Stockholders Equity (Deficit) |
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| Stockholders' Equity (Deficit) | 20. Stockholders’ Equity (Deficit)
Reverse Stock Split
On August 4, 2026, the Company amended its Amended and Restated Articles of Incorporation by filing a Certificate of Change with the Secretary of State of Nevada to effect a one-for-12 reverse stock split of the common stock, which became effective on August 13, 2026 and to effect a proportionate reduction of its authorized common stock from 297,225,000 shares to 24,768,750 shares, which is 1/12 of the number of previously authorized shares.
As a result of the reverse split, the number of outstanding shares of common stock was reduced from 56,906,572 shares to 4,742,167 shares of common stock. The ownership percentage of each stockholder remains unchanged other than as a result of fractional shares. Proportional adjustments are made to both the number of shares of common stock issuable upon exercise of outstanding options or the conversion of outstanding convertible notes, as well as to the applicable exercise or conversion price.
The reverse split was adopted to support the Company’s effort to regain compliance with the minimum bid price requirement for maintaining the listing of its common stock on the Nasdaq Capital Market. On March 3, 2026, the Company received a notice from Nasdaq that the Company does not meet Nasdaq’s continued listing requirement that the Company maintain a minimum bid price of $1.00 per share. The Nasdaq rules provide that the Company has a compliance period of 180 calendar days to regain compliance. This period expired on August 31, 2026. The closing bid price of the Company’s common stock was at least $1.00 per share for ten consecutive business days prior to August 31, 2026.
The accompanying unaudited condensed consolidated financial statements and accompanying notes have been retroactively revised to reflect such reverse stock split as if it had occurred on January 1, 2025. All shares and per share amounts have been revised accordingly.
Issuance of Common Stock in Private Placement
In January 2026, the Company issued a total of 166,667 shares of common stock for a total consideration of $1,096,000, at an average price of $6.60. The purchase price was 75% of the market price on the date of the respective agreements. Under the Nasdaq regulations, the Company may not be able to raise any significant funding from the sale of common stock at a discount from market in the near future without stockholder approval.
Stock Options
From time to time, the Company granted non-qualified stock options to its employees and consultants for their services. Option awards are generally granted with an exercise price equal to the estimated fair value of the Company’s stock at the date of grant; those option awards generally vest between 18 months and 36 months of continuous service and have contractual terms of seven to ten years. The vested options are exercisable for six months after the termination date unless (i) termination is due to optionee’s death or disability, in which case the option shall be exercisable for 12 months after the termination date, or (ii) the optionee is terminated for cause, in which case the option will immediately terminate.
A summary of option activity is as follows:
Forfeitures are accounted for as actual forfeitures occur.
On August 29, 2025, the Company’s board of directors approved a 3-year extension for all previously granted options that will be expiring through August 31, 2028. |
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