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Stockholders’ Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders’ Equity

8. Stockholders’ Equity

 

On May 17, 2023, the Company effected a 7.1-for-1 forward stock split (the “Forward Stock Split”) of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The par value of the common stock was adjusted as a result of the Forward Stock Split from $0.01 to $0.0001 and the authorized shares were increased to 100,000,000 shares of common stock in connection with the Forward Stock Split. Fractional shares resulting from the Forward Stock Split were rounded down to the next whole share and in lieu of any fractional shares the Company will pay a cash amount to the holder of such fractional shares. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.

 

Common Stock

 

At December 31, 2023 and 2022, per the Company’s amended and restated Certificate of Incorporation, the Company was authorized to issue 100,000,000 shares of $0.0001 par value common stock.

 

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders and the holders of the Common Stock are entitled to elect one director of the Corporation.

 

The Company currently has 1,611,991 shares of common stock reserved for future issuance for the potential exercise of stock options and warrants outstanding at December 31, 2023.

 

 

AZITRA, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

For the Years Ended December 31, 2023 and 2022

 

8. Stockholders’ Equity (continued)

 

Preferred Stock

 

At December 31, 2023 and 2022, per the Company’s amended and restated Certificate of Incorporation, the Company has authorized 1,437,150 shares of $0.0001 par value preferred stock.

 

In January 2023, the Company issued 23,432 shares of its Series B Preferred Stock related to conversion of the 2021 Convertible Note at a conversion price of $48.00 per share (see Note 7).

 

The Series A, Series A-1, and Series B Preferred Stock had the following rights, preferences and privileges :

 

Conversion

 

The preferred stock was converted, at the option of the holder, into common shares based upon a predefined formula. The holders of preferred stock converted such shares into common shares upon the Company’s IPO. For purpose of conversion, the initial conversion price was $16.25 per share (original issue price) for Series A Preferred Stock, $37.50 per share (original issue price) for Series A-1 Preferred Stock, and $43.45 per share (original issue price) for Series B Preferred Stock, and was subject to adjustment as described in the Certificate of Incorporation.

 

Upon the Company’s IPO in June 2023, all of the outstanding preferred stock converted to common stock, resulting in the issuance of 1,458,233, 2,964,849, and 3,284,553 shares of common stock in exchange for outstanding Series A, Series A-1, and Series B Preferred Stock, respectively. There was no gain or loss upon conversion.

 

Voting Rights

 

The holders of the Series A, Series A-1, and Series B Preferred Stock were entitled to vote on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of preferred stock was entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of preferred stock held by such holder converted as of the record date for determining stockholders entitled to vote on such matter. The holders of the Series A and Series A-1 Preferred Stock were each entitled to elect one director of the Corporation. The holders of the Series B Stock were entitled to elect two members of the Board. Each class of preferred stock could have removed such directors from office and to fill any vacancy caused by the resignation, death or removal of such directors under certain circumstances as described in the Certificate of Incorporation.

 

Dividends

 

The holders of Series A Preferred Stock were entitled to receive dividends at a rate of 8% per annum of the Series A original issue price of $16.25 per share on each outstanding share of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock). Dividends accumulated from the original date of issuance of the Series A Preferred Stock, were cumulative and were payable upon declaration of the Board of Directors or liquidation of the Company. At December 31, 2023, there were no cumulative dividends on Series A Preferred Stock as there was no longer any Series A Preferred Stock outstanding.

 

The holders of Series A-1 Stock were entitled to receive dividends at a rate of 8% per annum of the Series A-1 original issue price of $37.50 per share on each outstanding share of Series A-1 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A-1 Preferred Stock). Dividends were cumulative and were payable upon declaration of the Board of Directors or liquidation of the Company. At December 31, 2023, there were no cumulative dividends on Series A-1 Preferred Stock as there was no longer any Series A-1 Preferred Stock outstanding.

 

 

AZITRA, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

For the Years Ended December 31, 2023 and 2022

 

8. Stockholders’ Equity (continued)

 

The holders of Series B Stock were entitled to receive dividends at a rate of 8% per annum of the Series B original issue price of $43.45 per share on each outstanding share of Series B (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred Stock). Dividends were cumulative and were payable upon declaration of the Board of Directors or liquidation of the Company. At December 31, 2023, there were no cumulative dividends on Series B Preferred Stock as there was no longer any Series B Preferred Stock outstanding.

 

Liquidation

 

In the event of any liquidation, dissolution or winding up of the Company, the holders of the preferred stock were entitled to receive, prior to and in preference to the holders of the common shares, an amount equal to the Series A, Series A-1, or Series B Preferred Stock original issue price, plus declared and/or accrued but unpaid dividends. In the event of any such liquidation event, after the payment of all preferential amounts required to be paid to the holders of shares of preferred stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of preferred stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted into Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such liquidation event.