Stockholders’ Equity | Note 6 — Stockholders’ Equity Authorized Capital and Stock Split On February 23, 2022, the Company filed with the Secretary of State of the State of Delaware an amended and restated certificate of incorporation (the “A&R COI”), which became effective immediately. The Company’s board of directors and stockholders approved the A&R COI to be effective upon the closing of the IPO. There was no change to the Company’s authorized shares of common stock and preferred stock of 250,000,000 Common Stock As of June 30, 2022 and December 31, 2021, there were 12,229,399 and 3,200,000 Holders of the Company’s common stock are entitled to one vote for each share held of record, and are entitled upon liquidation of the Company to share ratably in the net assets of the Company available for distribution after payment of all obligations of the Company and after provision has been made with respect to each class of stock, if any, having preference over the common stock, currently including the Company’s preferred stock. The shares of common stock are not redeemable and have no preemptive or similar rights. On February 17, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, acting as representative of the underwriters (“Boustead”), in relation to the Company’s IPO, pursuant to which the Company agreed to sell to the underwriters an aggregate of 2,222,222 purchase 111,111 The Company evaluated the terms of the warrants issued at the close of the IPO and determined that they should be classified as equity instruments based upon accounting guidance provided in ASC 480 and ASC 815 -40 -classified Private Investment in Public Equity On April 19, 2022, the Company consummated the closing of a private placement (the “April Private Placement”), pursuant to the terms and conditions of a securities purchase agreement, dated as of April 13, 2022. At the closing of the April Private Placement, the Company issued 590,406 -funded -Funded -Funded -Funded -Funded -Funded -of-pocket -Funded In connection with the April Private Placement, the Company entered into a Registration Rights Agreement with the purchasers, dated as of April 13, 2022 (the “April Registration Rights Agreement”). The April Registration Rights Agreement provides that the Company shall file a registration statement covering the resale of all of the registrable securities (as defined in the April Registration Rights Agreement) with the Securities and Exchange Commission (the “SEC”) no later than the 20 th th th -1 Upon the occurrence of any Event (as defined in the April Registration Rights Agreement), which, among others, prohibits the Purchasers from reselling the securities for more than ten consecutive calendar days or more than an aggregate of fifteen calendar days during any 12 -month The Company evaluated the terms of the Private Placement Warrants and determined that they should be classified as equity instruments based upon accounting guidance provided in ASC 480 and ASC 815 -40 -classified The Company evaluated the terms of the Contingent Warrants and determined that they should be classified as a liability based upon accounting guidance provided in ASC 815 -40 Preferred Stock Prior to the close of the IPO, the Company had designated 1,150,000 Conversion Each share of the Series Seed was convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder, at a conversion price of $1.52 per share, subject to certain adjustments for stock splits, stock dividends, recapitalizations, and similar corporate transactions, into fully paid and non -assessable -effective Dividends Holders of the Series Seed were entitled to receive cumulative dividends at a per share rate of 8% per annum, compounded annually, on the initial investment amount commencing on the date of issue. Dividends were payable only when, as, and if declared by the Board of Directors or upon a Liquidation Event, as described below. Dividends on Series Seed were in preference to any dividend on the Company’s common stock. Upon the close of the IPO, aggregate cumulative dividends of $1,586,162 or $1.38 per Series Seed share were automatically converted into shares of common stock. Liquidation Preference In the event of certain voluntary or involuntary acquisition or sale transactions or upon the liquidation, dissolution or winding up of the Company (each, a “Liquidation Event”), the holders of Series Seed were entitled to receive out of the proceeds or assets of the Company legally available for distribution to its stockholders (the “Proceeds”), prior and in preference to any distribution of the Proceeds of such Liquidation Event to the holders of shares of common stock by reason of their ownership thereof, an amount (“the Liquidation Preference Amount”) determined based on the provisions of the Company’s COI. The COI provided that the Liquidation Preference Amount be calculated upon the occurrence of a Liquidation Event, based on the Company’s achievement of a Pre -Clinical -Clinical -Clinical -Clinical As of December 31, 2021, and all other prior historical periods, the Liquidation Preference Amount was equal to two times the Series Seed Original Issue Price per share, plus unpaid cumulative dividends. In the event that the Proceeds were insufficient to enable the distribution in full of the Liquidation Preference Amount to the holders of the Series Seed for all of the preferred shares held by them, all of the Proceeds were to be distributed among the holders of Series Seed on a pro rata basis. Upon completion of the distribution required to the holders of Series Seed, all of the remaining Proceeds available for distribution to stockholders were to be distributed among the holders of common shares and preferred shares, on an as -converted Voting On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series Seed were entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series Seed held by such holder were convertible as of the record date for determining stockholders entitled to vote on such matter. Holders of Series Seed were entitled to vote together with the holder of common stock as a single class. Holders of Series Seed were entitled to nominate two out of five of the Company’s directors. Equity Incentive Plans The Company’s 2019 Equity Incentive Plan (the “2019 Plan”) was adopted by its board of directors and by its stockholders on July 1, 2019. The Company has reserved 1,400,000 -based In addition, on February 23, 2022 and in connection with the closing of the IPO, the Company’s board of directors adopted the Company’s 2022 Equity Incentive Plan (the “2022 Plan”), which is the successor and continuation of the Company’s 2019 Plan. Under the 2022 Plan, the Company may grant stock options, restricted stock, restricted stock units, stock appreciation rights, and other forms of awards to employees, directors and consultants of the Company. Upon its effectiveness, a total of 1,600,000 Stock Options The following summarizes activity related to the Company’s stock options under the 2019 Plan and the 2022 Plan for the six months ended June 30, 2022: Number of Weighted Total Weighted Outstanding as of December 31, 2021 780,640 $ 0.01 $ 532,787 8.1 Granted 714,540 6.34 — — Forfeited/cancelled — — — — Exercised — — — — Outstanding as of June 30, 2022 1,495,180 3.04 $ 1,653,005 8.7 Options vested and exercisable as of June 30, 2022 891,722 $ 2.56 $ 1,134,252 8.5 The fair value of options granted in 2022 was estimated using the following assumptions: For the Exercise price $2.55 – 6.45 Term (years) 5.00 – 10.00 Expected stock price volatility 114.5% – 121.2% Risk-free rate of interest 2.9% – 3.1% The weighted average grant date fair value of stock options granted during the three and six months ended June 30, 2022 was $3.56. The aggregate fair value of stock options vested during the three and six months ended June 30, 2022 was approximately $1.4 million and $1.5 million, respectively. Of the total stock options granted during the three and six months ended June 30, 2022, 200,000 stock options were granted to the Company’s Chief Executive Officer (“CEO”), Chairman, and significant stockholder, 200,000 stock options were granted to the Company’s Chief Business Officer (“CBO”), and 100,000 stock options were granted to the Company’s Chief Financial Officer (“CFO”). Additionally, the Company granted 4,655 stock options to three of the Company’s non -executive -executive -date -based -date -executive -based Stock-Based Compensation Stock -based For the Three Months For the Six Months 2022 2021 2022 2021 General and administrative $ 932,211 $ 10,958 $ 938,628 $ 23,876 Research and development 514,916 23,966 527,831 52,769 Total $ 1,447,127 $ 34,924 $ 1,466,459 $ 76,645 As of June 30, 2022, unrecognized stock -based -average | Note 6 — Stockholders’ Equity Authorized Capital and Stock Split On November 24, 2021, in connection with the filing of the amended registration statement for an IPO, the Company’s board of directors approved a 4 -for-1 Common Stock As of December 31, 2021 and 2020, there were 3,200,000 The holder of the Company’s common stock is entitled to one vote for each share held of record, and is entitled upon liquidation of the Company to share ratably in the net assets of the Company available for distribution after payment of all obligations of the Company and after provision has been made with respect to each class of stock, if any, having preference over the common stock, currently including the Company’s preferred stock. The shares of common stock are not redeemable and have no preemptive or similar rights. Preferred Stock The Company has authorized 1,150,000 Conversion Each share of the Series Seed is convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder, at a conversion price of $1.52 per share, subject to certain adjustments for stock splits, stock dividends, recapitalizations, and similar corporate transactions, into fully paid and non -assessable -effective Dividends Holders of the Series Seed are entitled to receive cumulative dividends at a per share rate of 8% per annum, compounded annually, on the initial investment amount commencing on the date of issue. Dividends are payable only when, as, and if declared by the Board of Directors or upon a Liquidation Event, as described below. Dividends on Series Seed are in preference to any dividend on the Company’s common stock. As of December 31, 2021, aggregate cumulative dividends total $1,489,803 or $1.30 per Series Seed share. Liquidation Preference In the event of certain voluntary or involuntary acquisition or sale transactions or upon the liquidation, dissolution or winding up of the Company (each, a “Liquidation Event”), the holders of Series Seed shall be entitled to receive out of the proceeds or assets of the Company legally available for distribution to its stockholders (the “Proceeds”), prior and in preference to any distribution of the Proceeds of such Liquidation Event to the holders of common shares by reason of their ownership thereof, an amount (“the Liquidation Preference Amount”) determined based on the provisions of the Company’s COI. The COI provides that the Liquidation Preference Amount be calculated upon the occurrence of a Liquidation Event, based on the Company’s achievement of a Pre -Clinical -Clinical -Clinical -Clinical As of December 31, 2021, and all other historical periods, the Liquidation Preference Amount is equal to two times the Series Seed Original Issue Price per share, plus unpaid cumulative dividends. In the event that the Proceeds shall be insufficient to enable the distribution in full of the Liquidation Preference Amount to the holders of the Series Seed for all of the preferred shares held by them, all of the Proceeds shall be distributed among the holders of Series Seed on a pro rata basis. Upon completion of the distribution required to the holders of Series Seed, all of the remaining Proceeds available for distribution to stockholders shall be distributed among the holders of common shares and preferred shares, on an as -converted Voting On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series Seed will be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series Seed held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Holders of Series Seed will vote together with the holder of common stock as a single class. Holders of Series Seed are entitled to nominate two out of five of the Company’s directors. Stock Transactions On July 1, 2019, the Company entered into a Series Seed Preferred Stock Purchase Agreement (“Purchase Agreement”) with five qualified investors. The investors agreed to purchase and the Company agreed to sell and issue to investors a total of 1,146,138 2019 Equity Incentive Plan The Company’s 2019 Equity Incentive Plan (the “2019 Plan”) was adopted by its board of directors and by its stockholders on July 1, 2019. The Company has reserved 1,400,000 Stock Options During the year ended December 31, 2020, the Company granted options to purchase up to 688,800 The fair value of options granted in 2020 was estimated using the following assumptions: For the Exercise price $ Term (years) 5.03 – 6.98 Expected stock price volatility 112.2% – 115.2% Risk-free rate of interest 0.37% – 1.76% A summary of stock option information for the year ended December 31, 2021 is presented below: Number of Weighted Total Weighted Outstanding as of December 31, 2020 780,640 $ 0.01 $ 532,787 9.1 Outstanding as of December 31, 2021 780,640 $ 0.01 $ 532,787 8.1 Options vested and exercisable as of December 31, 2021 438,096 $ 0.01 $ 299,001 8.1 Stock-Based Compensation Stock -based For the Years Ended 2021 2020 General and administrative $ 41,061 $ 89,555 Research and development 89,080 245,282 Total $ 130,141 $ 334,837 As of December 31, 2021, future stock -based |