SHAREHOLDERS’ EQUITY

3 Months Ended

Mar. 31, 2025

Equity [Abstract]

SHAREHOLDERS’ EQUITY

NOTE 4 – SHAREHOLDERS’ EQUITY

Common Stock

Authorized Shares

The Company’s Certificate of Incorporation, as filed with the State of Delaware on May 10, 2023, following the Company’s conversion from a California corporation into a Delaware corporation, authorizes the Company to issue up to 120,000,000 shares, consisting of 100,000,000 shares of common stock, par value of $0.001 per share, and 20,000,000 shares of preferred stock, par value $0.001 per share. Holders of shares of common stock have full voting rights, one vote for each share held of record. Shareholders are entitled to receive dividends as may be declared by the board of directors out of funds legally available and share pro rata in any distributions with shareholders upon liquidation. Shareholders have no conversion, pre-emptive or subscription rights. All outstanding shares of common stock are fully paid and non-assessable. As of March 31, 2025 and December 31, 2024 there were 15,825,118 and 13,736,597 shares of common stock issued and outstanding, respectively, and no shares of preferred stock outstanding, respectively.

Common Stock Issued for Cash Upon Closing of the Company’s Private Financing

On January 14, 2025, the Company entered into a securities purchase agreement (“SPA”) and registration rights agreement with an investor for the sale and issuance of 2,500,000 units (the “Pre-Funded Units”), with each Pre-Funded Unit consisting of a pre-funded warrant to purchase one share of common stock, exercisable for $0.001 per share, and a common warrant to purchase one and one half shares of common stock (an aggregate of 3,750,000), exercisable at $1.399 per share. On January 16, 2025, the Company closed on the sale of the Pre-Funded Units for a total purchase price of $3,500 (or $1.40 per Pre-Funded Unit). Net proceeds received by the Company relating to the financing, and subsequent exercise of prefunded warrants was $3,058.

The pre-funded warrants have an exercise price of $0.001 per share and are immediately exercisable and will expire when exercised in full. The common warrants have an exercise price of $1.40 per share, will be exercisable six months from issuance and will expire five and a half years from the issuance date.

During the three months ended March 31, 2025, the investor exercised 2,010,000 shares of the pre-funded warrants and as of March 31, 2025, there were 490,000 pre-funded shares remaining unexercised.

Adoption of the 2023 Equity Incentive Plan

In July 2023, the Company’s board of directors and stockholders adopted the 2023 Equity Incentive Plan (the “2023 Plan”). Under the 2023 Plan, the Company may grant incentive stock options to employees, including employees of any parent or subsidiary, and nonstatutory stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards and other forms of stock compensation to employees, directors and consultants, including employees and consultants of the Company’s affiliates. As approved, a total of 1,650,000 shares of common stock were initially reserved for issuance under the 2023 Plan. As of March 31, 2025 and December 31, 2024, a total of 1,457,880 shares remained available for issuance under the 2023 Plan.

Grant of Restricted Stock Units (RSUs)

The following table summarizes restricted common stock activity during the three months ended March 31, 2025:

	Number of Restricted Shares			Fair Value			Weighted Average Grant Date Fair Value
Unvested, December 31, 2024		172,000		$	314		$	1.83
Granted		20,120			50			2.49
Vested		(78,521	)		(76	)		0.97
Forfeited		—			—			—
Unvested, March 31, 2025		113,599		$	288		$	2.54

On September 23, 2024, the Company entered into a strategic advisory agreement with Belair Capital Advisors Inc. (“Belair”). During the one-year term of the agreement, in exchange for its services, the Company issued Belair 50,000 RSUs, which vest six months from the date of issuance. The fair value of the shares on the date of grant was $100, which value will be amortized over the one-year service period of the agreement. None of these shares vested or were issued during the year ended December 31, 2024. During the three months ended March 31, 2025, the 50,000 RSUs vested and the shares were issued to Belair.

Upon the closing of the Company’s IPO, the Company entered into agreements with each of its four officers. Such agreements provided for annual grants of RSUs in accordance with the terms of the Company’s 2023 Equity Incentive Plan. The RSUs vest over one- or two-year periods and are subject to full acceleration of vesting upon the sale of the Company. Upon the closing of the Company’s IPO in September 2024, the Company granted the officers 92,000 RSUs. The fair value of the shares on the date of grant was $226. None of these RSUs vested during the year ended December 31, 2024. During the three months ended March 31, 2025, a total of 28,521 RSUs vested and the shares were issued to the officers.

Upon the closing of the Company’s IPO, the Company entered into agreements with each of its three independent directors. The Company’s policy provides that, upon initial election or appointment to its board of directors, each new non-employee director will be granted a one-time grant, or Director Initial Grant, with a value of $50 of RSUs that will vest in substantially equal annual installments over a period of three years. The Director Initial Grant is subject to full acceleration vesting upon the sale of the Company, in accordance with the terms of the Company’s 2023 Plan. In 2024, a total of 30,000 RSUs were granted to the directors. The fair value of the shares on the date of grant was $74. During the three months ended March 31, 2025, an additional 20,120 RSUs was granted to the Company’s new director with a fair value of $31. None of these RSUs had vested as of the three months ended March 31, 2025 or the year ended December 31, 2024.

During the three months ended March 31, 2025, the Company recorded $76 of stock compensation-related expense for the fair value vesting of restricted common stock. As of March 31, 2025, $280 of unamortized compensation remained.

Stock Warrants

The table below summarizes the Company’s warrant activities for three months ended March 31, 2025:

	Number of Warrant Shares			Exercise Price Range Per Share		Weighted Average Exercise Price
Balance, December 31, 2024		278,188		$	2.40 - 4.80	$	4.29
Granted		6,425,000			0.001 – 1.40		0.86
Cancelled		—			—		—
Exercised		(2,010,000	)		0.001		0.001
Forfeited/Expired		(150,000	)		4.17		4.17
Balance, March 31, 2025		4,543,188		$	0.001 – 4.80	$	1.33
Vested and exercisable, March 31, 2025		793,188		$	0.001 – 4.80	$	1.03

The following table summarizes information concerning outstanding and exercisable warrants as of March 31, 2025:

		Warrants Outstanding				Warrants Exercisable
	Range of Exercise Prices	Number Outstanding	Average Remaining Contractual Life (in years)		Weighted Average Exercise Price	Number Exercisable	Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
$	0.001	490,000	-	$	0.001	490,000	-	$	0.001
	1.40 - 2.40	3,944,688	4.74		1.40	194,688	4.51		1.50
	4.80	108,500	4.50		4.80	108,500	4.50		4.17
$	0.001– 4.80	4,543,188	4.22	$	1.33	793,188	1.72	$	1.03

Warrant Grants

On January 14, 2025, as amended on January 16, 2025, the Company entered into a securities purchase agreement (“SPA”) and registration rights agreement with a select investor. In connection with the agreement, on January 16, 2025, the Company issued the investor a pre-funded warrant to purchase up to 2,500,000 shares of the Company’s common stock at an exercise price of $0.001 per share. The warrant is immediately exercisable and will expire when exercised in full. The investor also received a warrant to purchase up to 3,750,000 shares of the Company’s common stock at an exercise price of $1.40 per share. The warrant will be exercisable six months from the date of issuance and will expire five years from the issuance date.

On January 16, 2025, the Company issued a warrant to purchase common stock to the underwriters of the SPA for the purchase of 175,000 shares of the Company’s common stock at an exercise price of $1.40 per share. The warrant vested upon grant. The warrant was issued to the underwriters as they were the placement agents for the SPA noted above. The warrant expires five years from the date of grant.

Warrant Exercises

During the three months ended March 31, 2025, the SPA investor exercised 2,010,000 shares of the pre-funded warrant, and as of March 31, 2025, there 490,000 shares remained unexercised.

The intrinsic value for warrant shares outstanding as of March 31, 2025 was $458.

Common Stock to be Issued

The Company has entered into agreements with certain vendors as describes in Note 3 that require the issuance of additional shares of common stock based upon a defined true calculation.   As of March 31, 2025, the vendors became due an aggregate of 551,100 shares of common stock with an aggregate fair value of $484. The shares were issued in April 2025 and have been reflected as common stock issuable as of March 31, 2025.  See further discussion at Note 5.