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Shareholders’ Equity
 6 Months Ended
Jun. 30, 2025
Shareholders’ Equity [Abstract]  
SHAREHOLDERS’ EQUITY

9. SHAREHOLDERS’ EQUITY

 

Common Stock

 

As of June 30, 2025 and December 31, 2024, the Company had 100,000,000 authorized shares of common stock. The Company had 12,575,983 and 7,903,850 shares of common stock issued and outstanding, as of June 30, 2025 and December 31, 2024, respectively. Each share of common stock is entitled to one vote.

 

On February 7, 2025, the Board approved and implemented a reverse stock split ratio of 1-for-2.6, which provided that every 2.6 shares of its issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. All share and per share amounts in the accompanying unaudited condensed financial statements and footnotes have been retrospectively adjusted for the reverse stock split.

 

On May 12, 2025, the Company consummated the IPO of 3,375,000 shares of its common stock at a price of $4.00 per share, generating net proceeds to the Company of $11.6 million after deducting underwriting discounts, offering expenses and the value of the Advisory Warrant liability. Out of the total shares issued, 500,000 shares were purchased by Inscobee,  

In connection with the closing of the IPO, the 2022 Convertible Notes and 2021 Convertible Note automatically converted into shares of common stock. Pursuant to the terms of the 2021 Convertible Note and 2022 Convertible Notes , all outstanding accrued and unpaid interest owed under the 2021 Convertible Note and 2022 Convertible Notes was to convert into common stock simultaneously with the consummation of a Qualified Offering. An aggregate of $499,222 of outstanding principal and accrued interest under the 2022 Convertible Notes and 2021 Convertible Note, net of unamortized debt discount of $273,324, was converted to common stock, resulting in the issuance of an aggregate of 297,133 shares of Company’s common stock, based on a conversion price of $2.60 per share, as set forth in the 2021 Convertible Note and 2022 Convertible Notes.

 

Immediately following the IPO on May 16, the board of directors approved the grant of 750,000 and 250,000 shares of the Company’s common stock to the CEO and Chief Medical Officer of the Company, respectively. Such stock were issued under the Apimeds Pharmaceuticals US, Inc. 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”) and are fully vested and unrestricted. The value of the fully vested shares granted was determined by the value of the stock on the quoted trading price of $1.70 per share and in aggregate of $1,700,000, and recorded as stock-based compensation - stock grants, with $1,275,000 and $425,000 allocated to general and administrative Research and development expenses, respectively, for the three and six month periods ended June 30, 2025.

 

Warrants

 

In connection with the IPO, the Company entered into an Underwriting Agreement, dated May 8, 2025, between the Company and its underwriter. The Company also agreed to issue warrants to purchase an aggregate of 168,750 shares of common stock (the “Representative Warrants”), each dated May 12, 2025, to underwriter and its designees. The Placement Agent Warrants have an exercise price of $5.00 per share and also feature a cashless exercise option. The initial exercise date of the Underwriter Warrants is November 4, 2025.

 

The Company accounts for Placement Agent Warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”). The measurement of fair value of the Placement Agent Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $1.81, exercise price of $5.00, term of 5 years, volatility of 78%, risk-free rate of 4.09%, and expected dividend rate of 0.0%). The grant date fair value of these Placement Agent Warrants was estimated to be $139,388 on May 12, 2025, and was reflected as a reduction to additional paid-in capital as of May 12, 2025.

 

On August 5, 2025, the Company issued the Advisor Warrants to purchase 202,500 shares of Company common stock, par value $0.01 per share at a purchase price equal to $4.00 per share, with expiration date of October 19, 2032.

 

Preferred Stock

 

On December 5, 2023, the Company authorized 10,000,000 shares of preferred stock with a par value of $0.01. The rights and preferences of preferred shareholders have not been determined as of the date of filing. The Company had no preferred shares issued or outstanding as of June 30, 2025, and August 5, 2025.