shares to 179,771 shares .

In addition, on December 9,

2025, the stockholders approved the Second Amendment to the Omnibus Plan (the “Omnibus Plan Amendment”) at the 2025 Annual

Meeting of the Company’s stockholders (the “Annual Meeting”).

The Omnibus Plan Amendment increased the pool of shares

available for issuance by 3,200,000 shares of common stock.

Due to these increases, the pool of shares issuable under the Omnibus Plan

shares increased from 1,738 shares to 3,379,771 shares as of December 31, 2025.

In light of the increase effected by the Omnibus Plan

Amendment, no automatic increase to the pool was effected as of March 31, 2026.

As of March 31, 2026, there were 3,019,525 shares

of common stock remaining available for issuance under the Omnibus Plan.

The Company records share-based compensation in

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The Company has limited commercial experience

and had a cumulative net loss from inception to September 30, 2025 of $ 107,296,300 .

The Company had working capital of $ 248,402 as of

September 30, 2025.

The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow

it to continue as a going concern and will require additional financing to fund its future planned operations, including research and

development and commercialization of its products.

These matters raise substantial doubt about the Company’s ability to continue

as going concern.

The accompanying financial statements for the nine months ended September 30, 2025 have been prepared assuming the Company

will continue as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining

adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable.

Management’s plans to continue

as a going concern include raising additional capital through sales of equity securities and borrowing.

However, management cannot provide

any assurances that the Company will be successful in accomplishing any of its plans.

If the Company is not able to obtain the necessary

additional financing on a timely basis, the Company will be required to delay, reduce the scope of, or eliminate one or more of the Company’s

research and development activities or commercialization efforts or perhaps even cease the operation of its business.

The ability of the

Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is

unable to continue as a going concern.

and had a cumulative net loss from inception to March 31, 2026 of $ 111,776,942 .

The Company had working capital of $( 298,774 ) as of March

The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue

as a going concern and will require additional financing to fund its future planned operations, including research and development and

commercialization of its products.

These matters raise substantial doubt about the Company’s ability to continue as going concern.

The accompanying financial statements for the three months ended March 31, 2026 have been prepared assuming the Company will continue

as a going concern, but the ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital

to fund operating losses until it establishes a revenue stream and becomes profitable.

Management’s plans to continue as a going

concern include raising additional capital through sales of equity securities and borrowing.

However, management cannot provide any assurances

that the Company will be successful in accomplishing any of its plans.

If the Company is not able to obtain the necessary additional financing

on a timely basis, the Company will be required to delay, reduce the scope of, or eliminate one or more of the Company’s research

and development activities or commercialization efforts or perhaps even cease the operation of its business.

The ability of the Company

to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to

continue as a going concern.

Recent Accounting Pronouncements

The Company considered recent accounting pronouncements

issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did

not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.

Note 3 - Inventory

As of September 30, 2025 and December 31, 2024,

inventory consisted of raw materials, subassemblies to be used in the assembly of Thermo-Acoustic Enhanced Ultrasound (“TAEUS”)

systems, and finished goods.

As of September 30, 2025, the Company had no orders pending for the sale of a TAEUS system.

As of September 30, 2025 and December 31, 2024,

the Company had recorded reserves of $ 0 and $ 2,525,179 , respectively.

As of September 30, 2025 and December 31, 2024, the Company had

inventory valued at $ 0 .

Note 4 - Fixed Assets

As of September 30, 2025 and December 31, 2024, fixed assets consisted of the following:

September 30,

issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, and

determined that such pronouncements did not or in management’s opinion will not have a material impact on the Company’s present

or future consolidated financial statements.

4 - Fixed Assets

As of March 31, 2026 and December 31, 2025, fixed assets consisted of the following:

Property, leasehold and capitalized software

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Fixed assets, net

expense for the three months ended September 30, 2025 and September 30, 2024 was $ 10,786 and $ 11,496 , respectively.

Depreciation expense for the nine months ended

September 30, 2025 and September 30, 2024 was $ 33,928 and $ 35,489 , respectively.

Note 5 - Accounts Payable and Accrued Liabilities

As of September 30, 2025 and December 31, 2024, current liabilities consisted of the following:

September 30,

Depreciation expense for the three months ended March 31, 2026 and

March 31, 2025 was $ 9,492 and $ 13,786 , respectively.

5 - Accounts Payable and Accrued Liabilities

As of March 31, 2026 and December 31, 2025, current liabilities consisted of the following:

Accounts payable

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Accrued expenses

Note 6 - Bank Loans

Toronto-Dominion Bank Loan

On April 27, 2020, the Company entered into a

commitment loan with TD Bank under the Canadian Emergency Business Account, in the principal aggregate amount of CAD 40,000 , due and payable

upon the expiration of the initial term on December 31, 2022 which was later extended to December 31, 2023.

This note bears interest on

the unpaid balance at the rate of zero percent ( 0 %) per annum during the initial term.

Under this note no interest payments were due until

January 1, 2024.

Under the conditions of the loan, twenty-five percent (25%) of the loan will be forgiven if seventy-five percent (75%)

is repaid prior to the initial term date.

During the three months ended March 31, 2024, the loan was repaid in full.

Note 6 - Capital Stock

Capital Stock

At September 30, 2025, the authorized capital

of the Company consisted of 30,000,000 shares of capital stock, comprised of 20,000,000 shares of common stock with a par value of $ 0.0001

At March 31, 2026, the authorized capital of the

Company consisted of 1,010,000,000 shares of capital stock, comprised of 1,000,000,000 shares of common stock with a par value of $ 0.0001

per share, and 10,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

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Stock, and the remainder of the 9,889,000 preferred shares remain authorized but undesignated.

As of September 30, 2025, there were 786,902 shares

of common stock outstanding, 17.488 shares of Series A Preferred Stock, and no shares of Series B Preferred Stock or Series C Preferred

Stock issued and outstanding, and a stock payable balance of $ 0 .

During the nine months ended September 30, 2025,

the Company issued a total of 249,994 shares of its common stock under the February 2024 ATM Agreement in return for aggregate net proceeds

of $ 1,152,686 , which takes into account $ 35,953 in compensation paid to Ascendiant Capital Markets, LLC (“Ascendiant”)

As of March 31, 2026, there were 1,240,751 shares

of common stock outstanding (which excludes both the 69 unvested shares of restricted stock described in Note 7 below, the 1 share

of common stock into which the outstanding shares of Series A Preferred Stock are convertible and includes 12,857 shares of

common stock due to exercise of warrants and 6 shares issued but held in treasury), 17.488 shares of Series A Preferred Stock,

and no shares of Series B Preferred Stock or Series C Preferred Stock issued and outstanding, and a stock payable balance of $ 0 .

During the three months ended March 31, 2026,

the Company issued a total of 64,274 shares of its common stock under the October 2025 ATM Agreement (as defined below) in return for

aggregate net proceeds of $ 263,748 , which takes into account $ 8,154 in compensation paid to Lucid Capital Markets, LLC (“Lucid”)

in its role as Sales Agent under the February 2024 ATM Agreement.

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stock for aggregate gross proceeds of up to $ 6.2 million, which replaced the Company’s prior At-The-Market Issuance Sales Agreement.

Under the February 2024 ATM Agreement, as of September 30, 2025, the Company has issued a total of 249,994 shares of its common stock

in return for aggregate net proceeds of $ 1,152,686 , resulting in $ 35,953 of compensation paid to Ascendiant.

On October 13, 2025, the

Company terminated the February 2024 ATM Agreement.

Reverse Stock Split

On August 16, 2024, the Company filed with the

Secretary of State of the State of Delaware a certificate of amendment to its certificate of incorporation, which effectuated, as of August

20, 2024 at 12:01 a.m.

Eastern Time, a reverse split of the Company’s common stock at a ratio of one-for-50 (the “August 2024

Reverse Stock Split”).

On November 4, 2024, the Company filed with the

Secretary of State of the State of Delaware a certificate of amendment to its certificate of incorporation, which effectuated, as of November

7, 2024 at 12:01 a.m.

Eastern Time, a reverse split of the Company’s common stock at a ratio of one-for-35 (the “November

2024 Reverse Stock Split”).

All per share amounts (including exercise prices)

and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect both the August

2024 Reverse Stock Split and the November 2024 Reverse Stock Split.

The August 2024 Reverse Stock Split and the November

2024 Reverse Stock Split resulted in a proportionate adjustment to the per share conversion or exercise price and the number of shares

of common stock issuable upon the conversion or exercise of outstanding preferred stock, stock options and warrants, as well as the number

of shares of common stock eligible for issuance under the Omnibus Plan.

Note 8 - Common Stock Options, Restricted Stock

Units and Restricted Stock

On October 13, 2025, the Company terminated the February 2024 ATM Agreement.

On October 29, 2025, the Company entered into an At-The-Market

Issuance Sales Agreement with Lucid, as sales agent, pursuant to which the Company may offer and sell, from time to time through Lucid,

shares of Common Stock for aggregate gross proceeds of up to $ 1,750,000 (the “October 2025 ATM Agreement”).

Note 7 - Common Stock Options, Restricted Stock Units and Restricted

Common Stock Options

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There were no issuances of stock options in

the quarter ended September 30, 2025.

A summary of option activity under the Company’s Omnibus Plan as of September 30, 2025, and

changes during the quarter then ended, is presented below:

the quarter ended March 31, 2026.

A summary of option activity under the Company’s Omnibus Plan as of March 31, 2026, and changes

during the quarter then ended, is presented below:

Weighted Average

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Cancelled or expired ( 52 ) 60,268 -

Balance outstanding at September 30, 2025 266 $ 26,594.61 4.80

Exercisable at September 30, 2025 229 $ 29,710.19 4.39

Balance outstanding at March 31, 2026 184 $ 19,961 3.46

Exercisable at March 31, 2026 184 $ 19,961 3.46

Restricted Stock Units

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The fair value per share (closing stock price) was $ 3.37 .

The grants included both standard RSUs issued to members of the Board of Directors and performance-based RSUs (“PBRSUs”)

issued to employees.

The grants included both standard RSUs issued to members of the Board of Directors and performance-based RSUs (“PBRSUs”) issued

to employees.

The PBRSUs are subject to both service and performance vesting conditions.

During the three months ended September 30, 2025,

the Company recognized $ 104,765 in stock-based compensation expense related to these RSU and PBRSU grants.

This expense is included

in total operating expenses in the condensed consolidated statements of operations.

During the nine months ended September 30, 2025,

the Company recognized $ 144,295 in stock-based compensation expense related to these RSU and PBRSU grants.

This expense is included

in total operating expenses in the condensed consolidated statements of operations.

On March 2, 2026, due to shifting business priorities

making the original performance conditions unfeasible, the Board has approved modifying the RSUs to vest fully on the one-year anniversary

of the grant date.

Due to this, there was change of PRSUs into time-based RSUs with vesting based solely on continued service through

June 11, 2026 (the one-year anniversary of the original grant date).

On January 21, 2026, the Company granted a total

of 330,972 RSUs under its Omnibus Plan.

The fair value per share (closing stock price) was $ 4.31 .

The grants included standard RSUs issued

to members of the Board of Directors and employees.

During the three months ended March 31, 2026,

the Company recognized $ 535,955 in stock-based compensation expense related to these RSU grants.

This expense is included in total operating

expenses in the condensed consolidated statements of operations.

Unrecognized stock-based compensation expense

related to these RSUs will be recognized over the remaining vesting period, which is one year for standard RSUs and subject to performance

conditions for PBRSUs.

As of September 30, 2025, the total compensation expense to be recognized in future periods is $ 351,664 over the

next two years.

related to these RSUs will be recognized over the remaining vesting period, which is one year for standard RSUs.

As of March 31, 2026,

the total compensation expense to be recognized in future periods is $ 1,263,823 over the next one year .

Restricted Common Stock

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No services were provided by PatentVest, Inc.

in the period ended September

in the period ended March

Note 8 - Common Stock Warrants

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Series Warrants was $ 227.50 and the purchase price of each pre-funded warrant and accompanying Series Warrants was $ 227.325 .

In connection with the 2025 Private Placement,

the Company also issued placement agent warrants to purchase up to 44,660 shares of common stock at an exercise price of $ 9.47 per

Additionally, and as part of the DAT strategy, the Company issued to its investment advisor warrants to purchase an aggregate of 400,000 shares

of Common Stock (the “Advisory Warrants”).

Advisory Warrants in respect of 100,000 shares are exercisable immediately

for an exercise price equal to $ 6.95 .

Advisory Warrants in respect of 300,000 shares become exercisable in the event that AUM

exceeds certain thresholds within six or nine months following the closing, at exercise prices ranging from $ 6.95 to $ 7.50 .

Warrant Exercises

On May 2, 2023, the Company conducted a registered

offering in which the Company issued 1,232 warrants to purchase shares of common stock for an exercise price per share equal to $ 2,450 .

The warrants expire May 2, 2028.

In December 2023, the Board approved a temporary reduction of the exercise price per share from $ 2,450

The Company also issued to the underwriter and its designees warrants exercisable for an aggregate of 172 shares of common

stock for an exercise price per share equal to $ 2,625 .

The warrants expire November 2, 2026.

During the nine months ended September 30,

During the three months ended March 31, 2026,

no warrants were exercised.

The following table summarizes all warrant activity

of the Company for the nine months ended September 30, 2025:

The following table summarizes all warrant activity of the Company

for the three months ended March 31, 2026:

Weighted Weighted

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Balance outstanding at December 31, 2025 2,478,848 $ 85.38 4.58

Granted - - -

Exercised - -

Forfeited - - -

Expired - - -

Balance outstanding at September 30, 2025 180,707 $ 85.38 3.84

Exercisable at September 30, 2025 180,707 $ 85.38 3.84

Balance outstanding at March 31, 2026 2,478,848 $ 12.24 3.45

Exercisable at March 31, 2026 2,178,848 $ 12.97 3.57

Common Stock Warrants

As described above in

“Registered Offering” (Note 7), the Company issued 178,255 Series A Warrants and 178,255 Series B Warrants.

The Company accounts for these 356,510 warrants, in the aggregate, in accordance with the guidance in ASC 815 “Derivative

and Hedging” whereby under that provision the warrants do not meet the criteria for equity treatment and must be recorded as a liability.

Accordingly, the Company classified the warrant instruments as a liability at fair value and adjusts the instruments to fair value each

This liability will be re-measured at each balance sheet date until the warrants are exercised or expire, and any change in fair

value will be recognized in the Company’s statement of operations.

During the three and nine months ended September 30, 2025, the

Company recognized a loss of $ 267,274 and a gain of $ 203,400 , respectively, for the change in fair value of warrant liability in the statement

of operations.

As of September 30, 2025, the Company recognized $ 595,884 of warrant liability.

Recurring Fair Value Measurements

The Company’s warrant liability for the

Series A and Series B Warrants is based on the Black-Scholes option pricing model utilizing management judgement and pricing inputs from

observable and unobservable markets.

Significant deviations from these estimates and inputs could result in a material change in fair

The fair value of the warrant liability is classified within Level 2 of the fair value hierarchy because the Company uses observable

inputs like market prices for its common stock and risk-free interest rate, but requires estimations for factors like the Company’s

own volatility, which is not directly quoted in active markets.

The Company established

the initial fair value for the warrant liability on August 20, 2024, the date the warrants were initially exercisable.

Upon exercise,

the instrument is marked to its fair value upon exercise, and the shares delivered are recorded at fair value in the Company’s statement

of stockholders’ equity.

The warrant liability was valued based on the following inputs for the Series A and Series B Warrants,

respectively:

September 30,

During the three months ended March 31, 2026 and

2025, the Company recognized a (loss) gain of $( 8,857 ) and $ 408,562 , respectively, for the change in fair value of warrant liability in

the statement of operations.

As of March 31, 2026 and December 31, 2025, the warrant liability balance was $ 488,604 and $ 479,747 , respectively.

The Company established the initial fair value

for the warrant liability on August 20, 2024, the date the warrants were initially exercisable.

Upon exercise, the instrument is marked

to its fair value upon exercise, and the shares delivered are recorded at fair value in the Company’s statement of stockholders’

The warrant liability was valued based on the following inputs for the warrants:

Exercise Price

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136.2 % and 159.9 %

140.44 % and 163.82 %

Discount Rate

3.68 % and 3.83 %

3.47 % - 3.63 %

Expected Dividend

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0.89 and 3.39

1.13 and 5.01

Note 9 - Digital Assets

The Company holds digital assets as part of its treasury strategy.

As of December 31, 2025 and March 31, 2026, the Company’s digital asset holdings consist of HYPE tokens.

Accounting Policy

The Company accounts for its digital assets in accordance with ASC

350-60, Accounting for and Disclosure of Crypto Assets.

Digital assets are measured at fair value each reporting period, with changes

in fair value recognized in earnings.

Fair value is determined using observable market prices derived from

active trading venues.

The Company uses the market price reported in custody statements provided by Anchorage Digital Bank, the Company’s

digital asset custodian.

The Company’s digital assets are classified within Level 1 of

the fair value hierarchy because the fair value is based on quoted prices in active markets.

Purchases and Sales

In the fourth quarter 2025, the Company purchased approximately 78,863.1

HYPE tokens for an aggregate cost of $ 3.0 million.

As of December 31, 2025, the Company’s holdings also included 175.8 tokens received

as staking rewards during that period.

During the quarter ending March 31, 2026, the Company sold 12,914.5

tokens for gross proceeds of $ 450,000 .

The Company recognized a realized gain of $ 121,584 , which is included in Other Income/Expense in

the consolidated statements of operations.

Staking Activities

The Company participates in staking activities related to its HYPE

Staking rewards represent additional tokens earned from participation in blockchain validation activities.

Staking rewards are recognized as income when the Company obtains control

of the tokens, which occurs when the tokens are credited to the Company’s custody account.

The rewards are measured at fair value

at the time of receipt.

For the quarter ended March 31, 2026, the Company recognized $ 11,060

of staking reward income, which is included in Other Income in the consolidated statements of operations.

There was no staking income

for the quarter ended March 31, 2025.

Digital Asset Balance

Balance at December 31, 2025

Cost of tokens sold

Digital Asset staking compensation

Unrealized gain/(loss) from fair value measurement

Balance at March 31, 2026

Digital assets at fair value

The Company determines the fair value of its digital assets based on

quoted market prices in active markets (Level 1 inputs) as of the reporting date.

The aggregate cost basis of digital assets held as of

March 31, 2026 was $ 1,692,604 .

Note 10 - Related Party Transactions

In September 2024,

the Company began using IS Bookkeeping & Payroll, which is a division of Impact Solve, LLC (dba Impact Solutions) (“Impact Solutions”),

an accounting and chief financial officer service firm.

The Company’s Chief Financial Officer works in a part-time capacity for

the Company through Impact Solutions.

For the three month periods ended September 30, 2025 and September 30, 2024, Impact Solutions and

IS Bookkeeping & Payroll provided services to the Company totaling $ 45,548 and $ 35,881 , respectively.

For the nine month periods

ended September 30, 2025 and September 30, 2024, Impact Solutions and IS Bookkeeping & Payroll provided services to the Company totaling

$ 126,566 and $ 63,831 , respectively.

In September 2024, the Company began using IS

Bookkeeping & Payroll, which is a division of Impact Solve, LLC (dba Impact Solutions) (“Impact Solutions”), an accounting

and chief financial officer service firm.

The Company’s Chief Financial Officer works in a part-time capacity for the Company through

Impact Solutions.

For the three month periods ended March 31, 2026 and March 31, 2025, Impact Solutions and IS Bookkeeping & Payroll

provided services to the Company totaling $ 44,571 and $ 49,186 , respectively.

Note 11 - Commitments and Contingencies

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the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments.

The Company’s discount rate for operating leases at September 30, 2025 was 10 %.

The Company’s discount rate for operating leases at March 31, 2026 was 10 %.

Lease expense is recognized on a straight-line basis

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The weighted-average remaining lease term is 3 years.

As of September 30, 2025, the maturities of operating lease liabilities are as follows:

of March 31, 2026, the maturities of operating lease liabilities are as follows:

2027 and beyond

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Long-term lease obligations

For the nine months ended September 30, 2025 and

2024, the Company incurred rent expenses of $ 142,914 and $ 164,405 , respectively.

For the three months ended March 31, 2026 and 2025, the Company incurred

rent expenses of $ 40,939 and $ 51,733 , respectively.

Employment and Consulting Agreements

Alexander Tokman -

Effective August 13, 2024, the Board appointed Alexander Tokman as the Company’s acting Chief Executive Officer and Chairman of

the Board of Directors.

Alexander Tokman - Effective August 13,

2024, the Board appointed Alexander Tokman as the Company’s acting Chief Executive Officer and Chairman of the Board of Directors.

In connection with his appointment, Mr.

Tokman and the Company entered into an employment agreement, dated August

13, 2024 (the “Employment Agreement”).

Tokman’s employment with the Company is “at will” and may be

terminated by him or the Company at any time and for any reason.

Tokman and the Company entered into an employment agreement, dated August 13, 2024 (the “Employment

Tokman’s employment with the Company is “at will” and may be terminated by him or the Company

at any time and for any reason.

Pursuant to the Employment Agreement, Mr.

Tokman will receive an annual

base salary of $ 300,000 , subject to adjustment at the Board’s discretion.

Tokman is also eligible for an annual cash bonus based

upon the achievement of performance-based objectives established by the Board of Directors.

Tokman will receive an annual base salary of $ 300,000 , subject

to adjustment at the Board’s discretion.

Tokman is also eligible for an annual cash bonus based upon the achievement of performance-based

objectives established by the Board of Directors.

Tokman’s employment is terminated

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to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Michael Thornton -

The Company has an employment agreement with Michael Thornton, the Company’s Chief Technology Officer, dated May 12, 2017, as amended

December 27, 2019.

The employment agreement provides for an annual base salary that is subject to adjustment at the board of directors’

Effective January 1, 2022, the Compensation Committee increased Mr.

Thornton’s annual salary to $ 324,000 .

Thornton agreed to a 30 % reduction of his base salary received for the remainder of 2023 in order to preserve cash for the Company’s

Under the employment agreement, Mr.

Thornton is eligible for an annual cash bonus based upon achievement of performance-based

objectives established by the board of directors.

Upon termination without cause, any portion of Mr.

Thornton’s option award scheduled

to vest within 12 months will automatically vest, and upon termination without cause within 12 months following a change of control, the

entire unvested portion of the option award will automatically vest.

Upon termination for any other reason, the entire unvested portion

of the option award will terminate.

Thornton’s employment is terminated

by the Company without cause or Mr.

Thornton terminates his employment for good reason, Mr.

Thornton will be entitled to receive 12 months’

continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’

continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination

occurs within one year following a change in control).

Under his employment agreement, Mr.

eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers.

Richard Jacroux - On August 7, 2024, the Company’s

Board of Directors appointed Richard Jacroux as Chief Financial Officer.

Jacroux works in a part-time capacity for the Company through

Impact Solutions.

Jacroux receives a base monthly fee of $ 8,650 plus expenses in respect of his services to the Company.

The Company’s

needs have typically required more than the base fee, averaging $ 13,683 a month for the three months ending September 30, 2025 and $ 11,431

a month for the nine months ending September 30, 2025.

Richard Jacroux - On August 7, 2024, the

Company’s Board of Directors appointed Richard Jacroux as Chief Financial Officer.

Jacroux works in a part-time capacity for

the Company through Impact Solutions.

Jacroux receives a base monthly fee of $ 8,650 plus expenses in respect of his services to the

Company and any hours worked in excess of 20 hours per week are paid at a rate of $ 150 per hour.

The Company’s needs have typically

required more than the base fee, averaging $ 11,632 a month for the three months ending March 31, 2026.

From time to time the Company may become a party

to litigation in the normal course of business.

As of September 30, 2025, there were no legal matters that management believes would have

As of March 31, 2026, there were no legal matters that management believes would have

a material effect on the Company’s financial position or results of operations.

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performance of the segment and in establishing management’s compensation, along with cash forecast models.

The table below summarizes the significant expense

categories regularly reviewed by the CODM for the nine months ended September 30, 2025, and 2024:

The table below summarizes the significant expense categories regularly

reviewed by the CODM for the three months ended March 31, 2026, and 2025:

Operating Expenses

September 30,

Research and development

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$ ( 1,036,330 )

(a) Other segment items included in segment

loss includes warrant expense, changes in warrant liability and interest income.

(a) Other segment items included in segment loss includes digital

asset staking compensation, changes in fair value of digital asset, warrant expense, changes in warrant liability and interest income.

Note 13 - Subsequent Events

On October 10, 2025,

the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors

(the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Purchasers in a private placement offering

(the “Private Placement”) an aggregate of 744,340 shares of common stock, and/or prefunded warrants in lieu thereof (the “Prefunded

Warrants”), and warrants (the “Common Warrants”) to purchase an aggregate of up to 1,488,680 shares of common stock

at a per share exercise price of $ 6.32 .

Each share of common stock (or Prefunded Warrant in lieu thereof) and accompanying Common

Warrants were sold at a combined purchase price of $ 6.57 .

The Private Placement closed on October 15, 2025.

On October 23, 2025, the Company announced that

it had purchased 78,863.1 HYPE tokens with an estimated total value of approximately $ 3,000,000 as of October 21, 2025 to launch its Digital

Asset Treasury (“DAT”) strategy.

On October 29, 2025, the Company entered into

an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Lucid Capital Markets, LLC, as sales agent (“Lucid”),

pursuant to which the Company may offer and sell, from time to time through Lucid, shares of its common stock, par value $ 0.0001 per share,

for aggregate gross proceeds of up to $ 1,750,000 (the “ATM Shares”).

Pursuant to the ATM Agreement, Lucid may sell

the ATM Shares in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities

Act, including sales made directly on or through the Nasdaq Capital Market.

The Company and Lucid may also agree for the Company to sell

ATM Shares to Lucid as principal in negotiated transactions, at a purchase price agreed upon by Lucid and the Company.

The offer and sale

of the ATM Shares pursuant to the ATM Agreement will terminate upon the earlier of (a) the issuance and sale of all of the ATM Shares

subject to the ATM Agreement, (b) the termination of the ATM Agreement by Lucid or the Company pursuant to the terms thereof, or (c) the

three-year anniversary of the date of the ATM Agreement.

The Company has no obligation to sell any of the ATM Shares, and may at any time

suspend offers under the Agreement or terminate the Agreement.

The Company has agreed to pay Lucid a commission

of up to 3.0 % of the aggregate gross proceeds from any ATM Shares sold by Lucid and to provide Lucid with customary indemnification and

contribution rights, including for liabilities under the Securities Act.

The Company also will reimburse Lucid for certain specified expenses

in connection with entering into and maintaining the ATM Agreement.

The ATM Agreement contains customary representations and warranties

and conditions to the placements of the ATM Shares pursuant thereto.

The Company has assessed operations through, May 15, 2026, the filing

date of this Quarterly Report on Form 10-Q and determined that there were no material subsequent events requiring adjustment to, or disclosure

in, our consolidated financial statements for the three months ended March 31, 2026, other than the following:

On April 20, 2026, The Nasdaq Stock Market LLC (“Nasdaq”)

Listing Qualifications Staff (the “Staff”) issued a letter to the Company indicating that, because the Company’s

stockholders’ equity as reported in its Annual Report on Form 10-K for the year ended December 31, 2025 was $ 2,260,120 , the Company

is no longer in compliance with Minimum Stockholders’ Equity Requirement.

The Staff’s letter indicated that the Company’s

non-compliance would result in the delisting of the Company’s securities from Nasdaq unless the Company timely requests a hearing

before the Nasdaq Hearings Panel (the “Panel”).

The Company timely requested a hearing before the Panel, which request will

stay any further action by Nasdaq pending the issuance of a decision by the Panel and the expiration of any extension the Panel may grant

to the Company following the hearing.

The Company intends to take all reasonable measures available to regain

compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.

The Company is currently evaluating its available

options to resolve the deficiency and regain compliance with the Minimum Stockholders’ Equity Requirement.

there can be no assurance that the Company will be able to regain compliance with the Minimum Stockholders’ Equity Requirement,

maintain compliance with the other Nasdaq listing requirements or be successful in appealing the delisting determination.

Subsequent to March 31, 2026, the Company sold digital assets for aggregate

proceeds of approximately $ 250,000 during April 2026.

The transaction did not impact the Company’s financial position as of the

balance sheet date and is disclosed as a non-recognized subsequent event.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements