NOTE 6 – STOCKHOLDERS’ EQUITY

The Company has an aggregate of 105,000,000 authorized shares. The authorized shares are 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 7,443,577 and 1,394,263 shares of its Common Stock issued and outstanding at June 30, 2025 and December 31, 2024, 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 Second Amended and Restated Certificate of Incorporation, as amended (the “Charter”), and Amended and Restated 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 Charter to effect a one-for-twenty (1:20) reverse stock split of its 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.

2023 Stock Incentive Plan

The Board and stockholders have adopted and approved the Company’s 2023 Stock Incentive Plan (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 Company’s 2021 Stock Incentive 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 by an amount 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 of Common Stock as is determined by the Board. 

On January 1, 2025, the number of shares of Common Stock available for issuance under the 2023 Plan automatically increased by 41,828 shares. As of June 30, 2025, 264,221 total shares were available under the 2023 Plan, of which 90,068 shares were issued and outstanding and 174,153 shares were available for potential issuances.

September 2024 Private Placement 

On September 26, 2024, the Company entered into a securities purchase agreement (the “September 2024 Private Placement”) with an institutional investor, pursuant to which the Company agreed to sell pre-funded warrants (the “September 2024 Pre-Funded Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock at an exercise price of $0.001 per share, Series A warrants (the “Series A Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock at an exercise price of $3.85 per share, and Series B warrants (the “Series B Warrants” and, together with the Series A Warrants, the “September 2024 PIPE Warrants”) to purchase up to an aggregate of 1,219,513 shares of Common Stock with an exercise price of $3.85 per share. The combined purchase price per September 2024 Pre-Funded Warrant and accompanying September 2024 PIPE Warrants was $4.099. Aggregate gross proceeds from the September 2024 Private Placement were approximately $4.5 million and the September 2024 Private Placement closed on September 30, 2024.

The September 2024 Pre-Funded Warrants are exercisable immediately upon issuance and expire when exercised in full. The Series A Warrants are exercisable immediately upon issuance and have a term of exercise equal to five (5) years from the date of issuance. The Series B Warrants are exercisable immediately upon issuance and have a term of exercise equal to eighteen (18) months from the date of issuance.

A holder of the September 2024 Pre-Funded Warrants and the September 2024 PIPE Warrants may not exercise any portion of such holder’s September 2024 Pre-Funded Warrants or September 2024 PIPE Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise. In the event of certain fundamental transactions, holders of the September 2024 PIPE Warrants will have the right to receive the Black Scholes Value of their warrant calculated pursuant to a formula set forth in the warrant, payable either in cash or in the same type or form of consideration that is being offered and being paid to the holders of Common Stock.

In connection with the September 2024 Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), dated as of September 26, 2024, with the investor, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the shares of Common Stock underlying the September 2024 Pre-Funded Warrants and the September 2024 PIPE Warrants no later than fifteen (15) days after the date of the Registration Rights Agreement (the “Registration Statement”), and to use its best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than forty-five (45) days following the date of the Registration Rights Agreement (or ninety (90) days following the date of the Registration Rights Agreement in the event of a “full review” by the SEC). The Registration Statement was declared effective by the SEC on October 11, 2024.

The net proceeds to the Company from the September 2024 Private Placement were approximately $4.5 million, after deducting placement agent fees and offering expenses payable by the Company. In addition, the Company issued to the placement agent or its designees warrants (the “September 2024 Placement Agent Warrants”) to purchase up to an aggregate of 85,366 shares of Common Stock at an exercise price equal to $5.125 per share. The September 2024 Placement Agent Warrants have substantially the same terms as the September 2024 PIPE Warrants, are exercisable immediately upon issuance and have a term of five (5) years from the date of issuance. The Company intends to use the net proceeds received from the September 2024 Private Placement for working capital and general corporate purposes.

The September 2024 PIPE Warrants met the requirement for equity classification. The Company computes the fair value of warrants and options using a Black-Scholes model. The expected term used for warrants is the contractual life. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

During the six months ended June 30, 2025, all remaining 871,000 September 2024 Pre-Funded Warrants were exercised resulting in 871,000 shares of Common Stock being issued in the six months ended June 30, 2025, and there are no September 2024 Pre-Funded Warrants outstanding.

As of June 30, 2025, all 1,219,153 of the September 2024 Pre-Funded Warrants were paid, issued and exercised. In addition, the September 2024 PIPE Warrants have not been exercised as of June 30, 2025.  

At The Market Offering Agreement with H.C. Wainwright & Co., LLC

On November 26, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of Common Stock. As of December 31, 2024, the Company was authorized to offer and sell up to $2,076,000 of its Common Stock pursuant to the ATM Agreement.

On June 20, 2025, the Company increased the maximum aggregate offering price of the shares of Common Stock issuable under the ATM Agreement, from $2,076,000 to $4,227,000 and filed a prospectus supplement to register an aggregate of $2,151,000 of additional shares of Common Stock available to be sold under the ATM Agreement.

During the quarter ended June 30, 2025, the Company sold an aggregate of 252,600 shares of Common Stock under the ATM Agreement at a weighted average price of $1.47 per share for gross proceeds of $370,160 and net proceeds of $358,037. During the six months ended June 30, 2025, the Company sold an aggregate of 692,600 shares of Common Stock under the ATM Agreement at a weighted average price of $3.00 per share for gross proceeds of $2,075,688 and net proceeds of $2,010,782.

May 2025 Public Offering

On May 6, 2025, the Company entered into securities purchase agreements with investors (the “May 2025 Purchase Agreements”) pursuant to which the Company agreed to sell an aggregate of (i) 3,094,284 shares (the “May 2025 Shares”) of Common Stock, (ii) 477,144 pre-funded warrants (the “May 2025 Pre-Funded Warrants”) to purchase up to an aggregate of 477,144 shares of Common Stock (the “May 2025 Pre-Funded Warrant Shares”), (iii) 3,571,428 Series C Common Warrants (the “Series C Common Warrants”) to purchase up to an aggregate of 3,571,428 shares of Common Stock, and (iv) 3,571,428 Series D Common Warrants (the “Series D Common Warrants” and, together with the Series C Common Warrants, the “May 2025 Common Warrants”) to purchase up to an aggregate of 3,571,428 shares of Common Stock. Each May 2025 Share, or May 2025 Pre-Funded Warrant in lieu thereof, was sold together with a Series C Common Warrant to purchase one share of Common Stock and a Series D Common Warrant to purchase one share of Common Stock in a best efforts public offering (the “May 2025 Public Offering”).

The public offering price for each May 2025 Share and accompanying May 2025 Common Warrants was $1.40, and the public offering price for each May 2025 Pre-Funded Warrant and accompanying May 2025 Common Warrants was $1.399. The May 2025 Pre-Funded Warrants have an exercise price of $0.001 per share, are exercisable immediately and will expire when exercised in full. The Series C Common Warrants have an exercise price of $1.40 per share, are exercisable upon issuance and will expire five years thereafter. The Series D Common Warrants have an exercise price of $1.40 per share, are exercisable upon issuance and will expire 18 months thereafter. Simultaneously with the closing of the May 2025 Public Offering, certain investors exercised Series D Common Warrants to purchase an aggregate of 914,286 shares of Common Stock, resulting in additional gross proceeds of approximately $1.3 million. In addition, all May 2025 Pre-Funded Warrants were exercised simultaneously with the closing of the May 2025 Public Offering, resulting in the issuance of 477,144 May 2025 Pre-Funded Warrant Shares.

A holder will not have the right to exercise any portion of the May 2025 Common Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the May 2025 Common Warrants. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation, which may not exceed 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the May 2025 Common Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to the Company.

The net proceeds of the May 2025 Public Offering, after deducting the placement agent fees and estimated offering expenses payable by the Company and excluding the net proceeds from the exercise of the May 2025 Common Warrants, were approximately $4.2 million. The aggregate gross proceeds from the May 2025 Public Offering and the exercise of the Series D Common Warrants were approximately $6.3 million. The Company intends to use the net proceeds from the May 2025 Public Offering for general corporate purposes, which includes, without limitation, ongoing research and pre-clinical studies, clinical trials, the development of new biological and pharmaceutical technologies, investing in or acquiring companies that are synergistic with or complementary to its technologies, licensing activities related to its current and future product candidates, and the development of emerging technologies, investing in or acquiring companies that are developing emerging technologies, licensing activities, or the acquisition of other businesses and working capital. The May 2025 Public Offering closed on May 7, 2025.

In addition, the Company issued to the placement agent or its designees warrants (the “May 2025 Placement Agent Warrants”) to purchase up to an aggregate of 250,000 shares of Common Stock at an exercise price equal to $1.75 per share. The May 2025 Placement Agent Warrants have substantially the same terms as the Series C Common Warrants, are exercisable immediately upon issuance and have a term of five (5) years from the date of the May 2025 Purchase Agreements.

The warrants issued in connection with the May 2025 Public Offering met the requirement for equity classification. The Company computes the fair value of warrants and options using a Black-Scholes model. The expected term used for warrants is the contractual life. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.

Restricted Stock Units

During the three months ended June 30, 2025 and 2024, the Company issued a total of 0 and 833 shares of Common Stock, respectively, pursuant to the vesting of RSUs. The Company recognized approximately $0 and $24,000 of stock-based compensation expense for the three months ended June 30, 2025 and 2024, respectively, in relation to the vesting of historically granted RSUs.

During the six months ended June 30, 2025 and 2024, the Company issued a total of 0 and 2,499 shares of Common Stock, respectively, pursuant to the vesting of RSUs. The Company recognized approximately $0 and $72,000 of stock-based compensation expense for the six months ended June 30, 2025 and 2024, respectively, in relation to the vesting of historically granted RSUs.

During the three and six months ended June 30, 2025 and 2024, the Company did not grant any RSUs or restricted stock awards. As of June 30, 2025, there were no outstanding RSUs and no more remaining unamortized RSU compensation expense.