NOTE 8– STOCKHOLDERS’ EQUITY

Preferred Stock

The Company has authorized 5,000,000 shares of $0.001 par value Preferred Stock, of which 250,000 were designated as Series A Convertible Preferred Shares. As of October 31, 2025 and 2024 there were no Series A Convertible Preferred shares outstanding.

In May 2025, the Company designated 750,000 shares as Series A-1 Convertible Preferred Shares for a private placement of the A-1 stock for a maximum of $15 million. As of October 31, 2025 and 2024, 35,000 and 0 shares of Series A-1 Convertible Preferred Stock were issued and outstanding, respectively.

The following is a summary of the rights and preferences of the Preferred A-1 Stock:

The holders of the Preferred A-1 Stock are entitled to a liquidation preference with respect to the Preferred A-1 Stock in the amount of $20 per share (“Stated Value”), subordinate to the stated value of any outstanding shares of preferred stock ranking senior to the Preferred A Stock, pari passu with the stated value of the series A-1 Preferred Stock, and senior to the rights of the holders of common stock.

The holders of the Preferred A-1 Stock are entitled to cumulative dividends at the annual rate of 8% based on the Stated Value per share, payable on the maturity date, which is five years from the date of issuance. Dividends are payable in the form of shares of common stock valued at $4.00 per share.

The Preferred A-1 Stock may be redeemed by the Company, in whole or in part, at any time or from time to time by notice to the holders. In the event of redemption, the Company shall be obligated to pay to each holder the Stated Value per share plus any accrued but unpaid dividends.

The Preferred A-1 Shares are convertible into common stock at $4.00 per share and may be converted at the discretion of the holder. The Preferred A-1 Stock shall automatically convert into the Company’s common stock if (a) (i) the common stock into which the Preferred A-1 Shares are convertible is registered with the SEC, (ii) there exists a public trading market for the common stock, and (iii) the trading price of the Company’s common stock has equaled or exceeded 200% of the conversion price as then in effect for ten or more consecutive trading days or (b) the Company effects a merger, consolidation or sale of assets and is not the surviving entity.

The holders of the Preferred A-1 Shares have the right to vote with the holders of the common stock on any matters presented to the stockholders at any regular or special meeting of the stockholders of the Company on an “as-converted” basis. The holders of the Series A-1 Stock are also entitled to vote as a class in the event the Company intends to create and/or issue shares of preferred stock that are senior to the Series A-1 Stock or if the Company attempts to amend its Articles of Incorporation to alter or amend the powers, privileges, rights, restrictions or conditions of the Series A-1 Stock.

Activity for the years ended October 31, 2025 and 2024

During the year ended October 31, 2025, the Company issued 35,000 shares of its Series A-1 Convertible Preferred Stock as part of an ongoing private placement.

There were no sales or grants of Series A-1 Preferred Stock during the year ended October 31, 2024.

Common Stock

As of October 31, 2025, the Company had authorized 19,230,770 shares of $0.001 par value common stock. As of October 31, 2025 and October 31, 2024, 4,460,535, and 4,460,535 shares were issued and outstanding, respectively.

Activity for the year ended October 31, 2025

There were no grants of common shares during the year ended October 31, 2025.

Activity for the year ended October 31, 2024

On November 16, 2023, the Company granted 30,000 shares of common stock pursuant to the execution of a consulting agreement. The shares were granted at $15.00 per share. The shares vested immediately and are not subject to any revision based on the terms of the consulting agreement. The Company has recorded the value of the shares granted, $450,000, as consulting expense.

Stock-Based Compensation

There were no grants of stock purchase options during the years ended October 31, 2025 and 2024.

The table below presents option activity for the years ended October 31, 2025 and 2024:

 SCHEDULE OF OPTION ACTIVITY

Stock based compensation expense related to options for the years ended October 31, 2025 and 2024 amounted to $1,301,108 and $1,513,677, respectively. As of October 31, 2025 and 2024, 1,058,692 and 934,397 options were exercisable, respectively. Unrecognized compensation expense related to outstanding options amounted to $792,903 and $1,985,988 as of October 31, 2025 and 2024, respectively.

Warrants

Activity for the year ended October 31, 2025

Effective November 16, 2024, the Company granted 180,000 pre-funded warrants with an exercise price of $0.001 to the majority holder of the 2024 Senior Secured Convertible Notes for a fair value of $990,000.

Om January 27, 2025, the Company granted 96,000 pre-funded warrants with an exercise price of $0.001 to a consultant to the Company for consulting services provided for a fair value of $528,000.

Activity for the year ended October 31, 2024

During the year ended October 31, 2024, the Company issued 1,107,500 in pre-funded warrants with an exercise price of $0.001 to 2024 Series Senior Convertible Note holders.

Series A & B Warrants

A summary of the Company’s common stock underlying its outstanding A and B warrants as of October 31, 2025 and 2024 is as follows:

 SCHEDULE OF COMMON STOCK UNDERLYING OUTSTANDING WARRANTS

Other Warrants

A summary of the Company’s common stock underlying its outstanding pre-funded warrants as of October 31, 2025 and October 31, 2024 is as follows: