Note 5 – Stock Based Compensation

Incentive Plans and Options

Under the Company’s 2017 Stock Incentive Plan (the “2017 Plan”), the Company could grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. Up to 261 shares of the Company’s common stock may be issued pursuant to the 2017 Plan.

The Company granted options to acquire 255 shares of common stock at $4,950 per share under the 2017 Plan. At both June 30, 2025 and December 31, 2024, there were options outstanding to acquire 255 shares of common stock. As of June 30, 2025 and December 31, 2024, all such options were fully vested, and had a weighted average remaining contractual life of approximately 2.7 and 3.2 years, respectively.

In July 2019, the Company authorized an additional plan, the 2019 Stock Incentive Plan (the “2019 Plan”). Under the 2019 Plan, the Company could grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. At both June 30, 2025 and December 31, 2024, a total of 10,452 shares were authorized for issuance under the 2019 Plan.

As of both June 30, 2025 and December 31, 2024, the Company has granted options to acquire 10,452 shares of common stock under the 2019 Plan and no shares of common stock remain available for issuance under the 2019 Plan. There are stock options outstanding to acquire 5,512 shares of common stock with a weighted-average exercise price of $1,105.50 at both June 30, 2025 and December 31, 2024 and weighted average contractual terms of 6.3 years and 6.8 years at June 30, 2025 and December 31, 2024, respectively.

On August 17, 2023, the Company authorized the Tharimmune, Inc. 2023 Omnibus Incentive Plan (as amended, the “2023 Plan”). Under the 2023 Plan, the Company may grant incentive stock options, non-statutory stock options, rights to purchase common stock, stock appreciation rights, restricted stock, performance shares, and performance units to employees, directors, and consultants of the Company and its affiliates. Initially, there were 6,934 shares of the Company’s common stock available to be issued pursuant to the 2023 Plan. Under an amendment and restatement to the 2023 Plan approved by the Company’s stockholders on May 14, 2024, a total of up to 173,600 shares of the Company’s common stock may be issued pursuant to the 2023 Plan. In addition, under the amendment, an “evergreen” provision was added to automatically increase the number of shares available under the 2023 Plan on January 1 annually, beginning January 1, 2025 and ending January 1, 2033, equal to the lesser of five percent of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year or such lesser number of shares of the Company’s common stock as determined by the Board of Directors. Effective January 1, 2025, an additional 98,688 shares of the Company’s common stock were added to the 2023 Plan. Further, effective June 10, 2025, the shareholders approved an amendment to the 2023 Plan, increasing the 2023 Plan by 520,314 shares.

During the three and six months ended June 30, 2025, the Company granted 133,833 options to acquire shares of common stock under the 2023 Plan. At June 30, 2025 521,797 shares of common stock remain available for issuance under the 2023 Plan. As of June 30, 2025 and December 31, 2024, there are stock options outstanding to acquire 236,439 and 103,188 shares of common stock with a weighted-average exercise price of $2.44 and $3.11, respectively, and weighted-average contractual terms of 9.4 years and 9.6 years, respectively.

The following table summarizes stock-based activities under the 2017 Plan, 2019 Plan, and 2023 Stock Incentive Plans:

 Schedule of Stock Option Activity 

The fair value of stock option awards is estimated at the date of grant using the Black-Scholes option-pricing model. The estimated fair value of each stock option is then expensed over the requisite service period, which is generally the vesting period (ranging between immediate vesting and four years). The determination of fair value using the Black-Scholes model is affected by the Company’s share price as well as assumptions regarding a number of complex and subjective variables, including expected price volatility, expected life, risk-free interest rate, and forfeitures. Forfeitures are accounted for as they occur.

Stock options granted during the six months ended June 30, 2025 were valued using the Black-Scholes option-pricing model with the following weighted-average assumptions.

 Schedule of Options Weighted Average Assumptions 

No stock options were granted during the six months ended June 30, 2024.

The weighted-average grant date fair value of stock options granted during six months ended June 30, 2025 was approximately $1.50. The weighted-average fair value of stock options vested during the three and six months ended June 30, 2025 was approximately $13.36 and $17.70, respectively, and during each of the three and six months ended June 30, 2024 was approximately $1,207.78.

Total stock-based compensation expense included in the accompanying condensed consolidated statements of operations was as follows:

 Schedule of Stock-Based Compensation Expense 

As of June 30, 2025, the total unrecognized compensation expense related to non-vested options was approximately $7,000 and is expected to be recognized over the remaining weighted-average service period of approximately 1.0 years.

Warrants

In connection with the IPO, the Company issued warrants to purchase such number of shares of the Company’s common stock equal to 5% of the total shares of common stock issued in the IPO, or 500 warrants. The warrants are exercisable at $1,875.00 per share, were not exercisable within the first six months after issuance, and may, under certain circumstances, be exercised on a cashless basis. The exercise price of the warrants is subject to standard anti-dilutive provision adjustments for stock splits, stock combinations, or similar events affecting the Company’s common stock. The Company has determined that these warrants should be classified as equity instruments since they do not require the Company to repurchase the underlying common stock and do not require the Company to issue a variable amount of common stock. In addition, these warrants are indexed to common stock and do not have any unusual anti-dilution rights.

In May 2023, the Company issued warrants to designees of the underwriter (the “Representative’s Warrants”) to purchase 424 shares of the Company’s common stock (which is equal to 3% of the number of shares sold in the public offering closed in May 2023) at an initial exercise price of $234.375 per share, subject to adjustment. The Representative’s Warrants are exercisable at any time and from time to time, in whole or in part, during the four- and one-half year period commencing 180 days from the commencement of sales of the shares of common stock in the public offering.

In November 2023, the Company issued the underwriters from a private placement offering warrants to purchase 20,000 shares of common stock with an initial exercise price of $18.75, exercisable beginning May 27, 2024, and expiring May 2, 2028 (the “November 2023 Underwriters Warrants”). As of June 30, 2025 and December 31, 2024, the November 2023 Underwriters Warrants to purchase 20,000 shares of common stock have not yet been exercised.

In connection with the June 2024 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company issued the June 2024 Pre-Funded Warrants to purchase 452,253 shares of the Company’s common stock at an exercise price of $0.001, the June 2024 PIPE Warrants to purchase 329,771 shares of the Company’s common stock at an exercise price of $3.09, and the June 2024 Placement Agent Warrants to purchase up to 19,786 shares of the Company’s common stock, exercisable at $3.09 per share. The June 2024 Pre-Funded Warrants were immediately exercisable and are able to be exercised at any time until exercised in full. The June 2024 PIPE Warrants and June 2024 Placement Agent Warrants were immediately exercisable and are able to be exercised until five and a half years from the effective date, or December 21, 2029. As of June 30, 2025, 369,190 of the June 2024 Pre-Funded Warrants have been exercised and none of the June 2024 PIPE Warrants or June 2024 Placement Agent Warrants have been exercised.

In connection with the December 2024 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company issued the December 2024 Pre-Funded Warrants to purchase 491,157 shares of the Company’s common stock at an exercise price of $0.001 and the December 2024 PIPE Warrants to purchase 480,721 shares of the Company’s common stock at an exercise price of $2.031. The December 2024 Pre-Funded Warrants were immediately exercisable and are able to be exercised at any time until exercised in full. The December 2024 PIPE Warrants are exercisable six months from the date of issuance and are able to be exercised until five and a half years from the effective date, or December 9, 2030. As of June 30, 2025, all 491,157 of the December 2024 Pre-Funded Warrants and none of the December 2024 PIPE Warrants have been exercised.

In connection with the June 2025 PIPE Offering as described in Note 4 to the condensed consolidated financial statements, the Company issued the June 2025 Pre-Funded Warrants to purchase 137,838 shares of the Company’s common stock at an exercise price of $0.001, the June 2025 Series A Warrants to purchase 1,689,189 shares of the Company’s common stock at an exercise price of $1.48, and the June 2025 Series B Warrants to purchase 844,570 shares of the Company’s common stock at an exercise price of $3.00. The June 2025 Pre-Funded Warrants were immediately exercisable and are able to be exercised at any time until exercised in full. The June 2025 Series A and B Warrants are exercisable six months from the date of issuance and are able to be exercised until five and a half years from the issuance date, or June 13, 2031. As of June 30, 2025, none of the June 2025 Pre-Funded Warrants, June 2025 PIPE Series A Warrants, or June 2025 PIPE Series B Warrants have been exercised.

Terms of the warrants outstanding at June 30, 2025 are as follows:

 Schedule of Warrants 

Restricted Stock Units

During the six months ended June 30, 2025, as stock-based consideration for consulting services, the Company granted restricted stock units (“RSUs”) under the 2023 Plan to an individual representing the right to receive one share of the Company’s common stock. The RSUs will 100% vest on June 30, 2026, provided that the grantee remains a consultant of the Company.

The grant date fair value of an RSU represents the closing price of the Company’s common stock on the date of grant. The estimated fair value of each RSU is then expensed over the requisite service period, which is generally the vesting period (approximately a year and a half).

The total stock compensation expense related to RSUs for the three and six months ended June 30, 2025 was $12,143 and $20,417, respectively. The total estimated fair value of RSUs at June 30, 2025 was $69,125, of which $48,708 remains to be vested quarterly through June 30, 2026.

Termination Agreement

In connection with the resignation of a board member, effective June 23, 2025, 6,300 shares of the Company’s common stock were issued as stock-based compensation at an estimated fair value of $8,253.