NOTE 9 – STOCKHOLDERS’ DEFICIT

Preferred stock

The Company’s authorized preferred stock consists of 5,000,000 shares of preferred stock, with a par value of $0.001 per share. On November 20, 2020, the Company designated 1,000,000 shares of Series A preferred stock. The Series A preferred stock has a liquidation preference to all other securities, a liquidation value of $25 per share, receives cumulative dividends payable in cash of 12% per year, payable quarterly. The Series A preferred stock does not have voting rights, except that the Company may not: 1) create any additional class or series of stock, nor any security convertible into stock of the Company; 2) modify the Series A preferred stock designation; 3) initiate and dividend outside of without approval of at least two-thirds of the holders of the Series A preferred stock. The Company has the right, but not obligation to redeem the Series A preferred stock beginning January 1, 2026, at the liquidation value per share plus any unpaid dividends.

On February 28, 2025, the Company issued $70,000 in Series A preferred stock to the sellers of RevenueZen as further discussed in Note 16.

During the year ended December 31, 2025, the Company sold 32,200 shares of Series A preferred stock for $805,000 in cash proceeds.

During the year ended December 31, 2025 and 2024, the Company recognized $474,851 and $354,228 in dividends to the Series A preferred stockholders, respectively, and made cash dividend payments of $453,859 and $321,442, respectively. As of December 31, 2025 and 2024, the Company has remaining unpaid dividends of $121,789 and $100,797, respectively.

As of December 31, 2025 and December 31, 2024, there were 169,460 and 134,460 Series A preferred stock outstanding, respectively.

Common stock

The Company’s authorized common stock consists of 50,000,000 shares of common stock, with a par value of $0.001 per share. All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available. The Company has not declared any dividends on common stock to date.

On October 7, 2025 the Company’s initiated a private offering where by the Company raised net proceeds of $993,356 pursuant to an offering of Common Stock Units comprised of an aggregate of (i) 735,819 shares of common stock, and (ii) warrants to purchase 735,819 shares of common stock at an exercise price equal to US$2.50 per share and expire on August 30, 2027. The shares and warrants comprising the units are immediately separable and are to be issued separately.

Stock Options

On February 28, 2025, the Company issued 79,240 stock options to purchase shares of common stock to the sellers of RevenueZen as further discussed in Note 16. The stock options have an exercise price of $1.34, have a term of 10 years, and are vested immediately.

During the year ended December 31, 2025, the Company awarded an aggregate of 120,000 common stock options to the non-employee directors of the Company with an exercise price of $1.10, of which 60,000 vested immediately, and the remaining 60,000 vest on December 31, 2025. In addition, the Company awarded 200,000 options to our CFO with an exercise price of $1.08 that vested immediately. The fair value of the stock options was estimated using a Black-Scholes option pricing model and the following assumptions: 1) dividend yield of 0%; 2) risk-free rate between 3.98% and 4.08%; 3) volatility between 99.46% and 110.95% based on a group of peer group companies; and an expected term of 2 to 5.25 years.

During the year ended December 31, 2025, the Company awarded 5,500 options to an outside consultant with an exercise price of $1.12, that vested immediately. The fair value of the stock options was estimated using a Black-Scholes option pricing model and the following assumptions: 1) dividend yield of 0%; 2) risk-free rate of 3.87%; 3) volatility of 101.41% based on a group of peer group companies; and an expected term of three years.

During the year ended December 31, 2025, the Company awarded 80,000 options with an exercise price of $1.13 to an outside consultants that vest in equal monthly amounts over 1 year. The fair value of the stock options was estimated using a Black-Scholes option pricing model and the following assumptions: 1) dividend yield of 0%; 2) risk-free rate of 3.56%; 3) volatility of 104.66% based on a group of peer group companies; and an expected term of three years.

A summary of stock option information is as follows:

The weighted average remaining contractual life is approximately 6.51 years for stock options outstanding with an intrinsic value of $45,954 as of December 31, 2025. The Company recognized stock-based compensation of $240,653 and $47,868 during the years ended December 31, 2025 and 2024, respectively. The Company has $44,366 of additional compensation cost related to options that are expected to vest.

Common Stock Warrants

A summary of stock warrant information is as follows:

On October 7, 2025, a dilutive issuance of securities occurred pursuant to the Company’s 6,117,250 publicly traded Common Stock Purchase Warrant Dated August 30, 2022 (the “Warrant”). In accordance with Section 3(b) of the Warrant, the Dilutive Issuance affects the rights of holders of a Warrant (Nasdaq: ONFOW) under the Warrant. Effective as of October 7, 2025, as a result of a Dilutive Issuance, the Exercise Price was reduced from $5.00 per whole share to $2.50 per whole share, subject to the subsequent adjustments provided in the Warrant.  The Warrants are exercisable immediately and will remain exercisable at any time up to August 30, 2027. As a result of the Dilutive Issuance, upon any exercise of the Warrants by payment of cash, the Company will receive the exercise price of the warrants, which, if exercised in cash would result in gross proceeds to the Company of approximately $15.3 million.

The weighted average remaining contractual life is approximately 1.65 years for stock warrants outstanding with no intrinsic value of as of December 31, 2025.