Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Stockholders' Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

On June 26, 2023, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation to effect a one-for-eight (1-for-8) reverse split (the “Reverse Split”) of the shares of the Company’s common stock. The Reverse Split became effective on July 7, 2023 (see Note 11 “Subsequent Event”). As a result of the Reverse Split, every eight shares of the Company’s issued and outstanding common stock automatically converted into one share of common stock, without any change in the par value per share, and began trading on a post-split basis under the Company’s existing trading symbol, “AUID”, when the market opened on July 10, 2023. The Reverse Split affected all holders of common stock uniformly and did not affect any common stockholder’s percentage ownership interest in the Company, except for de minimis changes as a result of the elimination of fractional shares. A total of 62,816,330 shares of common stock were issued and outstanding immediately prior to the Reverse Split, and 7,874,962 shares of common stock were issued and outstanding immediately after the Reverse Split. No fractional shares will be outstanding following the Reverse Split. Any holder who would have received a fractional share of common stock received an additional fraction of a share of common stock to round up their holding to the next whole share. In addition, effective as of the Reverse Split, proportionate adjustments were made to all then-outstanding options and warrants with respect to the number of shares of common stock subject to such options or warrants and the exercise prices thereof, as well as to the conversion price under the remaining Convertible Notes. The impact of this change in capital structure has been retroactively applied to all periods presented herein.

Common Stock

During the nine months ended September 30, 2023, shares of common stock were issued as a result of the following transactions:

● On May 26, 2023, pursuant to Securities Purchase Agreements, the Company issued 1,989,676 shares of common stock for cash gross proceeds of approximately $7.3 million (or approximately $6.4 million, net of offering costs).

● On May 26, 2023, pursuant to a Securities Purchase Agreement, Mr. Garchik capitalized the outstanding principal balance of $900,000 under the Initial Promissory Note, into 245,634 shares of common stock, respectively.

● On May 26, 2023, pursuant to an exchange agreement with Holders of Convertible Notes payable, the Company issued 2,348,347 shares of common stock in exchange for Convertible Notes in the gross principal amount of approximately $8.9 million (approximately $7.9 million, net of debt issuance costs and discount). In addition, the Company recorded approximately $7.5 million of expense on conversion of convertible notes.

● The Company issued 111,516 shares of common stock for approximately $388,000 of interest accrued under the Convertible Notes and Credit Facility. See Note 6 “Convertible Notes Payable”.

Warrants

● On May 12, 2023, in connection with certain recruitment services, the Company issued 187,500 common stock warrants to Madison III, LLC with a term of 5 years and an exercise price of $3.164 per share.

● On May 26, 2023, in connection with their placement agent services, the Company issued 156,712 common stock warrants to Madison Global Partners, LLC, with a term of 5 years and an exercise price of $3.664 per share.

The following is a summary of the Company’s warrant activity for the nine months ended September 30, 2023 (unaudited):

				Weighted		Weighted
				Average		Average
	Number of			Exercise		Remaining
	Shares			Price		Life
Outstanding at December 31, 2022		153,683		$	36.96	2.21 Years
Granted		344,212		$	3.39
Exercised/cancelled		(9,877	)	$	39.60
		488,018		$	13.22	3.94 Years

Stock Options

During the nine months ended September 30, 2023, the Company granted directors a total of 78,125 options at exercise prices ranging from $2.64 to $5.48 per share. During the nine months ended September 30, 2023, the Company granted the Chief Executive Officer 490,000 options at exercise prices ranging from $3.18 to $5.48 per share, the Chief Technology Officer 62,500 options at exercise prices ranging from $2.64 to $5.48 per share and the Chief Financial Officer 50,000 options at an exercise price of $8.87. During the nine months ended September 30, 2023 the Company also granted a total of 75,000 options to certain new employees at an exercise price of $7.36 per share.

During the nine months ended September 30, 2023 the Company agreed to accelerate the vesting of 45,190 options for Annie Pham under her Retention Agreement with exercise prices ranging from $6.32 to $19.28 per share. These accelerated options would not otherwise have vested prior to termination of employment according to their Market and Service conditions. Therefore, the Company recalculated the fair value of these options as of her termination date of August 15, 2023 using the Black Scholes method.

The Company determined the grant date fair value of options granted for the nine months ended September 30, 2023, using the Black Scholes and Monte Carlo Methods, as applicable, with the following assumptions:

Expected volatility	120-124%
Expected term	0.25 - 5 years
Risk free rate	3.52% - 4.36%
Dividend rate	0.00%

Activity related to stock options for the nine months ended September 30, 2023 (unaudited), is summarized as follows:

				Weighted		Weighted
				Average		Average		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (Yrs.)		Value
Outstanding at December 31, 2022		1,291,595		$	46.48		6.5	$	-
Granted		755,625		$	4.81		10.0	$	2,218,309
Exercised		-		$	-		-	$	-
Forfeited/cancelled		(361,650	)	$	52.80		-	$	-
Outstanding as of September 30, 2023		1,685,570		$	25.85		6.7	$	2,334,011
Exercisable as of September 30, 2023		1,004,499		$	44.36		4.9	$	876,503

The following table summarizes stock option information as of September 30, 2023 (unaudited):  

			Weighted
			Average
			Contractual
Exercise Price	Outstanding		Term (Yrs.)		Exercisable
Less than or equal $32.00		1,280,216		7.3		709,283
$32.08 - $56.00		17,917		2.7		17,917
$56.08 - $80.00		222,792		6.1		131,820
$80.08 - $127.76		164,645		3.2		145,479
		1,685,570		6.7		1,004,499

During the nine months ended September 30, 2023, the Company recognized approximately ($0.02) million of stock option based compensation expense. As of September 30, 2023, there was approximately $3.2 million of unrecognized compensation costs related to stock options outstanding that will be expensed through 2026.

Revision of Prior Period Information

During the review of the Company’s financial statements for the three and nine-month periods ended September 30, 2023, the Company identified errors in the recording of stock-based compensation expense relating to the three months ended March 31, 2023, related to reversing cumulative stock-based compensation recognized on stock awards with market vesting conditions due to Q1 2023 terminations. The Company recorded the following revisions in the nine-month period ended September 30, 2023. The following revisions will also be included to compare the three and six month periods ending March 31 and June 30, 2023 respectively to the 2024 results.

	Three Months Ended March 31, 2023									Six Months Ended June 30, 2023
	As Previously Reported			Adjustment			As Revised			As Previously Reported			Adjustment			As Revised
Stock-based Compensation	$	837,608		$	(3,438,613	)	$	(2,601,005	)	$	1,895,712		$	(3,438,613	)	$	(1,542,901	)
Operating Expenses	$	4,458,022		$	(3,438,613	)	$	1,019,409		$	7,254,539		$	(3,438,613	)	$	3,815,926
Loss from Continuing Operations	$	(5,220,239	)	$	3,438,613		$	(1,781,626	)	$	(16,120,559	)	$	3,438,613		$	(12,681,946	)
Net Loss	$	(5,222,494	)	$	3,438,613		$	(1,783,881	)	$	(15,901,051	)	$	3,438,613		$	(12,462,438	)
APIC	$	141,317,627		$	(3,438,613	)	$	137,879,014		$	165,593,921		$	(3,438,613	)	$	162,155,308
Accumulated Deficit	$	(145,352,653	)	$	3,438,613		$	(141,914,040	)	$	(156,031,210	)	$	3,438,613		$	(152,592,597	)
Total Stockholders’ Equity (Deficit)	$	(3,900,576	)	$	-		$	(3,900,576	)	$	9,563,289		$	-		$	9,563,289
Net Loss Per Share from Continuing Operations
Basic and Diluted	$	(1.61	)	$	1.06		$	(0.55	)	$	(3.91	)	$	0.83		$	(3.08	)

In accordance with the SEC’s Staff Accounting Bulletin Nos. 99 and 108 (“SAB 99” and “SAB 108”), the Company evaluated this error and concluded that although the adjustment to certain areas of the statement of operations was quantitatively material, the cumulative effects were qualitatively immaterial and would not have materially impacted a reasonable investor’s opinion of the Company. This is further supported by the fact that the impact would not have been significant in comparison to prior periods and all errors are of a non-cash nature. Therefore, as permitted by SAB 108 and treated under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, the Company revised previously recorded results for the three months ended March 31, 2023 and the six months ended June 30, 2023, to account for the prior period error in this current filing.

As a result, the statement of operations for the three and nine month periods ended September 30, 2023 reflects the revised expenses, loss from continuing operations and net loss.