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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 10 – STOCKHOLDERS’ EQUITY

 

Designation of Series B Preferred Stock

 

Effective June 26, 2023, the Company filed a Certificate of Designation, Preferences, Rights and Limitations of the Series B Preferred Stock (the “Series B Preferred Stock”) with the Secretary of the State of Delaware that designated 787,754 shares of the Company’s authorized and unissued preferred stock as convertible Series B Preferred Stock at a par value of $0.00001 per share.

 

Holders of the Series B Preferred Stock are not entitled to receive dividends and do not have redemption or voting rights. Furthermore, the Series B Preferred Stock does not have a liquidation preference. Shares of Series B Preferred Stock are automatically convertible into shares of the Company’s common stock at a ratio of 100 shares of common stock for each share of Series B Preferred Stock upon stockholder approval of such conversion.

 

As of March 31, 2026 and December 31, 2025, there were 15,759 issued and outstanding shares of Series B Preferred Stock.

 

Designation of Series X Preferred Stock

 

On July 25, 2024, the Company revoked the authorization to issue shares of the Company’s Series A Preferred Stock, par value $0.00001 per share (the “Series A Preferred Stock”) and concurrently authorized the issuance of up to 9,211,246 shares of the Series X Preferred Stock, a then new class of preferred stock.

 

Holders of the Series X Preferred Stock are entitled to receive dividends on shares of the Series X Preferred Stock on an as-if-converted-to-Common-Stock basis, without regard to any beneficial ownership limitation described in a letter of transmittal, equal to and in the same form and manner as dividends are paid to holders of the shares of Common Stock. Subject to any requirements of the General Corporation Law of the State of Delaware, the Series X Preferred Stock has no voting rights. The Series X Preferred Stock ranks on parity with shares of Common Stock as to distributions of assets upon liquidation, dissolution, or winding up of the Company.

 

As consideration for the Scienture Merger, the shares of Scienture common stock issued and outstanding immediately prior to the “Effective Time” of the mergers were converted into the right to receive, in the aggregate, (i) 291,536 shares of the Company’s common stock and (ii) 6,826,753 shares of the Company’s Series X Preferred Stock, each share of which was convertible into one share of common stock.

 

In September 20, 2024, all previously issued shares of Series X Preferred Stock were converted into a total of 6,826,753 shares of common stock. As such, there were no issued and outstanding shares of Series X Preferred Stock as of December 31, 2025.

 

Hudson Global Ventures Stock Purchase Agreement

 

On October 4, 2023, the Company entered into a Securities Purchase Agreement the “Hudson SPA”) with Hudson Global Ventures, LLC (“Hudson”). Under the terms of the Hudson SPA, the Company agreed to sell, and Hudson agreed to purchase, Two Hundred Ninety (290) shares of Series C Preferred Stock (the “Purchased Shares”) at a price of $1,000 per share and a Warrant to purchase up to 41,193 shares of Common Stock. Additionally, pursuant to the Agreement, 40,000 shares of Common Stock were issued to Hudson upon closing for a commitment fee. The Company received $250,000 in exchange for the Purchased Shares, Common Stock, and Warrants, net of issuance costs.

 

On July 12, 2024, the Company converted 290 shares of Series C Preferred Stock into 52,158 shares of common stock at the election of the holder.

 

 

Common Stock

 

The Company did not issue any shares of common stock during the three-months ended March 31, 2026. During the year ended December 31, 2025, the Company issued an aggregate of 7,103,614 shares of common stock for net proceeds of $9,008,199.

 

Private Placements

 

In July 2025, the Company’s board of directors approved a capital raise in an aggregate amount of up to $3,000,000 pursuant to a form of Common Stock Purchase Agreement (the “Purchase Agreement”). During July 2025, the Company sold an aggregate of 1,078,614 shares of common stock for aggregate proceeds of $1,679,993, pursuant to Purchase Agreements with eight investors.

 

Registered Direct Offering

 

On August 15, 2025, the Company issued an aggregate of 3,225,000 shares of common stock for aggregate proceeds of $3,549,184, pursuant to a Securities Purchase Agreement with several institutional investors as part of a registered direct offering made pursuant to a shelf registration statement on Form S-3 (File No. 333- 289198), which was originally filed by the Company with the Securities and Exchange Commission (the “Commission”) on August 1, 2025, and declared effective on August 8, 2025.

 

ATM Program

 

On September 19, 2025, the Company entered into an Equity Distribution Agreement (the “ATM Agreement”) with Maxim Group LLC (“Maxim”), acting as the sole sales agent for the offer and sale of the Company’s common stock, par value $0.00001 per share, through an “at-the-market” offering program (the “ATM Program”). These shares are issued pursuant to the Shelf Registration Statement on Form S-3 (File No. 333-289198), which was filed with the Commission on August 1, 2025, and declared effective on August 8, 2025. Under the terms of the ATM Agreement, the Company may sell shares having an aggregate gross sales price of up to $18,792,009, subject to a commission of 3.0% of the gross sales price payable to Maxim, along with the reimbursement of certain specified expenses.

 

During the year ended December 31, 2025, the Company issued and sold an aggregate of 15,722,659 shares of common stock under the ATM Program. These transactions resulted in aggregate net proceeds to the Company of $14,871,106, after deducting the applicable sales commissions and offering expenses. This activity represents a significant increase from the 100 shares of common stock previously issued under the program as of December 31, 2025. The Company did not issue or sell shares under the ATM Program during the three months ended March 31, 2026.

 

Restricted Common Stock

 

As of March 31, 2026 and December 31, 2025, the Company had 1,200,898 restricted shares of common stock outstanding under the option plans. As of March 31, 2026 and December 31, 2025, 185,898 shares were vested. The Company recorded stock-based compensation expense of $102,320 in the consolidated statements of operations for the three months ended March 31, 2026. Unrecognized stock compensation outstanding on these grants was $636,673 as of March 31, 2026.

 

Equity Compensation Awards

 

Each independent member of the Company’s board of directors is to receive an annual grant of restricted common stock of the Company equal to $55,000 in value on April 1st of each year (or such date thereafter as the awards are approved by the board of directors), and valued on such same date, based on the closing sales price on such date (or the first business day thereafter), which restricted stock awards will vest at the rate of 1/4th of such awards over the following four calendar quarters, subject to such directors continued service to the Company.

 

The board of directors and the Company’s stockholders approved an amendment to the Second Amended and Restated 2019 Equity Incentive Plan (the “Plan”), which increased the available shares under the Plan to 5,000,000 shares of the common stock.