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Capital Structure
 12 Months Ended
Dec. 31, 2025
Capital Structure [Abstract]  
Capital Structure

7. Capital Structure

 

Common Stock

 

As of December 31, 2025 and 2024, the Company is authorized to issue 400,000,000 and 200,000,000 shares of common stock, respectively, with a par value of $0.00001 per share. As of December 31, 2025 and 2024, the Company had 7,974,380 and 199,110 shares of common stock issued and outstanding, respectively. Holders of 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 preferred stock that the Company may designate in the future.

 

Preferred Stock

 

In October 2021, the Company amended its Certificate of Incorporation and revised the number of preferred stock shares authorized for issuance to 10,000,000 shares at a par value of $0.00001. As of December 31, 2025 and December 31, 2024, there were no shares of preferred stock issued and outstanding.

 

Reverse Stock Split

 

On June 25, 2024, the Company’s stockholders voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within a range of 1-for-5 to 1-for-100. On June 25, 2024, the Company’s Board of Directors determined to effect the reverse stock split of the common stock at a 1-for-100 ratio, which reverse split became effective in the market on July 5, 2024.

 

On January 30, 2025, the Company’s stockholders voted to authorize the Company’s Board of Directors to effect a reverse stock split of the outstanding shares of common stock within a range of 1-for-5 to 1-for-150. On January 30, 2025, the Company’s Board of Directors determined to effect the reverse stock split of the common stock at a 1-for-150 ratio, which reverse split became effective in the market on February 18, 2025.

 

The Company’s primary reasons for effecting the reverse stock splits was to increase the per share price of our common stock to meet Nasdaq’s minimum bid price requirement for continued listing on Nasdaq.

 

Common Stock Offerings

 

On June 27, 2025, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering, 313,564 shares of its common stock, par value $0.00001 per share at a purchase price of $7.50 per share and 1,979,769 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $ of $7.49999 per Pre-Funded Warrant. The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The offering closed on June 30, 2025. The Company received net proceeds of approximately $13.7 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, including the placement agent fees.

 

On June 26, 2025, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering, 192,496 shares of its common stock, par value $0.00001 per share at a purchase price of $5.01 per share and 2,801,516 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $ of $5.00999 per pre-funded warrant. The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The offering closed on June 27, 2025. The Company received net proceeds of approximately $15.9 million from the offering, after deducting the estimated offering expenses payable by the Company of $1.3 million, including the placement agent fees.

On December 30, 2024, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell and issue, in a registered direct offering, 44,333 shares of its common stock, par value $0.00001 per share at a purchase price of $90 per share and 55,667 pre-funded warrants to purchase shares of Common Stock, at a purchase price of $89.985 per Pre-Funded Warrant. The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The offering closed on December 31, 2024. The Company received net proceeds of approximately $8.1 million from the Offering, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.

 

On December 20, 2024, the Company entered into a securities purchase agreement for the sale and issuance of (i) 20,507 units at a public offering price per Unit of $241.50 with each Unit consisting of one share of common stock, par value $0.00001 per share, one Series A warrant to purchase one share of Common Stock at an exercise price of $301.875 per share and one Series B warrant to purchase one share of Common Stock at an exercise price of $301.875) and (ii) 62,309 pre-funded units at a public offering price of $241.485 per Pre-Funded Unit, with each Pre-Funded Unit consisting of one pre-funded warrant exercisable for one share of Common Stock at an exercise price of $0.015 per share, one Series A Warrant and one Series B Warrant. The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The offering closed on December 23, 2024. The net proceeds to the Company from the Offering were approximately $18.2 million, after deducting placement agent’s fees and the payment of other estimated offering expenses associated with the offering that are payable by the Company.

 

At issuance, the aggregate fair value of the warrant liabilities exceeded the net proceeds received in the transaction. The Company needed the net proceeds in order to continue to run operations. Accordingly, the Company recognized a loss on issuance of warrants of approximately $2.3 million in its consolidated statement of operations for the year ended December 31, 2024. This amount reflects the excess of the fair value of the warrant liabilities over the residual proceeds allocable to the other securities issued in the transaction. Subsequently, the warrant liabilities will continue to be remeasured at fair value through earnings until they are exercised, expire, or are otherwise settled. After shareholder approval on January 30, 2025, the strike price and the number of equity shares are now fixed. Therefore, in accordance with ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, the Series A warrants were re-measured utilizing the Black Scholes model and reclassified into equity. The Series A warrants are included in equity in the consolidated balance sheet as of December 31, 2025. The Series B warrants were re-measured utilizing the Black Scholes model immediately before exercise and were fully exercised in February 2025. In addition, approximately $1.7 million of offering-related issuance costs attributable to the warrant liabilities were recorded as expense in the period.

 

On April 23, 2024, the Company entered into an underwritten Agreement with Aegis Capital Corp. (“Aegis”), pursuant to which Aegis acted as the Company’s underwriter on a firm commitment basis in connection with the sale by the Company of an aggregate of 3,333 shares of common stock in a public offering, which included: (i) 1,320 shares of common stock, and (ii) pre-funded warrants to purchase 2,013 shares of common stock. The Pre-Funded Warrants had a nominal exercise price of $0.15. Each share of common stock was sold at an offering price of $1,500, and each Pre-Funded Warrant was sold at an offering price of $1,499.85. The Pre-Funded Warrants are classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date concluding the purchase price approximated the fair value. The Company determined the fair value of the Series A and Series B warrants using the Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity shares in the warrant agreements. The offering closed on April 25, 2024. On May 3 2024, the Company closed on the sale of an additional 136 shares of common stock, upon exercise by the underwriter of the over-allotment option. The Company received net proceeds of approximately $4.6 million, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.

  

At the Market Equity Financing

 

On September 5, 2025, the Company entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Aegis Capital Corp. (the “Agent”), under which the Company may, from time to time, sell shares of the Company’s common stock having an aggregate offering price of up to $100,000,000 in “at the market” offerings through or to the Agent, as sales agent or principal. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. As of December 31, 2025, a total of 935,114 shares of common stock were sold through Aegis Capital Corp. under the Sales Agreement. As of December 31, 2025, the Company has received net proceeds of $5,472,691 after payment of commission fees of $173,341 and other related expenses of $131,990.

Private Placement Offering

 

On November 12, 2024, the Company entered into a Securities Purchase Agreement (“SPA”) with certain investors pursuant to which we sold, in a private placement, senior notes with an aggregate principal amount of $4,375,000 (the “Notes”), and received proceeds before expenses of $3,500,000. The Notes matured on February 12, 2025, with 20% interest rate. As consideration for entering into the SPA, we issued a total of 2,701 shares of common stock of the Company to the Purchasers on November 13, 2024. The common stock and the Notes were recorded at the relative fair values in accordance with ASC 470-20-25-2. The placement agent fee and other offering expenses were allocated based on the aforementioned fair values as a reduction to the carrying amount of the debt and a reduction of the equity in accordance with ASC 505-10. The amortization of the debt discount and issuance costs was recorded in interest income (expense) on the consolidated statement of operations. As of December 31, 2024, the Notes were paid in full.

 

Common Stock Warrants

 

The following warrants were outstanding as of December 31, 2025, each of which is exercisable on a one-for-one basis for shares of the Company’s common stock (i.e., one warrant for one share). All warrants contain standard anti-dilution protections in the event of subsequent rights offerings, stock splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s common stock or capital structure, and none of which have any participating rights for any losses. All Series B warrants, which were issued as a part of the December 20, 2024 public offering, were fully exercised as of February 11, 2025 utilizing the cashless exercise provision in the warrant agreement. In addition, on March 31, 2025, the Company reclassified the Series A warrants from liability to equity upon determining that the warrants no longer required liability classification.

 

Securities into which warrants are convertible  Warrants
outstanding		   Exercise
Price		   Expiration
Date		  Fair
value		 
Common stock (Initial Public Offering)   9   $40,650   October 2026  $170,397 
Common stock (Private Placement)   426   $140,625   April 2027   6,071,114 
Common stock (Series A)   517,598   $48.30   January 2030   7,634,428 
Total   518,033           $13,875,939 

 

The following warrants were outstanding as of December 31, 2024, all of which contain standard anti-dilution protections in the event of subsequent rights offerings, stock splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s common stock or capital structure, and none of which have any participating rights for any losses:

 

Securities into which warrants are convertible   Warrants
outstanding		     Exercise
Price		     Expiration
Date		   Fair
value		  
Common stock (Initial Public Offering)     9     $ 40,650     October 2026   $ 170,397  
Common stock (Private Placement)     426     $ 140,625     April 2027     6,071,114  
Common stock (Series A)     277,778     $ 90     January 2030     6,581,789  
Common stock (Series B)     82,816     $ 301.875     July 2027     21,122,138  
Total     361,029                 $ 33,945,438  

 

The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, depending on the specific terms of the warrant agreement. The Company determined the fair value of the Initial Public Offering and Private Placement warrants using the Black-Scholes pricing model and treated the valuation as equity instruments in consideration of the cashless settlement provisions in the warrant agreements. The warrants are not marked-to-market each reporting period, and thus there is no impact to earnings. Any future exercises of the warrants will be recorded as cash received and recorded in cash, with a corresponding increase to common stock and additional paid-in capital in stockholders’ equity.

The Company used the following assumptions for December 31, 2025 and 2024:

 

  

Initial
Public
Offering
Warrants

(Oct 2021)

  

Private
Placement Warrants

(Apr 2022)

 
Fair value of underlying securities  $2.88   $1.37 
Expected volatility   51.0%   45.0%
Expected term (in years)   5.0    5.0 
Risk-free interest rate   1.13%   2.92%

 

Under ASC 815-40-35-8, Derivatives and Hedging Reclassification of Contracts, shareholder approval on January 30, 2025, initiated the price reset period, resulting in a fixed exercise price for the warrants. As such, the Series A warrants were reclassified to equity and remeasured utilizing the Black Scholes model with the following assumptions:

 

   Series A
Warrants		 
Fair value of underlying securities  $14.75 
Expected volatility   183.38%
Expected term (in years)   4.96 
Risk-free interest rate   4.30%

 

The fair value of the Series B warrants were re-measured prior to exercise using the Black-Scholes model, now that the exercise price has been fixed, based on the following assumptions:

 

    Series B
Warrants		  
Fair value of underlying securities   $ 6.01 – 32.19  
Expected volatility     162.99 – 190.53 %
Expected term (in years)     2.46 – 2.49  
Risk-free interest rate     4.18 – 4.30 %

 

The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, depending on the specific terms of the warrant agreement. The Company allocated the proceeds of the deal based on the fair values for the Series A and Series B warrants. The Company determined the fair value of the warrants using the Monte Carlo pricing model and treated the valuation as a liability in consideration of the variable number of the issuer’s equity shares in the warrant agreements for the year-ended December 31, 2024.

 

The Company used the following assumptions:

 

   Series A
Warrants		   Series B
Warrants		 
Fair value of underlying securities  $0.85   $0.85 
Expected volatility   161.78%   161.78%
Expected term (in years)   5.0    5.0 
Risk-free interest rate   4.29%   4.29%