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

NOTE 4 - STOCKHOLDERS’ EQUITY

 

Warrant Exercise and Issuance

 

On February 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of 3,351,580 shares of its Common Stock (collectively, the “Existing Warrants”), to exercise their warrants at a reduced exercise price of $2.33 per share, in exchange for the issuance of new warrants (the “New Warrants”) as described below (the “Warrant Exercise and Issuance”). The aggregate gross proceeds from the exercise of the Existing Warrants and the payment of the New Warrants, as described below, was approximately $8.1 million, before deducting cash issuance costs in the amount of $595,364. The reduction of the exercise price of the Existing Warrants and the issuance of the New Warrants was structured as an at-market transaction under Nasdaq rules. Of the 3,351,580 shares of Common Stock underlying the Existing Warrants, 1,201,580 shares issuable to Auctus Fund, LLC (“Auctus”) were held in abeyance as of December 31, 2024, due to Auctus’ maximum beneficial ownership limitation (the “Abeyance Shares”). On March 20, 2025, the Company issued 63,525 of these shares, reducing the remaining Abeyance Shares to 1,138,055. As of September 30, 2025, the Company had issued an aggregate of 2,213,525 shares of Common Stock. Such Abeyance Shares have been fully paid for and are issuable upon notice from Auctus to the Company. See Note 6 – Subsequent Events – for additional details regarding shares issued to Auctus subsequent to September 30, 2025.

 

 

In consideration for the immediate exercise of the Existing Warrants for cash and the payment of $0.125 per share underlying the New Warrants, the exercising holders received the New Warrants to purchase shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The New Warrants will be exercisable for a period of five years into an aggregate of 2,513,686 shares of Common Stock at an exercise price of $2.43 per share. The securities offered in the private placement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company agreed to file a resale registration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants issued in the private placement. Such resale registration statement was filed and was declared effective by the SEC on April 18, 2024. In connection with the transaction described above, the Company entered into a financial advisory services agreement, dated February 5, 2024, with Roth Capital Partners, LLC (“Roth”), pursuant to which the Company has paid Roth a cash fee of approximately $528,000 for its services, in addition to reimbursement for certain expense. During the nine months ended September 30, 2024, the Company incurred an aggregate of $595,364 of cash issuance costs related to the Warrant Exercise and Issuance.

 

Prior to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed the form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Under the New Warrants, the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the New Warrants and not result in a change of control of the Company. As a result, such New Warrants do not meet the criteria for equity treatment. Additionally, certain New Warrants contain adjustments to the settlement amount based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and, accordingly, such New Warrants are not considered indexed to the Company’s own stock and are not eligible for an exception from derivative accounting. See Note 5 – Fair Value Measurement for details regarding the valuation of warrants accounted for as derivative liabilities.

 

Warrants

 

See Note 5 – Fair Value of Financial Instruments for details regarding the valuation of warrants accounted for as derivative liabilities.

 

A summary of the Company’s warrant activity and related information follows:

 

           Weighted 
       Weighted   Average 
       Average   Remaining 
   Number of   Exercise   Life 
   Warrants   Price   In Years 
Outstanding, January 1, 2025   3,951,634   $5.22      
Expired   (250)   60.00      
Outstanding, September 30, 2025   3,951,384   $5.21    2.55 
                
Exercisable, September 30, 2025   3,951,384   $5.21    2.55 

 

Stock Options

 

On February 14, 2025, the Company granted options to purchase an aggregate of 2,152,908 shares of the Company’s common stock at an exercise price of $2.46 per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory Board. The options had an aggregate grant date fair value of $4,044,250 and vest as follows: (i) options to purchase an aggregate 323,459 shares of common stock vest monthly over one year, and (ii) options to purchase an aggregate of 1,829,449 shares of common stock vest to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company is recognizing the grant date fair value of the options on a straight-line basis over the vesting period.

 

 

On June 5, 2025, the Company granted an option to purchase 25,000 shares of the Company’s common stock at an exercise price of $1.78 per share to an employee. The option had a grant date fair value of $34,250 and vests to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company is recognizing the grant date fair value of the option on a straight-line basis over the vesting period.

 

On October 13, 2025, the Company granted an option to purchase 25,000 shares of the Company’s common stock at an exercise price of $1.62 per share to an employee. See Note 6 – Subsequent Events for additional details.

 

In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

 

   For the Nine Months Ended 
   September 30, 
   2025   2024 
Risk free interest rate   4.03 - 4.40%    4.14 - 4.30% 
Expected term (years)   2.77 - 5.38    2.77 - 5.38 
Expected volatility   98.14 - 99.22%    101 - 102% 
Expected dividends   0.00%   0.00%

 

There were no stock options granted during the three months ended September 30, 2025 or 2024. Options granted during the nine months ended September 30, 2025 and 2024 had a weighted average grant date fair value per share of $1.87 and $1.11 per share, respectively.

 

A summary of the stock option activity during the nine months ended September 30, 2025 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining     
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
Outstanding, January 1, 2025   3,263,467   $2.63           
Granted   2,177,908    2.45           
Exercised   (29,249)   1.45           
Forfeited   (149,153)   2.23                
Outstanding, September 30, 2025   5,262,973   $2.58    7.8   $- 
                     
Exercisable, September 30, 2025   3,805,964   $2.72    7.3   $- 

 

 

Stock-Based Compensation Expense

 

The following table presents information related to stock-based compensation expense:

 

   2025   2024   2025   2024   2025   (Years) 
   For the Three Months Ended   For the Nine Months Ended   Unrecognized at   Weighted Average Remaining Amortization 
   September 30,   September 30,   September 30,   Period 
   2025   2024   2025   2024   2025   (Years) 
Research and development  $175,398   $133,333   $1,308,322   $1,314,298           
General and administrative  $224,535   $150,912   $1,569,444   $1,322,643           
Total  $399,932   $284,245   $2,877,766   $2,636,941   $1,878,612   1.76 

 

The following table presents stock-based compensation by award type:

 

   2025   2024   2025   2024 
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2025   2024   2025   2024 
Options  $399,932   $284,245   $2,877,766   $1,651,903 
RSUs   -    -    -    985,038 
Total  $399,932   $284,245   $2,877,766   $2,636,941 

 

ATM Sales

 

During the three months ended September 30, 2025, there were no sales of common stock under the 2024 ATM. During the nine months ended September 30, 2025, the Company sold 965,424 shares of its common stock under the 2024 ATM, generating gross proceeds of $2,011,250. For the nine months ended September 30, 2025, the total commissions and related legal and accounting fees incurred were $72,805, resulting in net proceeds of $1,938,445. During the nine months ended September 30, 2025, the Company reclassified previously capitalized deferred offering costs of $148,697 to additional paid-in capital.

 

Common Stock Repurchase Program

 

On June 16, 2025, the Company’s Board of Directors authorized a common stock repurchase program under which the Company may repurchase up to $2,000,000 of its outstanding common stock through June 16, 2026. No repurchases have been made as of September 30, 2025.

 

Common Stock Issuances

 

During the three months ended September 30, 2025, there were no issuances of common stock by the Company.

 

During the nine months ended September 30, 2025, the Company issued 63,525 shares of common stock to Auctus Fund, LLC in partial satisfaction of shares held in abeyance.

 

During the nine months ended September 30, 2025, the Company issued 29,249 shares of common stock related to the exercise of an option at an exercise price of $1.45 per share, which resulted in gross cash proceeds to the Company of $42,411.