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Share-Based Compensation | 6 Months Ended
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Jun. 30, 2024
Share-Based Compensation [Abstract] |
SHARE-BASED COMPENSATION | 10. SHARE-BASED COMPENSATION The following is a summary of share-based compensation expenses reported in the Consolidated Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023:
|  | For the Three Months Ended June 30, |  |  | For the Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Research and Development |  | $ | 2,627,300 |  |  | $ | 101,250 |  |  | $ | 2,627,300 |  |  | $ | 188,908 |
General and Administrative Expenses |  |  | 125,368 |  |  |  | 177,333 |  |  |  | 250,735 |  |  |  | 623,105 |
Total Share-Based Compensation Expense Included in Operating Expenses |  | $ | 2,752,668 |  |  | $ | 278,583 |  |  | $ | 2,878,035 |  |  | $ | 812,013 |
(a) Share-Based Compensation under 2022 Equity Incentive Plan On November 22, 2022, the Company adopted the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to eligible employees, directors and consultants, to be granted from time to time by the Board of Directors of the Company. The 2022 Plan provides for an automatic increase in the number of shares available for issuance beginning on January 1, 2023 and each January 1 thereafter, by 4% of the number of outstanding shares of common stock on the immediately preceding December 31, or such number of shares as determined by the Board of Directors. As of June 30, 2024, the number of remaining shares available for issuance under the 2022 Plan is equal to 19,384. To date, the Company has granted shares of common stock, restricted stock units, stock options to employees, non-employees, and Directors under the 2022 Plan. During the three and six months ended June 30, 2024 and 2023, the Company did not recognize compensation expense related to equity compensation awards granted under the 2022 Plan. During the three and six months ended June 30, 2024, the Company issued 5,337 and 21,338 shares of common stock, respectively, pursuant to RSUs granted to executives in November 2023, which were fully vested as of December 31, 2023 (none during the three or six months ended June 30, 2023). Awards Not Yet Granted The Company currently has compensation agreements with three executives and a consultant, which provide the individuals the right to an aggregate of 82,501 stock options, in each case the grant of the awards is subject to shareholder approval to increase the number of shares available under the 2022 Plan. 45,000 of these stock options are subject to vesting annually over five years with the first vesting date being December 31, 2024, and have an exercise price that was initially equal to the closing share price on the date of the IPO and later reduced to $12.00 per share, which reduction was also subject to shareholder approval in order to comply with Listing Rule 5635(c) of The Nasdaq Stock Market LLC. In February 2024, the Company executed an executive employment agreement with its Chief Commercial Officer that, subject to and upon receipt of shareholder approval, provides for the grant of stock options to purchase up to 20,834 shares of common stock, with an exercise price to be determined by the Board of Directors, and vesting over a five-year period. In addition, pursuant to the Directors’ agreements described in Note 11, the agreements provide for the issuance of an aggregate of 2,516 stock options to Directors with an exercise price of $63.60 per share, vesting 100% on July 11, 2024. For accounting and disclosure purposes, no fair value has been ascribed to these stock option awards as no grant date (as defined in ASC 718) has been established as of June 30, 2024. On July 16, 2024, at the Company’s 2024 Annual Stockholders’ Meeting, the Company’s stockholders approved the proposal to amend the 2022 Plan to increase the number of shares available for issuance by 416,667 shares. See Note 12 for further details. (b) Share-Based Payments to Vendors for Services During the six months ended June 30, 2024 and 2023, the Company issued 0 and 77,500 fully vested, nonforfeitable common stock shares, respectively, as share-based payments to two nonemployees, Florida State University Research Fund, Inc. and Kentucky Technology Inc, in exchange for research and development services to be rendered to the Company in the future. The Company recognizes prepaid research and development costs on the grant date, as defined in ASC 718. Florida State University Research Fund, Inc. agreed to render research and development services related to development of celgosivir over a period of up to five years using the proceeds from the sale of the Company’s common shares to fund the services. Prepaid research and development costs recognized associated with the Florida State University Research Fund, Inc. are expected to be rendered within one year. Kentucky Technology Inc. agreed to furnish a written report on the potential development of SJ733 + tafenoquine in exchange for fully vested shares of the Company’s common stock. On May 3, 2024, the Company indicated to Kentucky Technology, Inc. that the report (delivered in April 2024) was acceptable to the Company. Upon acceptance, the Company recognized $2,625,000 of share-based compensation expense, which is reflected in Research and Development expense in the results of operations for the three and six months ended June 30, 2024. As of June 30, 2024, the unamortized balance of prepaid assets related to these share-based payments for research and development costs for which the grant date criteria has been met and the services are expected to be rendered within one year is $103,385 ($2,730,685 at December 31, 2023), which is presented as a component of Prepaid and Other Assets on the accompanying Consolidated Condensed Balance Sheets. In addition to share-based payments for research and development services, during the six months ended June 30, 2024 and 2023, 0 and 42,753 common stock shares, respectively, were issued as fully vested, nonforfeitable equity instruments to nonemployees. As of June 30, 2024, the unamortized balance of current prepaid assets related to these share-based payments for which the services are expected to be rendered within one year is $776,471 ($948,581 at December 31, 2023), which is reported in Prepaid and Other Assets on the Consolidated Condensed Balance Sheets. The unamortized balance of noncurrent prepaid assets related to these share-based payments for which the services are expected to be rendered beyond one year is $154,412 ($242,647 at December 31, 2023), reported in Long-Term Prepaid Expense on the Consolidated Condensed Balance Sheets. The agreements with the nonemployees do not include any provisions to claw back the share-based payments in the event of nonperformance by the nonemployees. Subject to applicable federal and state securities laws, the nonemployees can sell the received equity instruments. During the three months ended June 30, 2024 and 2023, the Company recorded $0 and $65,000, respectively, of share-based compensation expense in exchange for services provided by vendors ($0 and $277,605 for the six months ended June 30, 2024 and 2023, respectively). Amortization of capitalized share-based payments to vendors for the three months ended June 30, 2024 and 2023 was $2,752,667 and $213,583, respectively ($2,878,035 and $534,408 for the six months ended June 30, 2024 and 2023, respectively).

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