STOCKHOLDERS EQUITY

12 Months Ended

Dec. 31, 2023

STOCKHOLDERS EQUITY

STOCKHOLDERS' EQUITY

NOTE 7 – STOCKHOLDERS’ EQUITY

May 2022 Private Offering

On May 3, 2022, the Company completed the sale of (i) 299,167 shares of common stock, and pre-funded warrants to purchase 456,389 shares of common stock (the “Pre-Funded Warrants”), and (ii) accompanying warrants to purchase 1,511,112 shares of common stock (the “Common Warrants”), at a combined offering price of $22.50 per share of common stock/Pre-Funded Warrant and related Common Warrant, to a group of institutional investors (the “Purchasers”), pursuant to a Securities Purchase Agreement between the Company and the Purchasers dated as of April 28, 2022 (the “Purchase Agreement”), resulting in gross proceeds to the Company of approximately $17,000,000. The transaction was effected pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) promulgated thereunder.

The Common Warrants have a five-year term, and an exercise price of $20.00 per share. The Pre-Funded Warrants did not have an expiration date and had an exercise price of $0.0001 per share. As of December 31, 2023, all of the Pre-Funded Warrants had been exercised. 

The Pre-Funded Warrants were classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted the holders to receive a fixed number of shares of common stock upon exercise. In addition, the Pre-Funded Warrants did not provide any guarantee of value or return.

Roth Capital Partners (“Roth”) acted as sole placement agent for the offering. The Company paid Roth a placement agent fee in the amount of $1,360,000 and issued Roth a warrant to purchase 113,334 shares of Common Stock with the same terms as the Common Warrants issued to the Purchasers.

Share Repurchase Program

On June 12, 2023 the Company announced that its Board of Directors has approved a share repurchase program. The program authorizes the Company to repurchase up to $2 million of its shares of common stock, in the open market or through privately negotiated transactions, in accordance with applicable securities laws and other restrictions. The manner, timing and amount of any purchase will be based on an evaluation of market conditions, the Company's stock price and other factors. The program has no termination date, may be suspended or discontinued at any time, and does not obligate the Company to acquire any particular number of shares of common stock. As-of December 31, 2023, 57,500 shares had been repurchased under this program for a total purchase price of $270,952.

Warrants

In connection with our May 2022 private offering, we issued pre-funded warrants to purchase 456,389 shares of common stock and accompanying warrants to purchase 1,624,446 shares of common stock at a price of $20.00 per share.

Assumptions used in calculating the fair value of the warrants issued in 2022 were as follows:

	Range of Inputs  Used
Annual dividend yield	$	-
Expected life (years)		5.0
Risk-free interest rate		0.81	%
Expected volatility		92.95	%
Common stock price	$	18.30

As of December 31, 2023, and 2022, warrants to purchase 2,284,932 shares of common stock were outstanding.

Warrant activity for the years ended December 31, 2023 and 2022 consists of the following:

	Warrants			Weighted Average Exercise Price		Weighted Average Life Remaining
Outstanding, December 31, 2021		660,486		$	42.70		4.85
Issued		2,080,835
Exercises		(456,389	)
Anti-Dilution Modifications		-
Forfeiture/Cancellations		-
Outstanding, December 31, 2022		2,284,932		$	26.59		4.22
Issued		-
Exercises		-
Anti-Dilution Modifications		-
Forfeiture/Cancellations		-
Outstanding, December 31, 2023		2,284,932		$	26.59		3.22

See Note 2 for discussion related to the issuance of common stock in connection with licensing agreements.