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STOCKHOLDERS’ EQUITY
 3 Months Ended
Sep. 30, 2025
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 6 — STOCKHOLDERS’ EQUITY

 

Purchase Agreement with Lincoln Park Capital

 

On June 20, 2023, the Company entered into a purchase agreement (the “2023 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company may sell and issue to Lincoln Park, and Lincoln Park is obligated to purchase, up to $20,000,000 of shares of Common Stock over the 36-month term of the 2023 Purchase Agreement. Concurrently with entering into the 2023 Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed to provide Lincoln Park with certain registration rights related to the shares issued under the 2023 Purchase Agreement.

 

In consideration for entering into the 2023 Purchase Agreement, the Company issued 69,602 shares of Common Stock to Lincoln Park as a commitment fee on June 20, 2023.

 

During the quarter ended September 30, 2025 and 2024, no shares of Common Stock to Lincoln Park were sold under the Purchase Agreement.

 

Common Stock Issuances

 

On July 7, 2025, Lunai Bioworks Inc. (“Lunai”) entered into an Exchange Agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”), all of whom are existing shareholders of the Company. Pursuant to the Exchange Agreement, the Investors agreed to exchange an aggregate of $9.7 million in outstanding secured promissory notes (the “Secured Notes”) for $16.1 million in new convertible promissory notes (the “Convertible Notes”), representing a 65% premium to the principal and interest amount of the Secured Notes. The Convertible Notes mature on July 31, 2025, and do not bear any interest. The exchange was completed to restructure the Company’s debt obligations and provide additional flexibility to support strategic initiatives.

 

Immediately following the issuance of the Convertible Noes on July 7, 2025, the Investors elected to convert the entire $16.1 million principal amount into an aggregate of 5.36 million shares of common stock (the “Conversion Shares”), based on the stated $3.00 per share conversion price. The $3.00 per share conversion price of the Convertible Notes represented a premium to the closing price of the Company’s common stock on July 7, 2025, the date of execution and conversion.

 

On July 25, 2025, the Company issued 5,500 shares of Common Stock for settlement of accounts payable valued at $17,050.

 

On September 5, 2025, the Company issued 79,647 shares of Common Stock for settlement of accounts payable valued at $167,259.

 

On September 18, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation of the Company (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), either issued and outstanding or held by the Company as treasury stock, effective as of 12:01 a.m. (New York time) on September 29, 2025 (the “Reverse Stock Split”). All shares and the respective per-share amounts have been retroactively restated to reflect the reverse split. The Common Stock began trading on a reverse stock split-adjusted basis on The Nasdaq Capital Market on September 30, 2025.

  

Stock-based Compensation

 

The Company recognizes compensation costs for stock option awards to employees and directors based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model. During the three months ended September 30, 2025, the Company granted no options.

 

       
    Lunai Bioworks Inc.
Expected term (in years)     5.5  
Volatility     109.45% - 118.99 %
Risk free interest rate     3.86% - 4.40 %
Dividend yield     0 %

 

On August 23, 2024, Avram Miller, a former member of the Company’s board of directors (the “Board of Directors”), forfeited 83,333 shares of Common Stock from the original 100,000 shares of Common Stock for advisory services originally granted to him on October 11, 2023. As consideration for such forfeiture, the Company granted to Mr. Miller, an option to purchase 97,826 shares of Common Stock of the Company with a per-share exercise price of $6.90. The Company determined that this transaction represented a modification of the original award. The Company measured the fair value of the options issued as compared to the fair value of the original issuance and determined that there was no incremental compensation to recognize as the fair value of the options was less than the fair value of the Common Stock. Therefore, the Company will recognize the remaining fair value of the original award over the remaining vesting period, which is one year. The Company recognized stock-based compensation expense of $185,373 related to the vesting of the stocks options during the quarter ended September 30, 2025. At September 30, 2025, the Company had zero unrecognized compensation cost related to the options which fully vested on August 23, 2025.

 

In total, the Company recognized stock-based compensation expense of $181,312 net a recapture of $127,032 related to options and $36,973 related to restricted stock awards for the three months ended September 30, 2025. For the three months ended September 30, 2024, the Company recognized stock-based compensation expense related to options of $357,648. At September 30, 2025, the Company had approximately $192,608 of unrecognized compensation cost related to non-vested options.