NOTE 4 – INVESTMENT IN DEBT AND EQUITY SECURITIES

INVESTMENT IN FEMASYS SECURITIES

On November 14, 2023, the Company entered into a Securities Purchase Agreement (the “Femasys Purchase Agreement”) with Femasys Inc. (“Femasys”), pursuant to which it agreed to purchase from Femasys for a sum of $5,000,000, (i) senior unsecured convertible note (the “Femasys Note”) in an aggregate principal amount of $5,000,000, convertible into shares of Femasys common stock, par value $0.001 per share (the “Femasys Shares”) at a conversion price of $1.18 per share, (ii) Series A Warrants (the “Series A Warrants”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.18 per share, and (iii) Series B Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Femasys Warrants,” and, together with the Notes, the “Femasys Securities”) to purchase up to an aggregate of 4,237,288 Femasys Shares at an exercise price of $1.475 per share (collectively, the “Investment”). The Femasys Note accrues interest at 6.0% per annum, payable annually, and mature two years after the date of issuance. The Series A Warrants expire five years from the date of issuance. The Series B Warrants expired in November 2024.

Pursuant to the terms of the Femasys Purchase Agreement, the Company’s Chief Executive Officer was appointed to the Femasys board of directors.

The convertible note receivable is not traded in active markets and the fair value was historically determined using a Monte Carlo simulation. The convertible note receivable is accounted for as available-for-sale debt securities based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the asset. The Company elected the fair value option for the Femasys Note, therefore, holding gains and losses are included within change in fair value of the note in the unaudited condensed consolidated statement of operations. The Femasys Warrants are accounted for as an equity security and are valued using a Monte Carlo simulation based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the asset, recorded at fair value with subsequent changes included within change in fair value of the warrants in the unaudited condensed consolidated statement of operations.

During the three months ended October 31, 2025 and 2024, the Company recognized interest income of $75,000 and $75,000, respectively, and during the six months ended October 31, 2025 and 2024 the Company recognized interest income of $150,000 and $150,000, respectively, from the Femasys Note. As of October 31, 2025 and April 30, 2025, the Company has accrued interest receivable of $287,500 and $137,500, respectively.

As of October 31, 2025, the fair value of the Femasys Note was equal to its principal $5,000,000, as it was near maturity and was expected to be settled in cash. The Femasys Note was settled in full in cash in November 2025. See Note 13 - Subsequent Events.

As of October 31, 2025, the fair value of the Femasys Series A Warrants was approximately $1,120,000 and was determined utilizing the following assumptions: Femasys stock price of $0.64, exercise price of $1.18, risk free rate of 3.60%, equity volatility of 94.0% and remaining term of 3.04 years.

The Company recognized the Femasys Note and Femasys Warrants based on their respective fair values as of April 30, 2025 of $3,696,000 and $3,061,000, respectively. Subsequent changes in the fair value of the Femasys Note and Femasys Warrants are recognized in earnings, at each reporting date. During the three and six months ended October 31, 2025, the Company recognized gains for change in fair value of the convertible note receivable of $392,000 and $1,304,000, respectively, and losses for change in fair value of the warrant asset of $726,000 and $1,941,000, respectively. See Note 12 – Fair value Measurements for further information.

Below is a summary of activity for the Femasys Note and Femasys Warrants as of October 31, 2025:

MARKETABLE SECURITIES

On November 21, 2024, the Company received from the Femasys Notes a payment in Femasys common stock for interest income in the amount of $300,000. The interest income payment was based on the Femasys average stock price on that date of $0.95, therefore, the Company received 315,790 common stock shares valued at $366,316 on April 30, 2025. As of October 31, 2025, the current market value of the Femasys common stock shares was $0.64 that generated an unrealized loss of $165,126.

Cost and fair value of marketable equity securities at October 31, 2025 are as follows:

The fair value of equity securities has been measured on a recurring basis using Level 1 inputs, which are based on unadjusted quoted market prices within active markets. There have been no changes in valuation approaches or techniques and related inputs.

INVESTMENT IN Q/C TECHNOLOGIES, INC.

Series G Preferred Shares and Warrants

On May 20, 2024, the Company entered into a Securities Purchase Agreement (the “Series G SPA”) with a public company operating in the medical industry, MyMD Pharmaceuticals, Inc. which subsequently changed its name to TNF Pharmaceuticals, Inc. and then to Q/C Technologies, Inc., (“QCLS”). Pursuant to the Series G SPA, the Company purchased (i) 7,000 shares of QCLS’s Series G Convertible Preferred Stock (the “Series G Preferred Shares” or “Series G Preferred Stock”) with an original conversion price of $1.816 per Series G Preferred Share, which were initially convertible into 3,854,626 shares of common stock of QCLS (“QCLS Common Stock”); (ii) warrants to purchase up to 3,854,626 shares of QCLS Common Stock with a five-year term (“QCLS Series G Long-Term Warrant”); and (iii) warrants to purchase up to 3,854,626 shares of QCLS Common Stock with a 18-month term (“QCLS Series G Short-Term Warrant”) (collectively, the “QCLS Series G Warrants”), for an aggregate purchase price of $7,000,000.

In April 2025, QCLS issued securities that caused changes to the original terms of the Series G Preferred Stock. The conversion and exercises prices were adjusted to $0.1832 per Series G Preferred Share, the number of QCLS Series G Long-Term Warrants were adjusted to purchase 38,209,611 shares of QCLS Common Stock and the number of QCLS Series G Short-Term Warrants were adjusted to purchase 38,209,611 shares of QCLS Common Stock. In September 2025, in connection with the QCLS’ 1-for-100 reverse stock split and pursuant to the stock combination event adjustment provisions of the Series G Preferred Shares and QCLS Series G Warrants, the conversion price and the exercise price was adjusted to $3.37 per share, the 7,000 Series G Preferred Shares were adjusted to be convertible into 2,076,351 shares of QCLS Common Stock, and the number of QCLS Series G Long-Term Warrants were adjusted to purchase 2,076,351 shares of QCLS Common Stock and the number of QCLS Series G Short-Term Warrants were adjusted to purchase 2,076,351 shares of QCLS Common Stock.

Pursuant to the Series G SPA, the Company has the right to participate in future sales of QCLS’s equity and equity-linked securities until the second anniversary of the Closing or the date on which no Series G Preferred Shares remain outstanding, whichever is earlier. Additionally, the Company has the right to nominate one individual to serve on QCLS’s board of directors until PharmaCyte no longer beneficially owns at least 20% of QCLS Common Stock on an as-converted basis. The Company’s Chief Executive Officer serves on the board of directors of QCLS.

The Company determined that QCLS is a VIE, since QCLS does not have sufficient equity at risk to finance its own operations without additional subordinated financial support. However, the Company has determined that it is not the primary beneficiary of QCLS. Furthermore, Series G Preferred Stock is not considered in substance common stock, and as such, the equity method of accounting does not apply. The Company recorded its investment in Series G Preferred Stock at its fair value as the Company did not elect the measurement alternative to account for the investment at cost less impairment. Subsequent changes in fair value of the Series G Preferred Stock are recognized in earnings at each reporting period. The fair value of the Series G Preferred Stock was estimated utilizing a Monte Carlo simulation.

The QCLS Series G Warrants were determined to meet the definition of a derivative and were required to be recorded at fair value in accordance with ASC 815. Subsequent changes in the fair value of the QCLS Series G Warrants are recognized in earnings, at each reporting date. The issuance date fair value of the QCLS Series G Warrants was determined utilizing the Black Scholes Merton Method.

The Series G Preferred Stock shares include a 10% dividend, which are payable in cash or shares of QCLS Series G Preferred Stock at the Company’s option, and the Company has elected to receive shares of the QCLS Preferred Stock as Payment in Kind (“PIK”). As of October 31, 2025, and April 30, 2025 the Company owned 8,577 including accrued dividend of 1,577 shares, and 7,831 Series G Preferred Stock shares, respectively.

During the three and six months ended October 31, 2025, the Company recognized a loss for the change in fair value of the Series G Preferred Stock of $3,721,000 and 6,560,000, respectively. The $15,914,000 fair value of the Series G Preferred Stock was estimated utilizing a Monte Carlo simulation with the following assumptions on October 31, 2025: QCLS stock price of $3.95, expected time to settlement of 5.00 years, dividend rate of 10%, discount market interest rate of 12.1%, risk free rate of 3.71%, equity volatility of 125.0% and probability of default of 29.9%.

During the three and six months ended October 31, 2025, the Company recognized a gain of $4,641,000 and a loss of $191,000, respectively, related to the change in the QCLS Series G Warrants fair value. The $8,427,000 fair value of the QCLS Series G Warrants was determined utilizing a Black Scholes Merton model with the following assumptions on October 31, 2025: QCLS stock price of $3.95, exercise price of $3.37, risk free rate of 3.57%-3.98%, equity volatility of 125.0%-160.0% and remaining term of 0.06-3.56 years.

Below is a summary of activity for the Series G Preferred Stock as of October 31, 2025:

Below is a summary of activity for the QCLS Warrants as of October 31, 2025:

Series H Preferred Shares and Warrants

On September 2, 2025, the Company entered into a Securities Purchase Agreement (the “Series H SPA”) with QCLS. Pursuant to the Series H SPA, the Company purchased (i) 3,000 shares of QCLS’s Series H Convertible Preferred Stock (the “Series H Preferred Shares” or “Series H Preferred Stock”), at a stated value of $1,000 per Series G Preferred Share, with an initial conversion price of $5.00 which were initially convertible into 600,000 shares of QCLS Common Stock ; (ii) warrants to purchase up to 600,000 shares of QCLS’s Common Stock with a five-year term (“QCLS Series H Warrant”), for a total purchase price of $3,000,000.

In September 2025, in connection with the QCLS’ 1-for-100 reverse stock split and pursuant to the stock combination event adjustment provisions of the Series H Preferred Shares and QCLS Series H Warrants, the conversion price and the exercise price was adjusted to $3.37 per share, the 3,000 Series H Preferred Shares were adjusted to be convertible into 889,864 shares of QCLS Common Stock and the number of QCLS Series H Warrants was adjusted to purchase 889,864 shares of QCLS Common Stock.

The Series H Preferred Stock is not considered in substance common stock, and as such, the equity method of accounting does not apply. The Company recorded its investment in Series H Preferred Stock at its fair value as the Company did not elect the measurement alternative to account for the investment at cost less impairment. Subsequent changes in fair value of the Series H Preferred Stock are recognized in earnings at each reporting period. The initial fair value of the Series H Preferred Stock of $3,483,000 was estimated utilizing a probability-weighted scenario model, with the following inputs: the fair value of QCLS Common Stock of $3.61, estimated equity volatility of 100.0%, the time to maturity of 1.49 years, the redemption premium of 106%, the liquidation premium of 125%, the conversion price of $5.00 per share, a market interest rate of 19.51%, a risk-free rate of 3.61%, and dividend rate of 7.00%.

The QCLS Series H Warrants were determined to meet the definition of a derivative and were required to be recorded at fair value in accordance with ASC 815. Subsequent changes in the fair value of the QCLS Series H Warrants are recognized in earnings, at each reporting date. The issuance date fair value of the QCLS Series H Warrants of $1,606,000 was determined utilizing the Black Scholes Merton Method using the following inputs: the fair value of QCLS’ s common stock of $3.61, exercise price of $5.00; dividend yield of 0%; remaining term of 5.00 years; equity volatility of 105.0%; and a risk-free interest rate of 3.59%.

The total aggregated fair value of the QCLS Series H Preferred Stock and the QCLS Series H Warrants of $5,089,000 exceeded the total purchase price of $3,000,000 by $2,089,000, which was recognized as a gain on investment in QCLS on the condensed consolidated statement of operations for the three and six months ended October 31, 2025.

During the three and six months ended October 31, 2025, the Company recognized a gain on the change in fair value of the Series H Preferred Stock of $1,350,000. The $4,833,000 fair value of the Series H Preferred Stock was estimated utilizing a probability-weighted scenario model, with the following inputs: the fair value of QCLS Common Stock of $3.95, estimated equity volatility of 130.0%, the time to maturity of 1.33 years, the redemption premium of 106%, the liquidation premium of 125%, the conversion price of $3.37 per share, a market interest rate of 14.44%, a risk-free rate of 3.60%, and dividend rate of 7.00%.

During the three and six months ended October 31, 2025, the Company recognized a gain of $1,409,000 related to the change in the QCLS Series H Warrants fair value. The $3,015,000 fair value of the QCLS Series H Warrants was determined utilizing a Black Scholes Merton model with the following assumptions on October 31, 2025: the fair value of QCLS’ s common stock of $3.95, exercise price of $3.37, risk free rate of 3.63%, equity volatility of 125.0%, and remaining term of 4.84 years.

The Company has determined that QCLS is a VIE, as QCLS does not have sufficient equity at risk to finance its own operations without additional subordinated financial support. However, the Company has determined that it is not the primary beneficiary of QCLS.

Below is a summary of activity for the Series H Preferred Stock as of October 31, 2025:

Below is a summary of activity for the QCLS Series H Warrants as of October 31, 2025: