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STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 3 – STOCKHOLDERS’ EQUITY

 

In the first half of 2026, we sold 9,000 shares of our common stock for $180,000 in private transactions. We did not pay commissions or finder’s fees and are using proceeds for working capital. In the first half of 2025, we sold 518,500 shares of our common stock for $10,370,000 in private transactions. We did not pay commissions or finder’s fees and are using the proceeds for working capital. In the first half of 2025, we issued 60,169 shares of our common stock to unrelated third parties as compensation for their consulting services. The stock was valued at $1,203,380. As of June 30, 2026, the Company had 27,582,752 shares of common stock issued and outstanding.

 

On May 28, 2026, the Company granted stock options to employees of our subsidiary, Shenzhen CQENS Technology Company Limited to purchase a maximum of 202,000 shares at $20.00 per share. The grants were made in amounts and with exercise price and vesting conditions consistent with our corporate development objectives. The stock options granted vest as follows: 10% in 18 months from grant; 15% in 36 months from grant; 20% in 54 months from grant; 25% in 72 months from grant; and, 30% in 90 months from grant date. The options expire 10 years from grant date. The fair market value of the options at grant date was determined to be $3,720,990, of which $84,381 was expensed in the second quarter of 2026. The options were valued using the Black Sholes option pricing model with the following assumptions: 1) a current stock price per share of $20.00, based on the price of recent offerings: 2) expected term of 10 years: 3) computed volatility of 104.34%; and 4) the risk-free rate of return of 4.45%. The exercise period of the options terminates May 28, 2036.

 

On June 16, 2025, the Company granted stock options under the Company’s 2019 Equity Compensation Plan to a third party for services to purchase 20,000 shares at $20.00 per share. These options were exercisable immediately. The fair market value of the options at the grant date was determined to be $255,303, which was expensed in the second quarter of 2025. The options were valued using the Black Scholes option pricing model with the following assumptions: 1) a current stock price per share of $20.00, based on the price of recent offerings; 2) expected term of 5 years; 3) computed volatility of 75.10%; and 4) the risk-free rate of return of 4.04%. The exercise period of the options terminates on June 16, 2030.

 

 

The following table represents option activity for the six months ended June 30, 2026:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life
in Years		  

Aggregate
Intrinsic

Value

 
Outstanding – December 31, 2025   2,011,024   $12.45    3.34   $15,178,592 
Exercisable – December 31, 2025   1,679,224   $12.38    2.92   $12,788,592 
Granted   202,000   $20.00           
Forfeited   200,000   $7.00           
                     
Vested   1,479,224                
Outstanding – June 30, 2026   2,013,024   $13.75    3.87   $12,578,592 
Exercisable – June 30, 2026   1,479,224   $13.11    2.80   $10,188,592 

 

During the first half of 2026 we recorded $484,085 in stock option expenses compared to $1,164,408 in the first half of 2025. At June 30, 2026, the total unrecognized compensation cost for nonvested awards is $4,564,706. The weighted average period over which the cost is expected to be recognized is 5.48 years.

 

On September 30, 2020, the Company entered into an Asset Purchase Agreement with Xten Capital Group, a common control entity, pursuant to which it acquired a portfolio of 29 U.S. and international patents and patent applications in the areas of devices and technologies for aerosolizing certain remedies and pharmaceutical preparations, as well as the solutions and preparation for inhaled delivery.

 

As consideration for the acquisition, the Company issued to Xten, common stock purchase warrants exercisable for an aggregate of 21,000,000 shares of its common stock at an exercise price of $5.31 per share (the “Warrants”), including (i) a Series A Common Stock Purchase Warrant exercisable for 7,000,000 shares of common stock commencing on September 30, 2023 and expiring on September 30, 2026, (ii) a Series B Common Stock Purchase Warrant exercisable for 7,000,000 shares of common stock commencing on September 30, 2026 and expiring on September 30, 2029, and (iii) a Series C Common Stock Purchase Warrant exercisable for 7,000,000 shares of common stock commencing on September 30, 2029 and expiring on September 30, 2032. The Company has the right to accelerate or extend the exercise period of each series of Warrants at its discretion. In addition, the exercise period of each series of Warrants automatically accelerates in the event of a “change of control” (as defined in the Warrants) prior to such series of Warrants becoming exercisable by its respective terms. The IP Asset Purchase Agreement contained customary indemnification provisions. The warrants are valued at $191,594 based on the carrying value of the assets acquired. There were no changes to the warrants, including no new issuances or exercises, during the first half of 2026. The outstanding warrants at June 30, 2026 have an aggregate intrinsic value of $308,490,000, a weighted average exercise price of $5.31 and a weighted average remaining contractual life of 3.25 years. The exercisable warrants at June 30, 2026 have an aggregate intrinsic value of $102,830,000, a weighted average exercise price of $5.31 and a weighted average remaining contractual life of 0.25 years.

 

Potential common stock consisting of 21,000,000 warrants and 2,013,024 stock options were excluded from the computation of diluted net loss per share because their effect would have been antidilutive.