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CAPITALIZATION

12 Months Ended

Dec. 31, 2024

NOTE 6: CAPITALIZATION

As of December 31, 2024 and December 31, 2023, the Company had 200,000,000 shares of common stock authorized and 12,013,901 and 8,401,047 shares issued and outstanding, respectively. As of December 31, 2024 and December 31, 2023, the Company had 5,000,000 shares of preferred stock authorized. There were no shares of preferred stock issued or outstanding as of December 31, 2024 and 2023. As of December 31, 2024 and December 31, 2023, there were warrants outstanding to purchase an aggregate of 6,675,853 and 3,090,787 shares of common stock, respectively. As of December 31, 2024, these warrants are exercisable at a weighted average price of $6.52 and their weighted average remaining contractual term is 3.5 years.

On June 1, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) which was amended on September 1, 2022 with a sales agent, pursuant to which the Company may offer and sell, from time to time through the sales agent, shares of the Company’s common stock, par value $0.01 per share. The issuance and sale of common stock by the Company under the ATM Agreement is being made pursuant to the Company’s effective “shelf” registration statement on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022. In 2024, the Company sold 152,000 shares of the Company’s common stock for aggregate gross proceeds of approximately $0.4 million. The Company’s ability to issue shares under the shelf registration statement on Form S-3 is limited by General Instruction I.B.6 to Form S-3. On August 6, 2024, the Company filed a prospectus supplement to reduce the amount of shares registered under the prospectus for the ATM to $0.00 and to suspend the ATM program, but the ATM Agreement remains in full force and effect.

	c.	On August 8, 2024, the Company completed a registered direct offering, pursuant to which the Company sold and issued to certain investors, including an officer of the Company, 1,643,837 shares of the Company’s common stock at a purchase price per share of $1.825. In addition, in a concurrent private placement, the Company also issued to the purchasers in the August 2024 Offering unregistered warrants to purchase 1,643,837 shares of the Company’s common stock (the “August 2024 Warrants”). The August 2024 Warrants are immediately exercisable at an exercise price of $1.70 per share and expire five years from the date of issuance. The total net proceeds were approximately $2.5 million, after deducting placement agent and other offering expenses in the amount of approximately $0.5 million. In September 2024, the Company filed a registration statement to register the resale by the investors of the shares of common stock issuable upon exercise of the August 2024 Warrants. The registration statement was declared effective on September 20, 2024.
	d.	On November 22, 2024, the Company completed a registered direct offering, pursuant to which the Company sold and issued to certain investors, including an officer of the Company, 1,817,017 shares of the Company’s common stock at a purchase price per share of $1.175. In addition, in a concurrent private placement, the Company also issued to the purchasers in the November 2024 Offering unregistered warrants to purchase 1,817,017 shares of the Company’s common stock (the “November 2024 Warrants”). The November 2024 Warrants are immediately exercisable at an exercise price of $1.05 per share and expire five years from the date of issuance. The total net proceeds were approximately $1.8 million, after deducting placement agent and other offering expenses in the amount of approximately $0.35 million. In December 2024, the Company filed a registration statement to register the resale by the investors of the shares of common stock issuable upon exercise of the November 2024 Warrants. The registration statement was declared effective on December 31, 2024. In addition, in connection with the November 2024 Offering, the Company issued to the placement agent and its designees warrants to purchase an aggregate of 124,212 shares of common stock at an exercise price of $1.3125. The placement agent warrants are exercisable six months from the date of issuance and expire on the fifth anniversary of the issue date. The fair value of a warrant to purchase one share of common stock that was issued to the placement agent was $0.93.

	e.	On January 16, 2025, the Company completed a private placement offering pursuant to which the Company sold and issued to certain investors an aggregate of 2,109,383 shares of common stock and warrants to purchase 2,109,383 shares of common stock (the “January 2025 Warrants”). The shares and January 2025 Warrants were sold on a combined basis for consideration of $1.065 for one share and one January 2025 Warrant. The January 2025 Warrants are immediately exercisable at an exercise price of $0.94 per share and expire five years from the date of issuance. The total net proceeds were approximately $2.0 million, after deducting placement agent and other offering expenses in the amount of approximately $0.25 million. In February 2025, the Company filed a registration statement to register the resale by the investors of the shares of common stock and shares of common stock issuable upon exercise of the January 2025 Warrants. The registration statement was declared effective on February 11, 2025. In addition, in connection with the January 2025 Offering, the Company issued to the placement agent and its designees warrants to purchase an aggregate of 147,656 shares of common stock at an exercise price of $1.175. The placement agent warrants are exercisable six months from the date of issuance and expire on the fifth anniversary of the issue date. The fair value of a warrant to purchase one share of common stock that was issued to the placement agent was $0.74.

On February 12, 2025, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited company (“Yorkville”), which provides that, upon the terms and subject to the restrictions and satisfaction of the conditions in the SEPA, Yorkville is committed to purchase up to an aggregate of $20.0 million of the Company’s shares of common stock over a 36-month period. At the Company’s option, the shares of common stock would be purchased by Yorkville from time to time at a price equal to 97% of the lowest of the three daily VWAPs during a three consecutive trading day period commencing on the date that the Company, subject to certain limitations, delivers a notice to Yorkville that the Company is committing Yorkville to purchase such shares of common stock. The Company may also specify a certain minimum acceptable price per share in each advance. The Company will control the timing and amount of sales of the Company’s shares to Yorkville. As consideration for Yorkville’s irrevocable commitment to purchase shares of the Company’s common stock upon the terms of and subject to restrictions and satisfaction of the conditions set forth in the SEPA, upon execution of the SEPA, the Company issued to Yorkville 305,960 shares of common stock, as commitment shares. Under the applicable Nasdaq Rules and pursuant to the SEPA, in no event may the Company issue or sell to Yorkville more than 2,823,244 shares of common stock (the “Exchange Cap”), which is 19.99% of the shares of common stock outstanding immediately prior to the execution of the SEPA, unless (i) the Company obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap, or (ii) the average price of all applicable sales of common stock under the SEPA equals or exceeds $0.81722 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) on the trading day immediately preceding the effective date or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the effective date). On February 12, 2025, the Company filed a Form S-1 covering the resale of up to 10,000,000 shares of common stock comprised of (i) 305,960 commitment shares, and (ii) up to 9,694,040 shares of common stock reserved for issuance and sale to Yorkville under the SEPA. The Form S-1 was declared effective on February 13, 2025.