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STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 5 - STOCKHOLDERS’ EQUITY

 

Common Stock

 

During the nine months ended September 30, 2024, the Company issued 361,490 shares of common stock for cash.

 

During the nine months ended September 30, 2023, the Company issued 9,644 shares of common stock for rounding of shares related to the Reverse Split.

 

Stock-Based Compensation

 

The Company adopted an Employee, Director and Consultant Stock Plan on June 17, 2016 (the “2016 Plan”). Pursuant to the 2016 Plan, the Company’s Compensation Committee may grant awards to any employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary. Due to an annual “evergreen” provision in the 2016 Plan, the number of shares reserved for future grants was increased by 196,857, 186,594 and 184,260 in 2024, 2023 and 2022, respectively. As a result of these increases, as of September 30, 2024 and December 31, 2023, the aggregate number of shares of common stock available for awards under the 2016 Plan was 873,763 shares and 1,279,181 shares, respectively. Options issued under the 2016 Plan are exercisable for up to ten years from the date of issuance.

 

There were 1,959,741 options outstanding as of September 30, 2024. During the three and nine months ended September 30, 2024, the Company issued 0 options and 742,150 options, respectively. During the three and nine months ended September 30, 2023, the Company issued no options.

 

There were 1,357,466 options outstanding as of December 31, 2023.

 

The fair value of each stock option granted during the nine months ended September 30, 2024 was estimated using the Black-Scholes assumptions and or factors as follows:

 

Exercise price  $0.84-$5.00 
Expected dividend yield   0%
Risk free interest rate   4.01%-4.25%
Expected life in years   10 
Expected volatility   213-215%

 

The following is an analysis of the stock option grant activity under the Plan:

 

   Number  

Weighted Average

Exercise Price

  

Weighted Average

Remaining Life

 
Stock Options               
Outstanding December 31, 2023   1,357,466   $7.39    4.39 
Granted   742,150    1.73    9.48 
Expired   (146,125)   5.85    - 
Exercised   -    -    - 
Outstanding September 30, 2024   1,953,491   $5.36    6.02 

 

 

A summary of the status of the Company’s nonvested options as of September 30, 2024, and changes during the nine months ended September 30, 2024 is presented below:

 

Nonvested Options  Options  

Weighted-Average

Exercise Price

 
Nonvested at December 31, 2023   49,832   $14.72 
Granted   742,150    1.73 
Vested   (164,412)   4.43 
Forfeited   -    - 
Nonvested at September 30, 2024   627,570   $2.06 

 

As of September 30, 2024, the Company had 1,953,491 shares issuable under options outstanding at a weighted average exercise price of $5.36 and an intrinsic value of $0.

 

The Company recognized compensation expense related to options issued of $250,403 and $166,707 for the three months ended September 30, 2024 and 2023, respectively, in which $124,570 and $51,526 is included in general and administrative expenses and $125,833 and $115,181 in research and development expenses, respectively. For the three months ended September 30, 2024 and 2023, $61,765 and $1,713 of the stock compensation was related to employees and $188,638 and $164,994 was related to non-employees, respectively.

 

The Company recognized compensation expense related to options issued of $677,703 and $500,121 for the nine months ended September 30, 2024 and 2023, respectively, in which $308,025 and $154,578 is included in general and administrative expenses and $369,678 and $345,543 in research and development expenses, respectively. For the nine months ended September 30, 2024 and 2023, $124,359 and $5,140 of the stock compensation was related to employees and $553,344 and $494,981 was related to non-employees, respectively.

 

As of September 30, 2024, the unamortized stock option expense was $1,261,950 with $595,816 being related to employees and $666,134 being related to non-employees. As of September 30, 2024, the weighted average remaining vesting period for the unamortized stock compensation to be recognized is 2.86 years.

 

On January 8, 2024, the Company issued 20,750 options to purchase the Company’s common stock to consultants and employees. These options have an exercise price of $0.84 and expire in 10 years from issuance. These options vest over 48 months.

 

On February 12, 2024, the Company entered into a consulting agreement. As part of this agreement the Company agrees to pay $5,000 per month and issue 4,400 options to purchase the Company’s common stock. These options have an exercise price of $5.00 and expire in 10 years from issuance. These options vest over three months.

 

On March 25, 2024, the Company issued 717,000 options to purchase the Company’s common stock to officers, board of directors and consultants. These options have an exercise price of $1.74 and expire in 10 years from issuance. These options vest between 24 and 48 months with 160,000 options to vest upon achievement of certain performance conditions.

 

Warrants:

 

A summary of warrant issuances are as follows:

 

   Number  

Weighted Average

Exercise Price

  

Weighted Average

Remaining Life

 
Warrants               
                
Outstanding December 31, 2023   942,566   $19.47    2.31 
Granted   -    -    - 
Expired   -    -    - 
Exercised   -    -    - 
Outstanding September 30, 2024   942,566   $19.47    1.56 

 

 

As of September 30, 2024, the Company had 942,566 shares issuable under warrants outstanding at a weighted average exercise price of $19.47 and an intrinsic value of $0.

 

The Company recognized compensation expense related to warrants issued of $0 and $0 during the three ended September 30, 2024 and 2023, respectively. The Company recognized compensation expense related to warrants issued of $0 and $0 during the nine ended September 30, 2024 and 2023, respectively.