NOTE 7 — Stockholders’ Deficit

On October November 2, 2018, the Company amended and restated its previous certificate of incorporation and adjusted its authorized capital stock (par value of $0.001) to consist of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. On October 16, 2025, at a special meeting of stockholders, our stockholders approved an amendment to our amended and restated certificate of incorporation increasing the authorized shares of our common stock from 100,000,000 to 1,000,000,000. Each outstanding share of common stock entitles the holder to one vote on each matter properly submitted to the stockholders of the Company for vote. As of June 30, 2026, no shares of preferred stock have been issued. On July 8, 2026, the Company sold to DNA Holdings Class B preferred stock for the purchase of new equity and the conversion of a note. See Note 13.

Purchase of DNA X LLC Membership Units with Issuance of Redeemable Common Stock

On December 15, 2025, the Company entered into a membership interest purchase agreement with DNA Holdings pursuant to which the Company purchased 100% of the membership interests in DNA X LLC, a Delaware limited liability company, for an aggregate purchase price of 223,201 redeemable shares of the Company’s common stock that had a fair value of $1,228 on the December 15, 2025 closing date, representing 19.99% of the outstanding shares of the Company’s common stock prior to the issuance. As of May 26, 2026, the value of the stock issued was $963 based on the closing stock price on May 26, 2026.

DNA X LLC is engaged in the business of DNA X DeFi, an advanced on-chain trading protocol that lets users automate their decentralized exchange trading — things like limit orders, grid / range orders, and recurring trades. DNA X LLC operates a crypto trading platform (https//dnax.us) that allows customers to buy and sell cryptocurrencies, and to implement strategies to buy and sell cryptocurrency pairs to take advantage of fluctuations of market prices between cryptocurrency pairs. The platform allows investors to efficiently implement trading strategies, to track historical results, and to monitor other traders’ strategies. The Company purchased this business because of the growth potential of commission revenue that will be generated as more customers join the platform and as trading volume increases as additional cryptocurrencies are added. The purchase allows the Company to diversify away from the capital intensive device hardware business that has little growth potential, into an industry with huge growth potential and requires lass ongoing capital investments.

The transaction closed contemporaneously with the sale of a note for $1,200 to DNA Holdings. See Note 6.

Under the Membership Interest Purchase Agreement, DNA Holdings also agreed to vote all shares of the Company’s common stock beneficially owned by DNA Holdings in favor of the asset purchase agreement, dated July 17, 2025, as subsequently amended and as amended from time to time, by and among the Company and Pace Car Acquisition LLC. This asset purchase agreement was approved by the Company’s stockholders on December 30, 2025.

Pursuant to the Membership Interest Purchase Agreement, so long as DNA Holdings, directly or indirectly, beneficially owns at least 5% of the Company’s outstanding common stock, DNA Holdings will have the right under the Membership Interest Purchase Agreement to designate one officer and one nominee for election to the Company’s board of directors, and the Company will be required to take reasonably necessary corporate action to appoint such designees, subject to the oversight of the Company’s nominating and governance committee. DNA Holdings designated Scott Walker for appointment to the Company’s Board of Directors and on January 30, 2026 the Board of Directors appointed Scott Walker to service on the Board as a director.

The Membership Interest Purchase Agreement also grants DNA Holdings a put option (the “Put Option”). If at any time prior to June 30, 2026 (the “Put Period”) DNA X does not realize either (i) aggregate trading volume of at least $600,000,000 or (ii) aggregate revenues of at least $1,000,000 per day, DNA Holdings will have the right, during the Put Period, to exchange the shares of common stock issued to DNA Holdings under the Membership Interest Purchase Agreement for the Purchased Interests then held by the Company. To the extent not exercised during the Put Period, the Put Option will terminate upon the expiration of the Put Period. See below for discussion of termination of the Put Option on May 26, 2026.

The Company determined that it had significant influence over DNA X LLC because it participated in the governance and operations of DNA X LLC and had the ability to influence its operating and financial policies. However, while the Put Option remained outstanding, the substantive rights held by the Seller prevented the Company from having the power to direct the activities that most significantly impacted DNA X LLC’s economic performance. Accordingly, the Company accounted for its investment in DNA X LLC under the equity method of accounting until May 26, 2026, when the Put Option was terminated. The carrying amount of the Company’s investment in DNA X LLC was $1,290 as of May 26, 2026. The Company’s share of earnings from DNA X LLC was included in other income from continuing operations and was $48 for the six months ended June 30, 2026. The Company’s assessment considered DNA X LLC’s governance structure and contractual arrangements established in connection with the acquisition of its interest, including the Put Option held by the Seller. The Put Option provides the Seller with substantive kick-out rights, through the Put Period ending on May 26, 2026, when it was terminated, including the ability to remove the Company from its decision-making role over DNA X LLC’s significant activities. As a result, the Company considered DNA X LLC as a variable interest entity (“VIE”), however, the Company is not the primary beneficiary and does not control DNA X LLC. Accordingly, the Company did not consolidate DNA X LLC while the Put Option was outstanding. The Company began consolidating DNA X LLC on May 26, 2026 with the termination of the Put Option.

The Company determined that it has significant influence over DNA X LLC because until the Put Option is exercised, it controls the governance structure and directs the activities that most significantly impact DNA X LLC’s economic performance. This significant influence requires the Company to account for the investment in DNA X LLC under the equity method of accounting. The carrying amount of the Company’s investment in DNA X LLC is $1,290 as of May 26, 2026, which is the day that the Put Option was terminated. Until May 26, 2026, DNA X LLC is included as an equity method investment in the consolidated balance sheets. The Company’s share of earnings from DNA X LLC is included in other income from continuing operations in the consolidated statements of operations and was $48 for the six months ended June 30, 2026. The Company began operating the DNA X LLC operations on December 15, 2025, and continues to operate the DNA X LLC operations today.

Because the stock issued could have been returned to the Company if the Seller exercised its Put Option, the Company classified the stock issued to the Seller as redeemable common stock on the consolidated balance sheets prior to May 26, 2026. The Company considered this to be temporary equity which was not included with other permanent equity on the consolidated balance sheets. When the Put Option was terminated on May 26, 2026, the redeemable common stock was reclassified as permanent equity. The redemption value at May 26, 2026 is calculated as $963 using the $4.315 closing stock price on May 26, 2026. The change in the redemption value of $63 was charged to accumulated deficit.

The activity of the redeemable common stock is as follows:

Schedule of Redeemable Common Stock

Securities Purchase Agreement for DNA Holdings for Shares Received from the Sale of DNA X LLC

The Purchase Agreement contains customary representations and warranties of the Company and DNA Holdings. Additionally, pursuant to the Purchase Agreement, the Company made certain covenants including, but not limited to: (i) timely filing of its reports with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, (ii) restrictions on the adoption of stockholder rights plans, poison pills, or similar anti-takeover measures, (iii) limitations on the use of proceeds from the Offering to the ordinary course of business of the Company, and (vi) for so long as the DNA Note remained outstanding, a covenant not to effect or enter into any variable rate transaction (as defined in the Purchase Agreement).

Additionally, under the Purchase Agreement, DNA Holdings has agreed to a voting arrangement that is substantially identical to the voting arrangement described above under “Membership Interest Purchase Agreement.”

See Note 6 for information on the convertible promissory note that was with the same counterparty.

On May 26, 2026 the Put Option was terminated. Upon termination, the Company reevaluated its position as it relates to DNA X LLC and determined that the Company is now the primary beneficiary, as DNA Holdings no longer has the power to direct the activities that most significantly impact DNA X LLC’s economic performance. The Company’s assessment considered DNA X LLC’s governance structure and contractual arrangements established in connection with the acquisition of its interest. The termination of the Put Option eliminates the ability of DNA Holdings to remove the Company from its decision-making role over DNA X LLC’s significant activities. As a result, the Company gained full control over DNA X LLC and the Company recorded the acquisition of DNA X LLC as an asset acquisition on May 26, 2026. The Company has operated the DNA X LLC platform since December 15, 2025.

The following are the fair values of major classes of assets acquired and liabilities assumed as of the May 26, 2026 acquisition date (in thousands of dollars):

Schedule of Assets Acquired and Liabilities Assumed

ChEF Purchase Agreement

On September 29, 2025, the Company entered into a ChEF purchase agreement (the “ChEF Agreement”) and registration rights agreement (the “Registration Rights Agreement”), each with Chardan Capital Markets LLC (“Chardan”) related to a “ChEF,” Chardan’s committed equity facility.

Pursuant to the ChEF Agreement, the Company has the right from time to time at its option to sell to Chardan up to the lesser of (i) $500 million in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) the Exchange Cap (as defined in the ChEF Agreement), subject to certain conditions and limitations set forth in the Purchase Agreement and applicable Nasdaq listing rules. The Company is under no obligation to sell any securities to Chardan under the ChEF Agreement.

While there are distinct differences, the facility pursuant to the ChEF Agreement is structured similarly to a traditional “at-the-market” equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis. The net proceeds from any sales under the ChEF Purchase Agreement will depend on the frequency of and the prices for which the shares of our common stock are sold to Chardan. The registration statement in connection with the facility became effective on October 29, 2025.

In November 2025, the Company sold 12,300 shares of stock through the ChEF and received $79 in net proceeds. The net proceeds were used for general corporate purposes.

The ChEF agreement was terminated on May 29, 2026.

Warrants issued to Roth Capital Partners, LLC in connection with its services as placement agent with respect to a registered public offering of the Company’s common stock

The Company issued to Roth Capital Partners, LLC (“Roth”), (the “Placement Agent”) warrants to purchase up to an aggregate of 11,604 shares of Common Stock, as adjusted for the Reverse Stock Splits (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $13.50 per share, as adjusted for the Reverse Stock Splits, became exercisable until January 2, 2026, and expire on July 2, 2030. The exercise prices of the Placement Agent Warrants are subject to appropriate adjustment in the event of stock dividends, stock splits, stock combinations, reorganizations or similar events affecting the Common Stock. Subject to limited exceptions, a holder of Placement Agent Warrants will not have the right to exercise any portion of its Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% (or, upon election by a holder prior to the issuance of any Warrants, 9.99%) of the shares of common stock then outstanding. At the holder’s option, upon notice to the Company, the holder may increase or decrease this beneficial ownership limitation not to exceed 9.99% of the shares of Common Stock then outstanding.