Stockholder Equity

3 Months Ended

Mar. 31, 2024

Stockholder Equity

Stockholder' Equity

Note 7 – Stockholder’ Equity

The Company is authorized to issue 50,000,000 preferred stock shares and 200,000,000 common stock shares both with a par value of $0.0001.

Preferred Stock

On October 30, 2020, the Company designated 1,000,000 shares as Series D Convertible Preferred Stock with a par value of $0.0001.

As of March 31, 2024, there were no shares of Preferred Stock issued and outstanding.

Common Stock

The holders of common stock are entitled to one vote per share on all matters submitted to a vote of shareholders, including the directors’ election. There is no right to cumulative voting in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available for payment of dividends subject to the prior rights of holders of preferred stock and any contractual restrictions the Company has against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and have no right to convert their common stock into any other securities. As of March 31, 2024, there were 132,670,446 shares of common stock issued and outstanding.

In December 2022, the Company entered into an equity distribution agreement with an underwriter pursuant to which the Company may offer and sell shares of its common stock from time to time through the underwriter as its sales agent. Sales of common stock, if any, will be made at market prices by any method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The Company has no obligation to sell any shares of common stock under the equity distribution agreement, and may at any time suspend offers under the equity distribution agreement, in whole or in part, or terminate the equity distribution agreement.

During the three months ended March 31, 2024, we issued 3,339 fully vested shares of common stock to a service provider with a fair value of $4,500 based on the market price of our common stock on date of grant.

During the three months ended March 31, 2023, a total of 2,137,876 shares of common stock were sold pursuant to the open market sale agreement resulting in a total of $8.35 million in proceeds, net of $0.11 million of commission fees and $0.05 million of accounting and legal fees. No such common stock sales occurred during the three months ended March 31, 2024.

As of March 31, 2024, a total of 3,766,422 shares of common stock have been sold pursuant to the open market sale agreement and approximately 86,560,000 remained available under the Company’s at-the-market public facility, subject to various limitations.

Stock-based compensation

During the three months ended March 31, 2024, and 2023, the Company recorded stock-based compensation of $183,200 and $214,924, respectively, related to common stock issued or vested options to employees and various consultants of the Company. For the three months ended March 31, 2024, $138,586 was charged as general and administrative expenses and $44,614 as research and development expenses in the accompanying unaudited condensed consolidated statements of operations.  For the three months ended March 31, 2023, $189,283 was charged as general and administrative expenses and $25,641 as research and development expenses in the accompanying unaudited condensed consolidated statements of operations.

Stock Options

Stock option activity for the three months ended March 31, 2024 is summarized as follows:

	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (Years)
Options outstanding at December 31, 2023		10,828,174	*	$	0.83	$	6,374,433		4.66
Granted		50,000		$	1.40		—		—
Exercised		—			—		—		—
Expired/forfeit		(137,924	)	$	2.65		—		—
Options outstanding at March 31, 2024		10,740,250	*	$	0.81	$	4,826,248		4.35
Options Exercisable at March 31, 2024		8,696,519	*	$	0.50	$	6,609,354		1.74

*Includes 6,700,000 options granted in connection with the Merger (see Note 1) and were not granted under the 2021 Plan.

As of March 31, 2024, intrinsic value is computed based on the difference between weighted average exercise price and the market price of our common stock as of March 31, 2024 of $1.26 per share multiplied by the total common stock options outstanding and exercisable.

Total unrecognized compensation associated with these unvested options is approximately $1,696,066 which will be recognized over a period of 2.82 years.

The fair value of these options granted were estimated on the date of grant, using the Black-Scholes option-pricing model with the following assumptions:

	March 31, 2024
Dividend yield		0.00%
Expected life	6.25 Years
Expected volatility	26.36–26.38%
Risk-free interest rate	4.09–4.31%

Stock Warrants

As of March 31, 2024, there were 1,235,000 warrants outstanding which relate to the Series 1 offering executed in December 2021, where investors were offered a warrant for every two common shares purchased during the offering at an exercise price of $2.50 per share.

During the three months ended March 31, 2024 and 2023, no warrants were issued or exercised. 

A summary of warrant activity during the three months ended March 31, 2024, is as follows:

	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Life (Years)
Balance at December 31, 2023		1,235,000		2.50	$	—		0.96
Issued		—		—		—		—
Exercised		—		—		—		—
Balance at March 31, 2024		1,235,000		2.50	$	—		0.71