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Common Stock Warrants

6 Months Ended

Jun. 30, 2025

Note 9 - Common Stock Warrants

In June 2024, as part of a registered offering, the Company issued pre-funded warrants to purchase up to an aggregate of 31,666 shares of common stock (the “pre-funded warrants”), together with Series A Warrants to purchase up to an aggregate of 178,255 shares of common stock and Series B Warrants (together with the Series A Warrants, the “Series Warrants”) to purchase up to an aggregate of 178,255 shares of common stock.

Additionally, the Series B Warrants contain an alternative cashless exercise option whereby the holder of a Series B Warrant has the right to receive an aggregate number of shares equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cashless exercise of the Series B Warrant using $1.75 (after adjustment) as the exercise price for that purpose and (y) 3.0.

In connection with the Offering, the Company also issued placement agent warrants (“Placement Agent Warrants” and, together with the pre-funded warrants and the Series Warrants, the “Warrants”) to purchase up to 1,758 shares of common stock. The purchase price of each share of common stock and accompanying Series Warrants was $227.50 and the purchase price of each pre-funded warrant and accompanying Series Warrants was $227.325.

Warrant Exercises

On May 2, 2023, the Company conducted a registered offering in which the Company issued 1,232 warrants to purchase shares of common stock for an exercise price per share equal to $2,450. The warrants expire May 2, 2028. In December 2023, the Board approved a temporary reduction of the exercise price per share from $2,450 to $1,225. The Company also issued to the underwriter and its designees warrants exercisable for an aggregate of 172 shares of common stock for an exercise price per share equal to $2,625. The warrants expire November 2, 2026. During the six months ended June 30, 2025, no warrants were exercised.

The following table summarizes all warrant activity of the Company for the six months ended June 30, 2025:

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Contractual
	Warrants		Price		Term (Years)
Balance outstanding at December 31, 2024		180,707	$	85.38		4.58
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Balance outstanding at June 30, 2025		180,707	$	85.38		4.09
Exercisable at June 30, 2025		180,707	$	85.38		4.09

Common Stock Warrants

As described above in this Note 9, the Company issued 178,255 Series A Warrants and 178,255 Series B Warrants. In 2024, most of the Series B warrants were exercised. The Company accounts for these warrants, in the aggregate, in accordance with the guidance in ASC 815 “Derivative and Hedging” whereby under that provision the warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classified the warrant instruments as a liability at fair value and adjusts the instruments to fair value each period. This liability will be re-measured at each balance sheet date until the warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. During the three and six months ended June 30, 2025, the Company recognized a gain for the change in fair value of warrant liability of $62,112 and $470,674, respectively, in the statement of operations. As of June 30, 2025, the Company recognized $328,610 of warrant liability.

Recurring Fair Value Measurements

The Company’s warrant liability for the Series A and Series B Warrants is based on the Black-Scholes option pricing model utilizing management judgement and pricing inputs from observable and unobservable markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the warrant liability is classified within Level 2 of the fair value hierarchy because the Company uses observable inputs like market prices for its common stock and risk-free interest rate, but requires estimations for factors like the Company’s own volatility, which is not directly quoted in active markets.

Measurement

The Company established the initial fair value for the warrant liability on August 20, 2024, the date the warrants were initially exercisable. Upon exercise, the instrument is marked to its fair value upon exercise, and the shares delivered are recorded at fair value in the Company’s statement of stockholders’ equity. The warrant liability was valued based on the following inputs for the Series A and Series B Warrants, respectively:

Input		June 30, 2025		December 31, 2024
Exercise Price	$75.95			$28.70 and $1.75
Stock Price	$3.51		$7.26
Volatility		140% and 191%		131% and 167%
Discount Rate		3.72% and 3.74%	4.36%
Expected Dividend	-		-
Expected Life (Years)		4.14 and 1.64	4.64