| CAPITALIZATION |
NOTE
6: CAPITALIZATION
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a. |
As
of June 30, 2025 and December 31, 2024, the Company had 200,000,000 shares of common stock authorized and 604,963 and 428,799 shares
issued and outstanding, respectively. As of June 30, 2025 and December 31, 2024, the Company had 5,000,000 shares of preferred stock
authorized. There were no shares of preferred stock issued or outstanding as of June 30, 2025 and December 31, 2024. As of June 30,
2025 and December 31, 2024, there were warrants outstanding to purchase an aggregate of 312,354 and 238,423 shares of common stock,
respectively. As of June 30, 2025, these warrants were exercisable at a weighted average price of $127.05 and their weighted average
remaining contractual term was 3.5 years. |
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b. |
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 75,335 shares of common stock and warrants to purchase 75,335 shares of common stock (the “January 2025 Warrants”).
The shares and January 2025 Warrants were sold on a combined basis for consideration of $29.82 for one share and one January 2025
Warrant. The January 2025 Warrants are immediately exercisable at an exercise price of $26.32 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 5,268 shares of common stock at
an exercise price of $32.90. 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 $20.72. |
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c. |
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 10,927
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 100,830
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 $22.882
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 357,142
shares of common stock comprised of (i) 10,927
commitment shares, and (ii) up to 346,215
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. During the first six months of 2025, the Company sold and issued 89,902
shares of common stock under the SEPA for aggregate net proceeds of approximately $1.75
million, after deducting offering expenses in the amount of approximately $0.1
million. |
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