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| STOCKHOLDERS' EQUITY | 12. STOCKHOLDERS’ EQUITY Common Stock As of June 30, 2026, the Company is authorized to issue 50,000,000 shares of common stock, par value $0.0001 per share. Holders of common stock are entitled to one vote for each share held. The holders of common stock are entitled to receive dividends, when and if declared by the Board of Directors, subject to the preferential rights of preferred stockholders. As of June 30, 2026 and December 31, 2025, there were 7,953,957 and 1,322,500 shares of common stock issued and outstanding, respectively. On May 18, 2026, the Company closed the IPO, in which 2,500,000 units were issued, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock (see below, Warrants, for additional detail), at a price of $7.75 per unit, for aggregate gross proceeds of $19,375,000. The Company received net proceeds of $17,650,000 after deducting underwriting discounts and commissions of $1,725,000. The Company also incurred additional offering costs of $2,304,707 related to the offering. Preferred Stock As of June 30, 2026, pursuant to the Company’s amended and restated certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock, par value $0.0001 per share with the rights, preferences and privileges of each series designated by the Board of Directors. No shares of preferred stock were issued and outstanding as of June 30, 2026. During the six months ended June 30, 2026, holders exercised warrants for 1,614,603 shares of preferred stock. Concurrently with the closing of the Company’s IPO on May 18, 2026, all outstanding shares of preferred stock automatically converted into 2,637,484 shares of common stock. Employee Incentive Stock Option Plan The Company maintains equity incentive plans under which stock-based awards may be granted to employees, directors and consultants. Effective May 15, 2026, the Company adopted the 2026 Equity Incentive Plan (the “2026 Plan”), which authorizes the issuance of up to 770,746 shares of common stock, subject to annual automatic increases beginning January 1, 2027 as provided in the 2026 Plan. Upon the effectiveness of the 2026 Plan, no additional awards may be granted under the Company’s 2015 Equity Compensation Plan or 2025 Equity Compensation Plan (collectively, the “Prior Plans”); however, awards outstanding under the Prior Plans remain outstanding and continue to be governed by their respective terms. Stock options generally vest over four years and expire ten years from the grant date. The following table summarizes stock option activity as of June 30, 2026:
As of June 30, 2026, there was $44,517 of total unrecognized stock-based compensation expense related to nonvested options which is expected to be recognized over a remaining weighted-average vesting period of 1.6 years. Stock-based compensation expense of $197,785 and $201,734 was recognized for the three months ended June 30, 2026 and 2025, respectively, to the vesting of stock options. Stock-based compensation expense of $397,594 and $403,468 was recognized for the six months ended June 30, 2026 and 2025, respectively, to the vesting of stock options. Warrants The following table summarizes stock warrant activity for the six months ended June 30, 2026.
During the six months ended June 30, 2026, the Company issued an aggregate of 2,859,950 warrants to purchase shares of the Company’s common stock. The Company issued an aggregate of 286,527 warrants to certain investors with an exercise price of $7.75 per share. The warrants are immediately exercisable, have a contractual term of five years and expire on May 19, 2031. The Company concluded that the warrants meet the criteria for equity classification. In connection with the Company’s IPO, the Company issued an aggregate of 73,423 warrants to the underwriter and certain of its representatives as compensation for underwriting services. The underwriter warrants have an exercise price of $9.69 per share, are immediately exercisable, have a contractual term of five years and expire on May 16, 2031. The aggregate fair value of the underwriter warrants at issuance was $351,696, which was determined using the Black-Scholes option-pricing model. The significant assumptions used in the valuation included an expected term of five years, expected volatility of 79%, a risk-free interest rate of 3.9% and an expected dividend yield of 0%. The Company concluded that the underwriter warrants meet the criteria for equity classification. The fair value of the underwriter warrants were accounted for as an equity issuance cost associated with the IPO and recorded as a reduction of additional paid-in capital. In connection with the Company’s IPO, the Company issued 2,500,000 units, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock. The warrants have an exercise price of $9.69 per share, are immediately exercisable, have a contractual term of five years and expire on May 16, 2031. The Company concluded that the warrants meet the criteria for equity classification. The decrease in outstanding warrants during the six months ended June 30, 2026 was primarily attributable to the exercise of 64,584 warrants (equivalent to 1,614,603 warrants prior to the Company’s -for-25 reverse stock split) into 1,614,603 shares of Series A-4 Preferred Stock during the three months ended March 31, 2026. |
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