NOTE 7 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue an aggregate of 105,000,000 shares. The authorized capital stock is divided into: (i) 100,000,000 shares of Common Stock having a par value of $0.0001 per share and (ii) 5,000,000 shares of preferred stock having a par value of $0.0001 per share.

Common Stock

The Company had 1,041,582 and 1,301,921 shares of its Common Stock issued and outstanding at December 31, 2023 and 2022, respectively.

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of the stockholders. Our Charter and Amended and Restated Bylaws (the “Bylaws”) do not provide for cumulative voting rights.

In addition, the holders of our Common Stock will be entitled to receive ratably such dividends, if any, as may be declared by the Board out of legally available funds; however, the current policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our Common Stock will be entitled to share ratably in all assets that are legally available for distribution.

Holders of our Common Stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Common Stock. The rights, preferences and privileges of the holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Effective January 2, 2024, the Company amended its certificate of incorporation to effect a one-for-twenty (1:20) reverse stock split of our outstanding shares of Common Stock. No fractional shares were issued as a result of the reverse stock split. Any fractional shares resulting from the reverse stock split were paid in cash. The reverse stock split did not otherwise affect any of the rights currently accruing to holders of our Common Stock. See Note 16 for additional information.

2021 Stock Incentive Plan

The Company’s Board and stockholders adopted and approved the 2021 Stock Incentive Plan (the “2021 Plan”) which took effect on July 15, 2021. The 2021 Plan allows for the issuance of securities, including stock options, restricted stock, and restricted stock units (“RSUs”) to employees, Board members and consultants.

As of January 1, 2023, the number of shares of Common Stock available for issuance under the 2021 Plan automatically increased by 39,065 to 137,389. The Company issued an aggregate of 44,000 and 40,000 stock options under the 2021 Plan during the years ended December 31, 2023 and 2022, respectively. Stock options issued under the 2021 Plan vest over a period of three years. Stock-based compensation related to stock options was $520,533 and $439,979, respectively, for the years ended December 31, 2023 and 2022. On December 19, 2023, the remaining shares available under the 2021 Plan were added to the Company’s 2023 Stock Incentive Plan (the “2023 Incentive Plan”, or “2023 Plan”). There will be no new issuances under the 2021 Plan.

2023 Stock Incentive Plan

The Board and stockholders have adopted and approved the 2023 Plan which took effect on December 19, 2023. The 2023 Plan allows for the issuance of securities, including stock options, restricted stock, and restricted stock units (“RSUs”) to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2023 Plan was 125,000 shares plus 28,389 unused shares reserved under the 2021 Plan, which will, on January 1 of each calendar year, beginning on January 1, 2024 and ending on and including January 1, 2033, unless the Board decides otherwise, automatically increase to equal to the lessor of (A) three percent (3%) of the number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year or (B) such smaller number of Shares as is determined by the Board.

As of December 31, 2023, 153,389 total shares were available under the 2023 Plan, of which no shares were issued and outstanding and 153,389 shares were available for potential issuances.

2022 Common Stock Transactions

During the year ended December 31, 2022, the Company issued 163,044 shares of Common Stock in connection with the business combination with Alpha-5 as referenced in Note 5. 

During the year ended December 31, 2022, the Company issued 135,000 shares of Common Stock in connection with the acquisition of AlloMek as referenced in Note 5.

During the year ended December 31, 2022, the Company entered into a comprehensive Settlement and Cooperation Agreement (“the Settlement and Cooperation Agreement”) with certain shareholders (collectively, the “Camac Group”) resolving all outstanding issues between the parties. Pursuant to the Settlement and Cooperation Agreement, the Camac Group agreed to a three-year standstill provision and the parties agreed to dismiss with prejudice the pending Delaware litigation against the Company and the Board filed by the Camac Group. The Company purchased all 160,264 shares of Common Stock held by the Camac Group at a price of $20.006 per share, the equivalent to the 5-day volume-weighted average price of the Common Stock. Additionally, the Company reimbursed approximately $698,000 of certain fees and expenses of the Camac Group, which are included as litigation settlements in the statements of operations.

All repurchased shares were cancelled and recorded within Accumulated Deficit on the Company’s consolidated balance sheet as of December 31, 2022. The Company recorded the reimbursed fees and expenses within Litigation settlements on the consolidated statement of operations for the year ended December 31, 2022.

During the year ended December 31, 2022, the Company entered into settlement agreements with certain shareholders for approximately $300,000, which are included as litigation settlements in the statements of operations.

2023 Common Stock Transactions

On July 20, 2023, the Company announced that its Board authorized the repurchase, through a $4.0 million tender offer of up to approximately 285,000 shares of the Company’s outstanding common stock at a cash purchase price of $14.00 per share (the “Tender Offer”). The Company launched the Tender Offer on August 9, 2023 and it was completed on September 8, 2023.

On September 14, 2023, the Company disclosed the results of the Tender Offer. A total of 266,171 shares of Common Stock (the “Tender Offer Shares”) were validly tendered and not properly withdrawn at a purchase price of $14.00 per share for an aggregate purchase price of $3,726,416, including fees and expenses of $150,000 relating to the Tender Offer. The Company had 1,040,749 shares of Common Stock outstanding following payment for the Tender Offer Shares purchased in the Tender Offer. The Tender Offer Shares were retired and cancelled following the closing of the Tender Offer.

Restricted Stock Units

During the year ended December 31, 2021, the Company issued its chief executive officer, Dr. Marques, 10,000 RSUs with a grant date fair value of $288,000. As of December 31, 2023, 5,832 RSUs were vested. The Company recognized approximately $72,000 and $96,000 of stock-based compensation expense for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the remaining unamortized RSU compensation expense was approximately $117,000, and will be expensed quarterly through the year ended December 31, 2024.

Restricted Stock

There was no restricted stock issued during the year ended December 31, 2023.

During the year ended December 31, 2022, the Company issued an aggregate of 13,972 shares of restricted Common Stock to certain consultants for services provided. These 13,972 shares of restricted Common Stock had a total grant date fair value of approximately $282,000 and vested immediately. The Company recognized approximately $282,000 of stock-based compensation expense for these restricted stock issuances for year ended December 31, 2022.