NOTE 8 – WARRANTS

During the year ended December 31, 2024, the Company issued warrants to purchase an aggregate of 1,500 shares of Common Stock in exchange for consulting services. The warrants were issued on March 1, 2024 with an exercise price equal to $8.13 per share. These warrants become exercisable in twelve equal monthly instalments commencing the day after issue date. The warrants expire ten years from the date of issuance.

During the year ended December 31, 2024, the Company issued the September 2024 PIPE Warrants to purchase an aggregate of 2,439,026 shares of Common Stock as described in Note 6. The September 2024 PIPE Warrants have an exercise price equal to $3.85 per share and 1,219,513 warrants have term of five years and 1,219,513 have a term of two and half years. Additionally, the Company issued the Placement Agent Warrants to purchase an aggregate of 85,366 shares of Common Stock with an exercise price of $5.13 per share and term of five years as described in Note 6.

For the year ended December 31, 2024 and 2023, total stock-based compensation expense related to the Company’s warrants was approximately $8,000 and $0, respectively, and is recognized within general and administrative expense on the consolidated statements of operations and comprehensive loss.

No warrants were expired/cancelled or exercised during the twelve months ended December 31, 2024.

AlloMek Warrants

During the year ended December 31, 2022, the Company issued warrants to purchase an aggregate of 50,000 shares of Common Stock (the “AlloMek Warrants”) to certain sellers in connection with the acquisition of AlloMek. The AlloMek Warrants were issued on October 11, 2022, and were immediately exercisable at $37.60 per share and expire five years from the date of issuance. The total grant date fair value of the AlloMek Warrants was determined to be approximately $0.5 million, as calculated using the Black-Scholes model and were capitalized and included in intangible assets. The assumptions used in the Black-Scholes calculation were as follows: volatility 55.7%; duration five years; and a risk-free rate of 4.14%.

As of December 31, 2024 and 2023, 50,000 AlloMek Warrants were outstanding, respectively.

Alpha-5 Warrants

During the year ended December 31, 2022, the Company issued warrants to purchase an aggregate of 50,000 shares of Common Stock (the “Alpha-5 Warrants”) to certain sellers in connection with the acquisition of Alpha-5. The Alpha-5 Warrants were issued on June, 21, 2022, were immediately exercisable at $37.60 per share and expire five years from the date of issuance. The total grant date fair value of the Alpha-5 Warrants was determined to be approximately $0.4 million, as calculated using the Black-Scholes model and were recorded as an increase to additional paid-in capital. This amount was included as part of the consideration paid for the Alpha-5 acquisition and were included as part of the purchase price allocation accordingly. The assumptions used in the Black-Scholes calculation were as follows: volatility 55.7%; duration five years; and a risk-free rate of 3.38%.

As of December 31, 2024 and 2023, 50,000 Alpha-5 Warrants were outstanding, respectively.

PIPE Warrants

During the year ended December 31, 2021, the Company issued PIPE Warrants to purchase an aggregate of 433,999 shares of Common Stock to certain investors in connection with the November 2021 Private Placement. The PIPE Warrants were issued on November 24, 2021, were immediately exercisable, and expire five years from the date of issuance at $70.00 per share, subject to adjustment as set forth in the PIPE Warrants. Due to a certain anti-dilution provision, the exercise price of each 2021 PIPE Warrant was reduced to $20.00 per share (the “Warrant Modification”) as a result of the September 2024 Offering. The Company recognized the effect of the Warrant Modification as a dividend of $359,656.

As of December 31, 2024 and 2023, 433,999 PIPE Warrants were outstanding, respectively.

IPO Warrants

During the year ended December 31, 2021, the Company issued Public Warrants to purchase an aggregate of 276,000 shares of Common Stock in its Initial Public Offering. Simultaneously with the consummation of the closing of the Initial Public Offering, the Company issued the underwriters a total of 13,800 Representative Warrants that became exercisable commencing six (6) months following issuance at an exercise price of $120.00 per share and expire five years from issuance.  

The Company evaluated the IPO Warrants based on an assessment of the IPO Warrants’ specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The IPO warrants are classified as liabilities and remeasured at each reporting period.

As of December 31, 2024 and 2023, 220,000 Public Warrants and 13,800 Representative Warrants were outstanding, respectively.  

As of December 31, 2024, the fair value of the Public Warrants was approximately $0.36 per Public Warrant based on the closing price of the Public Warrants on The Nasdaq Capital Market. The fair value of the Representative Warrants was approximately $0.374 per Representative Warrant which was based on the relative fair value to the Public Warrants.

Warrant activity for the years ended December 31, 2024 and 2023 was as follows:

Warrants exercisable at December 31, 2024 were as follows:

No warrants expired/cancelled or exercised during the year ended December 31, 2024.